The Budget Process

The Budget Process
This involves four major steps namely:

1. Budget Preparation
Budget Preparation involves the formulation of estimates of revenues and expenditures by the
Executive Departments and Agencies. In preparing the annual budget proposal, the said department
makes an estimation of government revenues. It then determines the budget priorities within
available revenues and borrowing limits. Finally, it translates these approved priorities into
expenditures.
The main agency involved is the Development Budget Coordination Committee (DBCC) composed of
the following agencies:
a. The Department of Budget and Management, the agency responsible for resource allocation and
management;
b. The Department of Finance, the agency responsible for resource generation and debt
management;
c. The National Economic and Development Authority, the agency responsible for overall economic
activity;
d. The Bangko Sentral ng Pilipinas (Central Bank of the Philippines), the agency responsible for
monetary measures and policies;
e. The Office of the President of the Philippines, the agency responsible for the approval and
oversight of the budget
In the preparation of the budget, the DBCC approves the parameters, makes a budget call, conducts
budget hearings, makes a budget review then consolidates the budget. It then validates and confirms
the budget, which is finally approved by the President of the Philippines and his Cabinet. The
President thereby submits the budget to Congress for approval.
2. Budget Legislation/Authorization
a. Overview
This pertains to the whole range of legislative action on the budget, leading to the enactment of a
General Appropriations Law for the year. The Philippine House of Representatives first conducts
hearings/debates on the budget.
The House then approves the budget, for submission to the Senate of the Philippines. Senate
hearings and debates are conducted on the budget, which is finally approved. A Bicameral
Conference Committee composed of representatives of the Philippine House of Representatives and
the Senate is convened. After approval by the Bicameral Conference Committee, the President enacts
the budget which is known as the General Appropriations Act.
b. The Legislative Budget Process

The main unit of the Philippine House of Representatives involved in the budget process is the
Committee Affairs Department (CAD) composed of the Standing Committees and Sub-Committees.
The CAD’s activities during budget legislation are:
i.Committee Budget Hearings

Standing Committees (sometimes referred to as the Mother Committee/Committee Proper) are
responsible for conducting budget hearings. During these hearings, macroeconomic
assumptions/plans are presented during the Committee budget hearings on a department wide level.
All the heads of the Executive Departments are invited to these hearings.
Sub-Committees are also responsible for conducting these budget hearings. Budget hearings are
conducted by the Sub-Committees on an agency by agency level. Bureaus and other offices under the
various departments of the national government are invited to these hearings.
ii.Printing of General Appropriations Bill (GAB) on 1st Reading

A National Expenditure Program is formulated, and a copy of the GAB on 1st Reading is printed by
the Committee Technical Staff, based on the National Expenditure Program. The GAB is filed in the
plenary session for 1st Reading.
iii. Executive Meeting of the Committee

The Committee meets in executive session to discuss and approve proposed committee amendments
to the GAB. Committee Reports are prepared and filed to the Bills and Index Division.
iv.Sponsorship and Plenary Deliberations
General principles and macroeconomic assumptions are sponsored and debated in the plenary
session. Deliberations on the budgets of each department, agency, office, including Government
Owned and Controlled Corporations.
v. Approval on 2nd Reading of the GAB

Turno en contra speeches are delivered on the Floor. The turno en contra is a legislative tradition
allowing opponents of a bill an opportunity to explain at length their position, in the same manner
that a bill’s sponsor delivers a sponsorship speech. After the Turno en Contra, the Philippine House
Members vote on the approval of the GAB on 2nd Reading.
vi.Amendments, Finalization & Printing of the GAB for 3rd Reading

Inclusion of possible amendments to the GAB for 3rd Reading are submitted to the Floor.
Amendments are approved for inclusion in the proposed copy of the GAB on 3rd Reading, which is
subsequently printed for deliberation.
vii. Approval of the GAB on 3rd Reading

The GAB is distributed to the Philippine House Members who vote on the approval of the bill on 3rd
Reading. The GAB is then approved on 3rd Reading.
viii. Transmittal of the 3rd Reading Copy of the GAB to the Philippine Senate
The GAB, as approved on 3rd Reading, is transmitted to the Senate for consideration in a similar
manner as deliberated upon by the House.
ix.Bicameral (Bicam for short) Conference Committee
The Conferees or representatives from both the Philippine House and Senate convene as a
Conference Committee in order to settle and reconcile differing provisions of each Chamber’s version
of the bill.
x. Approval of the Bicam Report

During this stage of the budget process, the Conference Committee Report is ratified by each
Chamber.
xi. Finalization and Printing of the Enrolled Copy of the GAB
All amendments as approved in the Committee Report is incorporated into the enrolled copy of the
GAB. The enrolled copy is finally printed.
xii. Signing of the Enrolled Copy of the GAB

The enrolled copy of the GAB is forwarded to the President for signing. Veto powers of the President
are exercised in the enactment of the GAB. The signed appropriations bill is finally enacted into a law
which is termed as the General Appropriations Act.
3. Budget Execution/Implementation
Budget execution covers the allotment of appropriations by the central budget authority to, and the
incurrence of obligations by, the spending departments and agencies of government. The steps in the
execution of the budget are:
a. Release of the funds by the Department of Budget and Management (DBM)
b. Implementation of the various programs and activities by the different government agencies
i.Involves the formulation of allotment and cash programs
ii.An Agency Budget Matrix (ABM) is prepared
iii.The ABM is validated/Confirmed for correctness and accuracy
iv.The General Allotment Release Order (GARO)/Special Allotment Release Order (SARO)/Notice of
Cash Allotment is Released (NCA)
v.Government Programs/Projects/Activities can now be implemented due to fund release
4. Budget Accountability & Review
This involved the reporting of actual performance against plans or targets, and it involves the
following process:
a. Monitoring of agency budgetary performance
b. Comparison and evaluation of actual performance with the initially-approved work targets
c. A summary list of checks issued is submitted on a monthly basis
d. Physical & Financial Report of Operations is submitted on a quarterly basis in the form of a trial
balance

The Budget Process

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The Budget Process

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The Budget Process

This involves four major steps namely:

b. The Legislative Budget Process

i.Committee Budget Hearings

ii.Printing of General Appropriations Bill (GAB) on 1st Reading

iii. Executive Meeting of the Committee

iv.Sponsorship and Plenary Deliberations

v. Approval on 2nd Reading of the GAB

vi.Amendments, Finalization & Printing of the GAB for 3rd Reading

vii. Approval of the GAB on 3rd Reading

ix.Bicameral (Bicam for short) Conference Committee

x. Approval of the Bicam Report

xi. Finalization and Printing of the Enrolled Copy of the GAB

xii. Signing of the Enrolled Copy of the GAB

4. Budget Accountability & Review

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