Four Phases Comprise in
the Philippines Budget
Cycle
KAREN B. ALDAY
DISCUSSANT
The government budget can be a powerful tool for
promoting economic development. It can stabilize
the economy, spur economic growth, redistribute
wealth, and alleviate poverty. However, a poorly
designed and improperly implemented budget can
also result in unmanageable budget deficits,
macroeconomic instability, wasteful government
spending, rent-seeking and corruption.
The Budget Process
National government budgeting is a continuing
cycle – that is, while the current year’s budget is
being spent (and accounted for) by implementing
agencies, the budget for the ensuing year is
simultaneously being prepared by the Executive
then passed on to Congress for review and
approval. Forming the cycle are the four phases
of the budget process—i.e., preparation,
authorization, execution and accountability .
The Budget Process
National government budgeting is a continuing
cycle – that is, while the current year’s budget is
being spent (and accounted for) by implementing
agencies, the budget for the ensuing year is
simultaneously being prepared by the Executive
then passed on to Congress for review and
approval. Forming the cycle are the four phases
of the budget process—i.e., preparation,
authorization, execution and accountability .
Phase 1 - Budget Preparation
The Executive through the Development Budget
Coordination Committee (DBCC) determines the
government priorities and sets macroeconomic and fiscal
targets
Budget Call
This document contains the policy guidelines and
procedures in preparing budget proposals i.e.,
budget priorities, agency budget ceilings, budget
forms/annexes and budget calendar.
.
Budget of Expenditures and Sources of Financing (BESF) reflects
three-year budgets (i.e. previous, current and immediately
succeedingyear) broken down by sector, item of expenditure, agency
allocation and regional distribution.
National Expenditure Program (NEP) presents the proposed budget
allocation by agency, and spells out the General and Special
Provisions1 or the rules that shall apply in the implementation of
the Appropriations Law.
Details of the Budget is an accompanying document to the National
Expenditure Program (NEP) that presents the specific allocations by
agency, by program/activities/projects (PAPs), and by expense class
Staffing Summary gives information on the personnel
complement (permanent and filled positions) of every
national government agency covering a three-year period,
and the corresponding budget for such positions. This
book also shows the distribution of permanent positions by
salary grade.
President’s Budget Message provides an overview of
the administration’s budget policy thrusts, and the
dimensions of the proposed budget.
Phase 2 – Budget Authorization
The budget authorization phase is the primary avenue where the
legislature exercises its power of the purse—i.e.,Congress determines
the appropriateness of budgetary allocation and decides whether a
particular program should be continued or discontinued. New items of
expenditure may also be introduced at this stage, provided that these
donot increase the size of the budget as submitted by the President
(Constitution-Article VI, Sec. 25).
The budget deficit
is the difference between cash receipts and cash disbursements. It is
regularly monitored by multilateral lending institutions as an indication
of a country’s ability to pay its debts
Automatic and Continuing
Appropriations
Automatic appropriations
Are appropriations programmed annually or for some other period
prescribed by law, by virtue of outstanding legislation that does not
require periodic action by Congress.
Continuing Appropriations, on the other hand,
are appropriations available to support obligations for a specified
purpose or project such as multi-year construction of projects requiring
the incurrence of obligations evenbeyond the budget year
Phase 3 – Budget Execution
The fiscal year covered by the budget execution phase
starts on 1 January of any given year and ends on the last
day (31 December) of the same year.4 To be effective,
budget execution must embrace the following principles:
(a) implementation of the approved budget with as little
distortion as possible, (b) utilization of resources with
frugality, efficiency and transparency, and (c) realization of
developmental goals set in the Medium-Term Development
Plan.
Phase 4 – Budget Accountability
Budget Accountability may be the last but is definitely not the least
important segment of the budget process. Sharing this responsibility are
the oversight bodies—DBM, COA and Congress.
Budget oversight is undertaken by DBM in relation to the periodic
release of allotments and notices of cash allocations.
Meanwhile, the COA examines all government transactions and use of
public resources to ensure that all disbursements are duly authorized
and beneficial to government. Audit findings are expected to feed into
the other phases of the budget, particularly budget preparation and
authorization phases.
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Thank you
