VENZON_MARY ERESA_NATIONAL BUDGET PROCESS PART 1.pptx

the national budget process

1. THE PHILIPPINE BUDGETARY PROCESS PHILIPPINE NATIONAL BUDGET Presented by: MARY ERESA C. VENZON

2. PHILIPPINE NATIONAL BUDGET ------ CONCEPT

3. PHILIPPINE NATIONAL BUDGET ------ CONCEPT The financial blueprint of the country’s development plan.

4. PHILIPPINE NATIONAL BUDGET ------ purpose To ensure that public resources are managed more efficiently and with the greatest degree of discipline. Along with the agenda for prosperity, the proposed  budget  aims to expedite the recovery of the nation in a post-pandemic era, and transition the country towards a promising future of an inclusive and sustainable economy wherein “no Filipino is left behind.”

5. THE NATIONAL BUDGET IN A NUTSHELL

6. THE 2023 BUDGET The PHP5.268 trillion national budget for 2023 contains allocations that will help protect the Philippine economy from the "negative" impact of internal and external shocks, the Department of Budget and Management (DBM)

7. Congress ratifies proposed P5.768-trillion national budget for 2024 THE 2024 BUDGET

8. Section 22, Article VII of the 1987 Constitution sets the tone for the budgetary process. The procedure in the preparation of the national budget is regulated by law. On or before October 20 of each year, each department secretary submits to Department of Budget the estimated income and expenditures of the bureaus and offices under his department for the next fiscal year. Upon receipt of all budget estimates of income and expenditures, the Department of Budget and Management prepares the national budget. Prior to this, however, the Budget secretary can investigate, revise, examine, assemble, coordinate, and reduce or increase the budget estimates of the different departments, bureaus and offices of the government. PHILIPPINE BUDGETARY PROCESSS – LEGAL BASIS

9. PHILIPPINE BUDGETARY PROCESS – LEGAL BASIS After preparing the budget, the Budget secretary submits it to the President, who in turn submits it to Congress within 30 days before the opening of the regular session. The 1987 Constitution specifically provides that the President "shall submit to the Congress within thirty days from the opening of every regular session, as the basis of the general appropriations bill, budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures" ( Sec. 22, Art. VI). Congress uses the budget submitted by the president as the basis for the annual appropriation. According to the 1987 Philippine Constitution, Congress "may not increase the appropriation recommended by the President for the operation of the Government as specified in the budget" (Sec. 25(1), Art. VI).

10. HOW IS THE GOVERNMENT BUDGET CRAFTED AND APPROVED? The Budget Cycle

11. BUDGET CYCLE There are four phases in managing the National Budget: Budget Preparation Budget Legislation Budget Execution Budget Accountability During the preparation phase, the Executive prepares the proposed National Budget. This is followed by the legislation phase where the Congress authorizes the General Appropriations Act.  In the execution phase, agencies utilize their approved budgets and during the accountability phase, the executive monitors and evaluates the use of the budget.

12. THE NATIONAL BUDGET CYCLE

13. 1. BUDGET PREPARATION

14. BUDGET PREPARATION- BUDGET CALL At the beginning of the budget preparation year, the Department of Budget and Management (DBM) issues the National Budget Call to all agencies (including state universities and colleges) and a separate Corporate Budget Call to all GOCCs and GFIs. The Budget Call contains budget parameters (including macroeconomic and fiscal targets and agency budget ceilings) as set beforehand by the Development Budget Coordination Committee (DBCC); and policy guidelines and procedures in the preparation and submission of agency budget proposals.

15. BUDGET PREPARATION- STAKEHOLDER CONSULTATIONS A new feature in budget preparations which seeks to increase citizen participation in the budget process, departments and agencies are tasked to partner with civil society organizations (CSOs) and other citizen-stakeholders as they prepare their agency budget proposals. This new process, which was piloted in the preparation of the 2012 National Budget, is now being expanded towards institutionalization.

16. BUDGET PREPARATION- Department of Health Department of Education Department of Social Welfare and Development Department of Public Works and Highways Department of Agriculture Department of Agrarian Reform National Food Authority National Housing Authority National Home Mortgage and Finance Corp. Department of Tourism Department of Transportation and Communication Department of Interior and Local Government Department of Justice Department of Labor and Employment Department of Environment and Natural Resources Light Rail Transit Authority National Electrification Administration National Irrigation Administration Departments & GOCCs mandated to conduct consultations Note: All other departments and agencies are highly encouraged to undertake the process.

17. BUDGET PREPARATION- AGENCY BUDGET PROPOSALS

18. BUDGET PREPARATION- TECHNICAL BUDGET HEARINGS These are conducted after departments and agencies submit their Agency Budget Proposals to the DBM. Here, agencies defend their proposed budgets before a technical panel of DBM, based on performance indicators on output targets and absorptive capacity. DBM bureaus then review the agency proposals and prepare recommendations.

19. BUDGET PREPARATION- EXECUTIVE REVIEW The recommendations are presented before an Executive Review Board which is composed of the DBM Secretary and senior officials. Deliberations here entail a careful prioritization of programs and corresponding support, vis-à-vis the priority agenda of the national government. Implementation issues are also discussed and resolved.

20. BUDGET PREPARATION- CONSOLIDATION, VALIDATION, & CONFIRMATION DBM then consolidates the recommended agency budgets and recommendations into a National Expenditure Program and a Budget of Expenditures and Sources of Financing (BESF). As part of the consolidating process, the deliberations by the DBCC will determine the agency and sectoral allocation of the approved total expenditure ceiling, in line with the macroeconomic and fiscal program. Heads of major departments are invited to this meeting.

21. BUDGET PREPARATION- PRESENTATION TO THE PRESIDENT The proposed budget is presented by DBM, together with the DBCC, to the President and Cabinet for further refinements or reprioritization. After the President and Cabinet approve the proposed National Expenditure Plan, the DBM prepares and finalizes the budget documents to be submitted to Congress.

22. BUDGET PREPARATION- THE PRESIDENT’S BUDGET The budget preparation phase ends with the submission of the proposed national budget — the “President’s Budget” — to Congress. The President’s Budget consists of the following documents, which help legislators analyze the contents of the proposed budget:

23. BUDGET PREPARATION- THE PRESIDENT’S BUDGET President’s Budget Message (PBM) This is where the President explains the policy framework and priorities in the budget. Budget of Expenditures and Sources of Financing (BESF) Mandated by the Constitution, this contains the macroeconomic assumptions, public sector context (including overviews of LGU and GOCC financial positions), breakdown of the expenditures and funding sources for the fiscal year and the two previous years. National Expenditure Program (NEP) This contains the details of spending for each department and agency by program, activity or project, and is submitted in the form of a proposed General Appropriations Act. Details of Selected Programs and Projects This contains a more detailed disaggregation of key programs, projects and activities in the NEP, especially those in line with the national government’s development plan. Staffing Summary This contains a summary of the staffing complement of each department and agency, including number of positions and amounts allocated for the same.

24. 2. BUDGET LEGISLATION Alternatively called the “Budget Authorization phase,” this starts upon the House Speaker’s receipt of the President’s Budget and ends with the President’s enactment of the General Appropriations Act.

25. BUDGET LEGISLATION- HOUSE DELIBERATIONS The House of Representatives, in plenary, assigns the President’s Budget to the House Appropriations Committee. The Committee and its Sub-Committees then schedule and conduct hearings on the budgets of the departments and agencies and scrutinize their respective programs and projects. It then crafts the General Appropriations Bill (GAB). In plenary session, the GAB is sponsored, presented and defended by the Appropriations Committee and Sub-Committee Chairmen. As in all other laws, the GAB is approved on Second and Third Reading before transmission to the Senate. (Note: In the First Reading, the President’s Budget is assigned to the Appropriations Committee.)

26. BUDGET LEGISLATION- SENATE DELIBERATIONS As in the House process, the Senate conducts its own committee hearings and plenary deliberations on the GAB. Budget deliberations in the Senate formally start after the House of Representatives transmits the GAB. For expediency, however, the Senate Finance Committee and Sub-Committees usually start hearings on the GAB even as House deliberations are ongoing. The Committee submits its proposed amendments to the GAB to plenary only after it has been formally transmitted by the House.

27. BUDGET LEGISLATION- BICAMERAL DELIBERATIONS Once both Houses of Congress have finished their deliberations, they will each constitute a panel to the Bicameral Conference Committee. This committee will then discuss and harmonize the conflicting provisions of the House and Senate Versions of the GAB. A Harmonized Version of the GAB is thus produced.

28. BUDGET LEGISLATION- RATIFICATION OF GAB The Harmonized or “ Bicam ” Version is then submitted to both Houses, which will then vote to ratify the final GAB for submission to the President. Once submitted to the President for his approval, the GAB is considered enrolled.

29. BUDGET LEGISLATION- VETO & ENACTMENT OF GAA The President and DBM then review the GAB and prepare a Veto Message, where budget items subjected to direct veto or conditional implementation are identified, and where general observations are made. Under the Constitution, the GAB is the only legislative measure where the President can impose a line-veto (in all other cases, a law is either approved or vetoed in full).

30. BUDGET LEGISLATION- REENACTMENT When the GAA is not enacted before the fiscal year starts, the previous year’s GAA is automatically reenacted. This means that agency budgets for programs, activities and projects remain the same. Funding for programs or projects that have already been terminated is realigned for other expenditures. Because reenactments are tedious and prone to abuse, the Aquino Administration—with the support of Congress—has committed to ensure the timely enactment of a new GAA every year.

31. Recommendation Make congressional budgets into joint resolutions.   Change from an annual to a biennial budget process.   Create a means to automatically increase revenues.  Enhance the president’s authority to rescind funds. 

32. BUDGET CYCLE RECAP (VIDEO)

33. eresa