Reporters: CJ Javier and Nicole Wagan

Public Fiscal Administration

The Expense Classes

What is a government budget?

- In general, a government budget is the financial plan of a government for a given
period, usually for a fiscal year, which shows what its resources are, and how they will
be generated and used over the fiscal period.

How are expenditure funds recognized?

General Appropriations Act (GAA)

- is the legislative authority that contains the new appropriations in terms of specific
amounts for salaries, wages, and other personnel benefits; maintenance and other
operating expenses; and capital outlays authorized to be spent for the implementation
of various programs/projects and activities of all departments, bureaus, and offices of
the government for a given year.

- The 2023 budget proposal submitted by the President to Congress in accordance

with Section 22, Article VII of the 1987 Philippine Constitution serves as the basis for
the General Appropriations Bill (GAB). Whereas, on November 23, 2022, the Senate
approved the 2023 General Appropriations Bill (GAB), now the General Appropriations
Act (GAA), amounting to Php5.268 trillion.

Expense Classes
- refers to the general classification of expenditures, specifically based on economic
classification or the process/inputs involved in the government’s fulfilling its
responsibilities, including but not limited to the delivery of goods/services.

These are:
1. Personnel Services (PS),
2. Maintenance and Other Operating Expenses (MOOE)
3. Capital Outlays (CO).

● Personnel Services (PS).

- Refers to an expenditure category/expense class for the payment of salaries,
wages, and other compensation of permanent, temporary, contractual, and
casual government employees.

Compensation and Benefits of Personnel Services:

The Personnel Economic Relief Allowance (PERA)

• In order to supplement the salaries due to the rising cost of living of government
personnel covered by R.A. No. 6758, as amended, Personnel Economic Relief
Allowance (PERA), in the amount of two thousand pesos (P2,000) per month, is
granted to the following:
 a. Civilian government personnel stationed in the Philippines, whether
occupying regular, contractual or casual positions, appointive or
elective; and
b. Military and uniformed personnel.

• Government personnel stationed abroad shall be granted overseas allowances to

defray the cost of their living expenses and shall no longer be entitled to receive
PERA for the duration of their station abroad.

Representation and Transportation Allowances.

• Allowances Government officials with the following ranks and their equivalent, as
determined by the DBM or by the GCG for GOCCs/GFIs covered by R.A. No. 10149,
while in the actual performance of their respective functions, are hereby
authorized to receive monthly commutable representation and transportation
allowances at the rates indicated below for each type of allowance:

(a) P14,000 for Department Secretaries;

(b) P11,000 for Department Undersecretaries;
(c) P10,000 for Department Assistant Secretaries;
(d) P9,000 for Bureau Directors and Department Regional Directors;
(e) P8,500 for Assistant Bureau Directors, Department Assistant Regional
Directors, Bureau Regional Directors, and Department Service Chiefs;
(f) P7,500 for Assistant Bureau Regional Directors; and
(g) P5,000 for Chief of Divisions, identified as such in the Personnel Services
Itemization and Plantilla of Personnel

• Transportation allowance, whether in full or partial amounts, shall not be granted

to officials who are assigned to or actually use government motor transportation.
Officials who are assigned government motor transportation but are not able to
use said vehicle for a justifiable reason, as determined by the DBM, may be granted
transportation allowance during the said period;

• The rationale behind the qualifying phrase, “while in the actual performance of
their respective functions,” is to provide the official concerned with additional
funds to meet necessary expenses incidental to and connected with the exercise
or the discharge of the functions of the office. Thus, if the official is out of office,
whether voluntarily or involuntarily, the official does not and is not supposed to
incur expenses. If there are no expenses incurred then there is nothing to
reimburse.

Uniform/Clothing Allowance
• An amount not exceeding six thousand pesos (P6,000) per year is hereby
authorized for the payment of a uniform or clothing allowance to each qualified
government employee.
 - Government personnel who are expected to render at least 6
consecutive months of service in a particular year shall be entitled to
U/CA.
- The U/CA for special police, security guards, prison guards, firefighters,
and other similar positions shall be inclusive of other articles of clothing
like regulation caps, belts, and coats.
- Government personnel who are required to wear uniforms at all times
in the performance of their functions such as security guards, prison
guards, firefighters, teachers, those who are in direct contact with
patients, and others occupying similar positions, shall be granted U/CA
whether or not they meet the service requirement.

Year-End Bonus and Cash Gift

● The Year-End Bonus and Cash Gift are intended as year-end premiums to all
government employees who have rendered a satisfactory and dedicated
service for at least a total of four (4) months of service including leaves of
absence with pay from January 1 to October 31 of each year, and who are still
in the service as of October 31 of the same year.
- All government personnel in NGAs including State Universities and
Colleges (SUC), Government-Owned and Controlled Corporations
(GOCC), Government Financial Institutions (GFI), and LGUs, whether
appointive or elective, under permanent, temporary, or casual status,
and those issued contractual appointments who are under the
following instances from January 1 to October 31 of each year:
- those who have rendered at least a total or an aggregate of 4
months of service including leaves of absence with pay;
- those who are on an approved leave of absence without pay but
have rendered at least a total or an aggregate of 4 months of
service provided, they are not yet dropped from the rolls

Magna Carta Benefits

● The payment of the magna carta benefits to public health workers, social
workers, and scientists, engineers, researchers, and other science and
technology personnel in the government.

The Benefits are:

● Hazard Pay
● Subsistence /Transportation Allowance
● Longevity Pay
● Housing and Living Quarters Allowance
● Clothing Allowance
● Compensation from Injuries

Honoraria: The respective agency appropriations for honoraria shall only be paid to
the following:
 ● Teaching personnel of the DepEd, CHED, TESDA, SUCs, and other educational
institutions, engaged in actual classrooms teaching, whose teaching load is
outside of the regular office hours or in excess of the regular load;
● Those who act as lecturers, resource persons, coordinators, and facilitators in
seminars, training programs, and other similar activities in training institutions,
including those conducted by entities for their officials and employees;
● Chairs and members of commissions, boards, councils, and other similar
entities, including the personnel thereof, who are not paid salaries nor per
diems but compensated in the form of honoraria as provided by law, rules, and
regulations;
● Those who are involved in science and technological activities who render
services beyond their regular workload; and
● Officials and employees assigned to special projects are subject to the
following conditions:
- Said special projects are reform-oriented or developmental, contribute
to the improvement of service delivery and enhancement of the
performance of the core functions of the agency, and have specific
timeframes and deliveries for accomplishing objectives and milestones
set by the agency for the year; and
- Such assignment entails the rendition of work in addition to or over and
above, their regular workload.

In these instances, the rate of honoraria shall depend on the level of responsibilities,
nature of work rendered, and extent of individual contribution to produce the desired
outputs: PROVIDED, that total honoraria received from all special projects shall not
exceed twenty-five percent (25%) of the annual basic salaries.

Hazard Pay
● Payment to government officials/employees assigned in
difficult/dangerous/strife-torn/embattled areas as certified by an appropriate
government body and to those whose lives are directly exposed to work
conditions that may cause them injury/sickness/death/harmful change.

Overtime Pay
Overtime services shall include:
• Those rendered beyond eight (8) work hours of regular work days;
• Those rendered on rest days, such as Saturdays and Sundays; and
• Those rendered on holidays or non-working days.

- Personnel who rendered overtime services shall be granted overtime pay by the hour
which shall be based on his/her actual hourly rate and it shall not exceed 50% of
his/her annual basic salary.

Incentives, which refer to the following:

• Loyalty Incentive
• Anniversary Bonus
• Productivity Enhancement Incentive
 • Performance-Based Bonus
• Other existing benefits may be categorized by DBM as incentives.

● Maintenance and Other Operating Expenses (MOOE).

- Refers to an expenditure category/expense class for support to the operations
of government agencies such as expenses for supplies and materials;
transportation and travel; utilities (water, power, etc.), and repairs, etc.
- For purchase of supplies, items should not exceed P10,000 as prescribed by
COA.
Traveling Expenses:
• Traveling Expenses-Local
- The costs incurred in the movement/transport of government officers and
employees within the country. This includes transportation, travel per diems,
incidental expenses, lodging, and all other related expenses.
• Traveling Expenses-Foreign
- The costs incurred in the movement/transport of government officers and
employees outside the country. This includes transportation, travel per diems,
passport and visa processing and all other related expenses.

Supplies and Materials Expenses:

• Office Supplies Expenses:
- The cost or value of office supplies such as bond paper, ink, and small tangible
items like staple wire remover, puncher, stapler and other similar items issued
to end-users for government operations.
• Animal/Zoological Supplies Expenses
- The costs of food, medicines, veterinary and other maintenance needs of
animals issued for use in government parks, zoos, wildlife sanctuaries and
botanical gardens. This also includes supplies issued for zoological researches,
preservations, breeding and other purposes.
• Food Supplies Expenses
- The cost of food issued to hospital/rehabilitation patients, jail inmates and the
like.
• Welfare Goods Expenses
- The cost of goods issued/distributed to people affected by
calamities/disasters/ground conflicts such as canned goods, blankets, mats,
kitchen utensils, flashlights and other similar items.
• Fuel, Oil and Lubricants Expenses
- The costs of fuel, oil and lubricants issued for use of government vehicles and
other equipment in connection with government operations/projects.
• Agricultural and Marine Supplies Expenses
- The cost of fertilizers, pesticides and other marine and agricultural supplies
issued in government operations/projects. This includes supplies issued for
aquaculture researches, environment protections/ preservations and the like.
• Textbooks and Instructional Materials Expenses
- The cost of books and instructional materials distributed to public schools
including flipcharts, video clips/slides, and the like.
 • Military, Police and Traffic Supplies Expenses
- The cost or value of military and police supplies issued/used in government
operations such as clubs/cudgels, night sticks, police/traffic gears, flashlights,
truncheons, ammunitions and the like.

Utility Expenses:
• Water and Electricity Expenses
- Water and electricity consumed in government operations/projects.

Communication Expenses:
• Postage and Courier Expenses
- The cost of delivery/transmission of official messages, mails, documents,
recognizes and the like.
• Telephone Expenses
- The cost of transmitting messages thru telephone lines (mobile or landlines),
faxes, telex and the like whether prepaid or post-paid.
• Internet Subscription Expenses
- The cost of using internet services in government operations.

Example of MOOE for School:

- To pay expenses for utilities (e.g. electric and water expenses);
- To procure school supplies necessary for classroom teaching;
- To pay salaries for janitorial and security services

● Capital Outlays or Capital Expenditures.

- Refer to an expenditure category/expense class for the purchase of goods and
services, the benefits of which extend beyond the fiscal year and which add to
the assets of the Government. It also includes investments in the capital stock
of GOCCs and their subsidiaries.
- The capital outlays of the national government may be broadly classified as
follows: infrastructure outlays, equity contributions to government
corporations, capital transfers to local government units, and other capital
outlays.
- Capital expenditures, particularly those classified as capital goods or durable
goods to be used for non-military and productive purposes, such as the
construction of roads and bridges, dams, power and irrigation works, schools,
and hospitals, are generally desirable. They wield a high multiplier effect on
the economy, i.e., they stimulate the growth and expansion of economic
activities of the private sector.

Infrastructure expenditures
- refers to the disbursement of funds for the construction of various basic public
works in the country. Meant to benefit the general public, they cover roads,
ports, airports, water supply networks, irrigation, and other capital
investments. In the national budget, infrastructure expenditures generally
refer to the capital outlays of the Department of Public Works and Highways
(DPWH) and the Department of Transportation and Communication (DOTC).
 They include the School Building Program of the Department of Education and
the national irrigation projects of the Department of Agriculture.

What are capital transfers to local government units (LGUs)?

- Capital transfers to local government units (LGUs) pertain to the portion of the
Internal Revenue Allotment (IRA) which accrue to LGUs equivalent to not less
than twenty percent (20%) of their IRA allocations, earmarked for
development projects such as the construction/improvement, repair, and
maintenance of local roads, concrete barangay roads/multi-purpose
pavements, and the rehabilitation and improvement of communal irrigation
projects/systems.

Equity contributions to government corporations

- refers to the national government investments in the authorized capital stock
of government-owned or controlled corporations.

What constitutes the other capital outlays of the government?

- The other capital outlays of the government consist of land acquisition and
land improvement outlay, buildings and structures outlay, and acquisition of
vehicles, aircraft, water transport vehicles, equipment, furniture, fixtures, etc.

The Expenses Classes are one of the dimensions of the 2023 National budget, amounting to
Php5.268 trillion.

- MOOE takes the most significant slice of the FY 2023 proposed national budget at 38.8
percent. PS comprises 30.8 percent of the proposed national budget, CO has 19.4 percent,
and FinEx has 11.1 percent.
References

DBM Submits P5.024 Trillion FY 2022 National Expenditure Program to Congress.

(2021, August 23). DBM. Retrieved March 27, 2023, from

https://www.dbm.gov.ph/index.php/secretary-s-corner/press

releases/list-of-press-releases/1931-dbm-submits-p5-024-trillion-fy-

2022-national-expenditure-program-to-congress

EXPENDITURE CATEGORIES AND THEIR ECONOMIC IMPORTANCE. (n.d.).

DBM. Retrieved March 27, 2023, from https://www.dbm.gov.ph/wp-

content/uploads/2012/03/PGB-B4.pdf

GENERAL PROVISIONS FISCAL YEAR 2023. (2022, December 5). DBM. Retrieved

May 23, 2023, from https://www.dbm.gov.ph/wp-

content/uploads/GAA/GAA2023/VolumeI/GENPRO.pdf

I. Basic Concepts in Budgeting. (n.d.). Ombudsman. Retrieved March 27, 2023, from

https://www.ombudsman.gov.ph/UNDP4/wpcontent/uploads/2012/12/C

hap1_FAQ.pdf

PERSONNEL AMELIORATION Sec. 34. Funding of Personnel Benefits. The

personnel benefits costs of government officials and employees. (n.d.).

DBM. Retrieved May 22, 2023, from https://www.dbm.gov.ph/wp-

content/uploads/NEP2012/Gen_Provision/Personnel.pdf

Senate approves 2023 General Appropriations Bill. (2022, November 23). DBM.

Retrieved March 29, 2023, from

https://www.dbm.gov.ph/index.php/secretary-s-corner/press-

releases/list-of-press-releases/2490-senate-approves-2023-general-

appropriations-bill
TECHNICAL NOTES ON THE. (n.d.). DBM. Retrieved March 27, 2023, from

https://www.dbm.gov.ph/images/pdffiles/Technical-Notes-on-the-2023-

Proposed-National-Budget.pdf

THE BUDGETING PROCESS. (n.d.). DBM. Retrieved March 27, 2023, from

https://www.dbm.gov.ph/wp-content/uploads/2012/03/PGB-B2.pdf