Republic of the Philippines
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS
August 10,2012
MEMORANDUM CIRCULAR NO. 2012-49
For Undersecretaries
Assistant Secretaries
Heads of Sectoral Offices and Attached Agencies
and Corporations
Head Executive Assistant
Service Directors
RMC Chairmen
Division Chiefs
This Department
For your information and dissemination, transmitted herewith is:
NATURE DATE SUBJECT
DBM July 18,2012 "ADOPTION OF
National Budget Circular OPERATIONAL
No. 541 EFFICIENCY MEASURE -
WITHDRAWAL OF
AGENCIES' UNOBLIGATED
ALLOTMENTS AS OF JUNE
30,2012"
IJ O~
ROWEN AJ,~OGUE
Director <.J.I.'
/
Administrative Service
g\I4\1l 1\ ~~\~
THE COLUMBIA TOWER
BRGY. WACK-WACK.
1555 MANDALUYONG
ORTIGAS AVENUE
CITY. PHILIPPINES
TELEFAX: (632) 723-4925
TRUNKLlNE: 727-7960 TO 79
DOTC ACTION CENTER HOTLlNE:
\
7890
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REPUBLIC OF THE PHILIPPINES
Department of Budget and Management
Malacanang, Manila
No. .541
July 18, 2012
TO : All Heads of Departments/Agencies/State Universities and Colleges and
other Of1ces of the National Government, Budget and Planning Officers;
Heads of Accounting Units and All Others Concerned
SUBJECT: Adoption of Operational Efficiency Measure - Withdrawal of
Agencies' Unobligated Allotments as of June 30,2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code
of 1987), periodically reviews and evaluates the departments/agencies'
efficiency and effectiveness in utilizing budgeted funds for the delivery of
services and production of goods, consistent with the government's priorities.
In the event that a measure is necessary to further improve the operational
efficiency of the government, the President is authorized to suspend or stop
further use of funds allotted for any agency or expenditure authorized in the
General Appropriations Act. Withdrawal and pooling of unutilized allotment
releases can be effected by DBM based on authority of the President; as
mandated under Sections 38 and 39, Chapter 5, Book VI of EO 292.
For the first five months of 2012, the National Government has not met its
spending targets. In order to accelerate spending and sustain the fiscal targets
during the year, expenditure measures have to be implemented to optimize the
utilization of available resources.
Departments/agencies have registered low spending levels, in terms of
obligations and disbursements per initial review of their 2012 performance. To
enhance agencies' performance, the DBM conducts continuous consultation
meetings and/or send call-up letters, requesting them to identify slow-moving
programs/projects and the factors/issues affecting their performance (both
pertaining to internal systems and those which are outside the agencies'
spheres of control). Also, they are asked to formulate strategies and
improvement plans for the rest of 2012.
_Notwithstanding these initiatives, some departments/agencies have continued
to post low obligation levels as of end of first" semester, thus resulting to
substantial unobligated allotments. <;
In line with this, the President, per directive dated June 27, 2012 authorized
the withdrawal of unobligated allotments of agencies with low levels of
obligations as of June 30, 2012, both for continuing and current allotments.
This measure will allow the maximum utilization of available allotments to fund
and undertake other priority expenditures of the national government.
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• Confidential and Intelligence Fund;
• Savings from Traveling, Communication, Transportation and
Delivery, Repair and Maintenance, Supplies and Materials and
Utility which shall be used for the grant of Collective Negotiation
Agreement incentive benefit;
• Savings from mandatory expenditures which can be realigned
only in the last quarter after taking into consideration the
agency's full year requirements, i.e., Petroleum, Oil and
Lubricants, Water, Illumination, Power Services, Telephone,
other Communication Services and Rent.
4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-Government Fund, International
Commitments Fund, PAMANA, Priority Development Assistance
Fund, Calamity Fund, Budgetary Support to GOCCsand Allocation
to LGUs,among others;
4.2.5 Quick Response Funds; and
4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium
and Special Accounts in the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to undertake procurement
activities notwithstanding the implementation of the policy of withdrawal
of unobligated allotments until the end of the third quarter, FY 2012.
Even without the allotments, the agency shall proceed in undertaking the
procurement processes (Le., procurement planning up to the conduct of
bidding but short of awarding of contract) pursuant to GPPBCircular Nos.
02-2008 and 01-2009 and DBM Circular Letter No. 2010-9.
5.2 For the purpose of determining the amount of unobligated allotments that
shall be withdrawn, all departments/agencies/operating units (OUs) shall
submit to DBM not later than July 30, 2012, the following budget
accountability reports as of June 30, 2012:
• Statement of Allotments, Obligations and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this
Orcular, the agency's latest report available shall be used by DBM as basis
for withdrawal of allotment. The DBM shall compute/approximate the
agency's obligation level as of June 30 to derive its unobligated allotments
as of same period. Example: If the March 31 SAOB or FRO reflects actual
obligations of P 800M then the June 30 obligation level shall approximate
to P1,600 M (Le., P800 M x 2 quarters).
' ....
5.9 The deadline for submission of request/s pertaining to these categories
shall be until the end of the third quarter i.e., September 30, 2012.
After said cut-off date, the withdrawn allotments shall be pooled and form
part of the overall savings of the national government.
5.10 Utilization of the consolidated withdrawn allotments for other priority
programs and projects as cited under item 5.7.3 of this Circular, shall be
subject to approval of the President. Based on the approval of the
President, DBM shall issue the SARO to cover the approved priority
expend.itures subject to submission by the agency/OU concerned of the
SBRand supported with PFPand MCP.
5.11 It is understood that all releases to be made out of the withdrawn
allotments (both 2011 and 2012 unobligated allotments) shall be within
the approved Expenditure Program level of the national government for
the current year. The SAROs to be issued shall properly disclose the
?.Ippropriation source of the release to determine the extent of allotment
validity, as follows:
• For charges under R.A. 10147 - allotments shall be valid up to
December 31, 2012; and
• For charges under R.A. 10155 - allotments shall be valid up to
December 31, 2013.
S.12 Timely compliance with the submission of existing BARs and other
reportorial requirements is reiterated for monitoring purposes.
6.0, Effectivity
This circular shall take effect immediately.
~ I!l CL \ - r PG .,,--
FLORENCIO B. ABAD
Secretary
