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Basic Concept in Budgeting

Government budgeting involves allocating public funds to achieve economic and social goals. It is an important process that enables the government to plan, manage finances, and implement programs and projects. The major phases of national budgeting are preparation, legislation/authorization, execution/implementation, and accountability. Preparation involves determining expenditure levels and revenue projections. The budget is then submitted to Congress for legislation before being implemented and subjected to accountability measures.

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Juvy Jane Duarte
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84 views

Basic Concept in Budgeting

Government budgeting involves allocating public funds to achieve economic and social goals. It is an important process that enables the government to plan, manage finances, and implement programs and projects. The major phases of national budgeting are preparation, legislation/authorization, execution/implementation, and accountability. Preparation involves determining expenditure levels and revenue projections. The budget is then submitted to Congress for legislation before being implemented and subjected to accountability measures.

Uploaded by

Juvy Jane Duarte
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BASIC CONCEPT IN

BUDGETING
THE BUDGET PROCESS
WHAT IS GOVERNMENT BUDGETING?

• GOVERNMENT BUDGETING IS THE ALLOCATION OF


PUBLIC FUNDS TO ATTAIN ECONOMIC AND SOCIAL
GOALS OF THE COUNTRY
• IT ALSO ENTAILS THE MANAGEMENT OF
GOVERNMENT EXPENDITURES TO CREATE THE
MOST IMPACT FROM THE PRODUCTION AND
DELIVERY OF GOODS AND SERVICES
WHY IS GOVERNMENT BUDGETING
IMPORTANT?

• GOVERNMENT BUDGETING IS IMPORTANT BECAUSE


IT ENABLES THE GOVERNMENT TO PLAN AND
MANAGE ITS FINANCIAL RESOURCES TO SUPPORT
THE IMPLEMENTATION OF VARIOUS PROGRAMS
AND PROJECTS THAT BEST PROMOTE THE
DEVELOPMENT OF THE COUNTRY
WHAT ARE THE MAJOR PROCESSES INVOLVED
IN NATIONAL GOVERNMENT BUDGETING?
• BUDGETING FOR THE NATIONAL GOVERNMENT INVOLVES (4) DISTINCT PHASES
-BUDGETING PREPARATION
-BUDGET LEGISLATION OR AUTHORIZATION
-BUDGET EXECUTION OR IMPLEMENTATION
-BUDGET ACCOUNTABILITY
WHAT IS BUDGET PREPARATION?

• THE BUDGET PREPARATION PHASE STARTS WITH THE DEVELOPMENT BUDGET


COORDINATION COMMITTEE (DBCC)
• IT IS HEADED BY THE DBM SECRETARY AND ITS MEMBERS ARE THE SECRETARY
OF FINANCE
• THE NEDA DIRECTOR-GENERAL
• THE BANGKO SENTRAL GOVERNOR WITH THE OFFICE OF THE PRESIDENT FOR
GENERAL OVERSIGHT
NEDA (NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY)

• THE NEDA PROVIDES THE OVER-ALL


MACRO-ECONOMIC ASSUMPTIONS WITH
WHICH BUDGETARY LEVELS ARE TO BE
DETERMINED
DEPARTMENT OF FINANCE (DOF

• THE DEPARTMENT OF FINANCE (DOF), THE


BUREAU OF THE TREASURY, THE BUREAU OF
INTERNAL REVENUE AND THE BUREAU OF
CUSTOMS HELP THE DBCC IN DETERMINING
THE SOURCES
DBCC

• THE DBCC DETERMINES THE OVERALL ECONOMIC


TARGETS, EXPENDITURE LEVELS, THE REVENUE
PROJECTION, DEFICIT LEVELS AND THE
FINANCING PLAN. IT SUBMITS THEM TO THE
PRESIDENT AND THE CABINET FOR APPROVAL.
BUDGET CALL

• THIS REQUIRES AGENCIES TO PREPARE THEIR


BUDGETS IN ACCORDANCE WITH THE SAID
GUIDELINES, MACRO-ECONOMIC ASSUMPTIONS,
AND CEILINGS. THE DBM SPELLS OUT
GUIDELINES, PROCEDURES, AND TIMETABLES.
AGENCIES

• AGENCIES UNDERTAKE THEIR OWN INTERNAL


CONSULTATIONS. THEY RANK PROGRAMS, PROJECTS AND
ACTIVITIES USING THE CAPITAL BUDGETING APPROACH.
• THEN THEY SUBMIT THEIR BUDGET ESTIMATES, TAKING INTO
ACCOUNT THEIR OWN PRIORITIES AND THOSE OF THE
NATIONAL GOVERNMENT UNDER THE MEDIUM-TERM PUBLIC
INVESTMENT PROGRAM (MTPIP).
DBM

• THE DBM THEN CONDUCTS TECHNICAL BUDGET


HEARINGS WHERE AGENCIES DEFEND AND
JUSTIFY THEIR PROPOSALS. ORGANIZATIONAL
AND BUDGETARY ISSUES ARE CLARIFIED.
SUBMISSION TO CONGRESS

• ONCE THE BUDGET IS APPROVED BY THE


PRESIDENT AND THE CABINET, THE PRESIDENT
SUBMITS IT TO CONGRESS. THIS MUST BE DONE NO
MORE THAN THIRTY DAYS AFTER THE OPENING OF
ITS REGULAR SESSION, AS REQUIRED UNDER THE
CONSTITUTION.
WHAT IS BUDGET LEGISLATION?

• THE PRESIDENT SUBMITS TO CONGRESS THE


NATIONAL EXPENDITURE PROGRAM (NEP),
THE BUDGET OF EXPENDITURES AND
SOURCES OF FINANCING (BESF), AND THE
PRESIDENT'S BUDGET MESSAGE.
HOUSE OF THE REPRESENTATIVES

• THE PROPOSED BUDGET IS FIRST REVIEWED BY THE


COMMITTEE ON APPROPRIATIONS OF THE HOUSE OF
REPRESENTATIVES.
• THE COMMITTEE SUMMONS THE AGENCIES TO
JUSTIFY THEIR BUDGETS, WITH THE DBM ASSISTING
AND PROVIDING TECHNICAL INPUTS.
SENATE OF THE PHILIPPINES

• THIS THEN GOES TO THE SENATE FINANCE


COMMITTEE FOR ANOTHER ROUND OF HEARINGS
AND DELIBERATIONS. THE COMMITTEE PRESENTS
THE PROPOSED AMENDMENTS TO THE HOUSE
BUDGET BILL TO THE SENATE FOR APPROVAL.
BICAMERAL CONFERENCE COMMITTEE

• THE COMMITTEE ARRIVES AT A COMMON


VERSION, AND IT IS THEN SUBMITTED TO THE
PRESIDENT. IF THERE ARE ITEMS WHICH HE/SHE
DISAGREES WITH, THEN THE PRESIDENT CAN
EXERCISE LINE-ITEM VETO POWER.
GAA (GENERAL APPROPRIATIONS ACT)

• THE LAW CONTAINS THE NEW APPROPRIATIONS IN TERMS


OF SPECIFIC AMOUNTS: FOR SALARIES, WAGES AND
OTHER PERSONNEL BENEFITS; FOR MAINTENANCE AND
OTHER OPERATING EXPENSES; FOR CAPITAL OUTLAYS,
ALL AUTHORIZED TO BE SPENT BY THE GOVERNMENT
FOR A GIVEN YEAR.
WHAT IS BUDGET EXECUTION?

•IT IS AT THE BUDGET EXECUTION


STAGE THAT THE EXPENDITURE
PROGRAM IS IMPLEMENTED.
WHAT IS BUDGET ACCOUNTABILITY?

• THE ACCOUNTABILITY PHASE IS THE FINAL


PHASE OF THE BUDGET PROCESS. THIS IS
WHEN THE AGENCIES REPORT THEIR ACTUAL
PHYSICAL AND FINANCIAL PERFORMANCE.
WHY DOES THE GOVERNMENT PREPARE A
NEW BUDGET EVERY YEAR?

• THE PREPARATION OF THE GOVERNMENT'S


BUDGET EVERY YEAR IS IN ACCORDANCE WITH
THE CONSTITUTION. THE CHARTER REQUIRES THE
PRESIDENT TO SUBMIT A BUDGET OF
EXPENDITURES AND SOURCES OF FINANCING
WITHIN 30 DAYS FROM THE OPENING OF EVERY
REGULAR SESSION OF CONGRESS
HOW DOES THE BUDGET BECOME A LAW?

• IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONSTITUTION,


THE PRESIDENT SUBMITS HIS/HER PROPOSED ANNUAL BUDGET IN
THE FORM OF A BUDGET OF EXPENDITURES AND SOURCES OF
FINANCING (BESF) SUPPORTED BY DETAILS OF PROPOSED
EXPENDITURES IN THE FORM OF A NATIONAL EXPENDITURE
PROGRAM (NEP) AND THE PRESIDENT'S BUDGET MESSAGE WHICH
SUMMARIZES THE BUDGET POLICY THRUSTS AND PRIORITIES FOR
THE YEAR.
WHAT IS THE GENERAL APPROPRIATIONS ACT?

• THE GENERAL APPROPRIATIONS ACT (GAA) IS THE


LEGISLATIVE AUTHORIZATION THAT CONTAINS
THE NEW APPROPRIATIONS IN TERMS OF SPECIFIC
AMOUNTS FOR SALARIES, WAGES AND OTHER
PERSONNEL BENEFITS
HOW IS THE BUDGET IMPLEMENTED?

• BUDGET IMPLEMENTATION STARTS WITH THE RELEASE OF


FUNDS TO THE AGENCIES. TO ACCELERATE THE
IMPLEMENTATION OF GOVERNMENT PROGRAMS AND
PROJECTS, AND TO ENSURE THE JUDICIOUS USE OF
BUDGETED GOVERNMENT FUNDS, THE GOVERNMENT
ADOPTED THE SIMPLIFIED FUND RELEASE SYSTEM (SFRS)
BEGINNING 1995.
• THE RELEASE OF NCAS BY DBM IS BASED ON:

• 1) THE FINANCIAL REQUIREMENTS OF AGENCIES AS


INDICATED IN THEIR ABMS, CASH PLANS, AND REPORTS,
SUCH AS THE SUMMARY LIST OF CHECKS ISSUED (SLCI);
AND
• 2) THE CASH BUDGET PROGRAM OF GOVERNMENT AND
UPDATES ON PROJECTED RESOURCES.
WHY ARE ADJUSTMENTS MADE ON THE
BUDGET PROGRAM?
• ADJUSTMENTS ARE MADE ON THE BUDGET EVEN DURING IMPLEMENTATION
PRIMARILY BECAUSE OF THE FOLLOWING:
- ENACTMENT OF NEW LAWS
- ADJUSTMENTS IN MACROECONOMIC PARAMETERS
- CHANGE IN RESOURCE AVAILABILITIES

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