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TOPIC 1 Fiscal Policy

fiscal policy

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Maybelyn Dumaquita Ramos
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12 views

TOPIC 1 Fiscal Policy

fiscal policy

Uploaded by

Maybelyn Dumaquita Ramos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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GOVERNMENT FISCAL SYSTEM

Fiscal policy refers to the "measures employed by governments to stabilize the economy, specifically
by manipulating the levels and allocations of taxes and government expenditures.

Fiscal Management-Government needs to collect sufficient revenues and ensure the sustainability
of its borrowings and debts in order to have enough resources for development spending. On the
other hand, each peso must be spent properly and with maximum impact.\

Good governance is thus at the core of effective fiscal management: where the right amount of
taxes and other revenues are collected, liabilities and financial risks are deftly managed, and the
maximum impact of the use of limited resources is ensured.

A government budget is a document prepared by the government or other political entity


presenting its anticipated revenues and proposed spending for the coming financial year.

Elements of Budget:
These are receipts and expenditures.
Receipts are of two types, revenue receipt and capital receipt.
Same way expenditures are of two nature, revenue and capital expenditure

Govt Revenue:
Taxes
BIR, BOC
non-tax revenue is also collected through fees and licenses, privatization proceeds and income from
other government operations and state-owned enterprises.
Financing and Debt
Aside from Tax and Non-Tax Revenues, the government makes use of other sources of financing to
support its expenses.
External Sources of Financing are:[21]
Program and Project Loans - the government offers project loans to external bodies and uses the
proceeds to fund domestic projects like infrastructure, agriculture, and other government projects.
[20]
Credit Facility Loans
Zero-coupon Treasury Bills
Global Bonds
Foreign Currencies

Domestic Sources of Financing are[21]


Treasury Bonds
Facility loans
Treasury Bills
Bond Exchanges
Promissory Notes
Term Deposits

BUDGET CONDITION
A budget can be of three types:
Balanced budget: when government receipts are equal to the government expenditure.
Deficit budget: when government expenditure exceeds government receipts.
Surplus: when government receipts exceed expenditure.
APPROPRIATION – is act of Congress that authorizes the expenditure of government funds.

GENERAL APPROPRIATION – The annual authorized expenditures of the government and


its instrumentalities.

SUPPLEMENTAL APPRORIATION – additional appropriation to augment the original


appropriation which proved to be insufficient Due to economic, political or social conditions
and certified to have available funds by the BTr.

CONTINUING APPROPRIATION – authorized expenditure to support obligations for govt


projects that are requiring more than one year to complete.

AUTOMATIC APPROPRIATION - refer to appropriations programmed annually or for some


other period prescribed by law, by virtue of outstanding legislation which does now require
periodic action by Congress.

EXECUTIVE DEPARTMENTS INVOVED IN ANNUAL BUDGET PREPARATION, MONITORING AND


CONTROL:
DEVELOPMENT BUDGET COORDINATING COMMITTEE (DBCC) – its
role is primarily to review and approve the macroeconomic targets,
revenue projections, borrowing level, aggregate budget level and
expenditure priorities and recommend to the Cabinet and the President
of the consolidated public sector financial positi0n and the national
government fiscal program.
The members of the DBCC have the following specific responsibilities:
DBM – resource allocation and management
DOF – revenue generation and debt management
NEDA- overall macroeconomic policy
OP – Presidential oversight

NEDA , The National Economic and Development Authority - is an


independent cabinet-
level agency of the Philippine government responsible for economic
development and planning

DEPARTMENT OF BUDGET AND MANAGEMENT


The Department of Budget and Management, created under Executive Order No. 21 dated
April 25, 1936, is mandated under this Order and by subsequent issuances to promote the
sound, efficient and effective management and utilization of government resources (i.e.,
technological, manpower, physical and financial) as instrument in the achievement of
national socioeconomic and political development goals.

DEPARTMENT OF FINANCE- is the executive department of the Philippine government responsible for
the formulation, institutionalization and administration of fiscal policies, management of the
financial resources of the government, supervision of the revenue operations of all local government
units, the review, approval and management of all public sector debt, and the rationalization,
privatization and public accountability of corporations and assets owned, controlled or acquired by
the government.

Bureaus[2]
Bureau of Internal Revenue (BIR)
Bureau of Customs (BOC)
Bureau of the Treasury (BTr)

BIR - The Bureau of Internal Revenue is mandated by law to assess and collect all national
internal revenue taxes, fees and charges, and to enforce all forfeitures, penalties and fines
connected therewith, including the execution of judgements in all cases decided in its favor
by the Court of Tax Appeals

BOC - is an attached agency of the Department of Finance. It is charged with assessing and
collecting customs revenues, curbing illicit trade and all forms of customs fraud, and
facilitating trade through an efficient and effective customs management system.
BUREAU OF TREASURY- Manage the cash resources, collect taxes made by the National
Government (NG) and guarantee forward cover fees due NG, control and service its public debt, both
foreign or domestic;

IMPLEMENTING AGENCIES/DEPARTMENTS
Implementation of the government projects and performing designated governmental
functions.
Each is required by law to have accounting unit/division/department.

COMMISSION ON AUDIT (CO- is an independent constitutional


commission established
by the Constitution of the Philippines. It has the primary function to
examine, audit and settle all accounts and expenditures of the
funds and properties of the Philippine government.

GOVERNMENT ACCOUNTING-analyzing, recording, classifying,


summarizing and communicating all transactions involving the receipt
and disposition of government funds and property and interpreting the
results thereof.

Function of accounting- to provide information that will be useful in


making economic decisions.

GAM general accounting manual – accounting policies, guidelines and


procedures in recording and reporting government financial transactions.
It is adopted to ensure uniformity, accuracy, reliability and timeliness in
the preparation of government financial statements in conformity with
the requirements of the Philippine Public Sector Accounting Standards.

PPSAS Objective - To set out the recognition, measurement,


presentation and disclosure requirements for financial reporting in the
Philippine Government.

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