December 22, 2015

REPUBLIC ACT NO. 10717

AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY ONE, TWO THOUSAND AND SIXTEEN, AND FOR OTHER PURPOSES APPROVED BY THE PRESIDENT ON DECEMBER 21, 2015

SECTION 1. Appropriation of Funds. — The following sums, or so much thereof as may be necessary, are hereby appropriated out of any funds in the National Treasury of the Philippines not otherwise appropriated, for the operation of the Government of the Republic of the Philippines from January one to December thirty-one, two thousand and sixteen, except where otherwise specifically provided herein:

GENERAL PROVISIONS

SECTION 2. Performance-Informed Budgeting. — The amounts appropriated herein considered the physical accomplishments vis-a-vis the organizational outcome targets of departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs, and GOCCs. The organizational outcome targets were formulated by the agencies to ground the existing Major Final Outputs (MFOs) and their corresponding Performance Indicators that are linked to their mandated organizational outcomes under the Organizational Performance Indicator Framework (OPIF) to the sectoral and societal goals or targets of the agency.

This is consistent with the national policy of orienting the budget towards the achievement of explicit objectives and desired budget outcomes, as well as for greater transparency and accountability in public spending under the results-based budgeting system being adopted in the whole of government.

The targets set for the performance indicators of agencies at the MFO level, stated in terms of quantity, quality or timeliness dimensions, as well as at the organizational outcome level are disclosed under the Performance Information in this Act and are considered the commitments and accountability of their respective heads of agency. Agency performance shall be assessed not only in terms of their legally mandated outputs, as reflected in their MFOs, but also the impact these have on the broader organizational, sectoral and societal outcomes envisioned in the Philippine Development Plan (2011-2016) and the President's Social Contract with the Filipino People. Achievement of MFO and organizational outcome shall therefore be closely monitored to provide a measure of efficiency and effectiveness of the budget, respectively. MFO targets shall be used as a basis for the grant of the Performance Based Incentives to government personnel in accordance with the provisions of E.O. No. 80, s. 2012, A.O. No. 25, s. 2011, and other guidelines issued thereon.

In the case of GOCCs, they shall likewise be guided by the performance evaluation systems established by the GCG pursuant to Section 5 (f) of R.A. No. 10149 as well as the Results-Based Performance Management System being implemented across all departments, bureaus and offices under the Executive branch as mandated under A.O. No. 25.

SECTION 3. FY 2016 Budget with UACS. — The DBM shall identify the account codes of the items of appropriations in this Act pursuant to the Unified Accounts Code Structure (UACS) under COA-DBM-DOF J.C. Nos. 2013-1 and 2014-1 dated August 6, 2013 and November 7, 2014, respectively. The UACS shall cover the funding source, organization, location, MFO, program, activity and project (P/A/P), and object codes which shall be used in the release of the appropriations herein for a unified accounting, auditing and reporting of all the financial transactions of the government. The UACs shall be identified by the DBM for the purpose of implementing this Act.

SECTION 4. The GAA as Release Document. — All appropriations authorized herein shall be considered released upon effectivity of this Act, except for the following:

(a) Appropriations that by virtue of law, general or special provisions, and rules and regulations have conditions or requirements before release;

(b) Lump-sum appropriations in the agency budget and special purpose funds that have no details necessary for release; and

(c) Those requiring a Special Budget under the general or special provisions in this Act.

In the case of automatic appropriations, the same shall be released upon compliance with the conditions provided by law.

The DBM shall identify the items of appropriations which are not considered released upon effectivity of this Act and submit a copy thereof to the COA.

Receipts and Income

SECTION 5. Receipts or Revenues Collected by Agencies. — As a general rule, all fees, charges, assessments, and other receipts or revenues collected by departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy in the exercise of their mandated functions and at such rates as are now or may be approved by the appropriate approving authority shall be deposited with the National Treasury as income of the General Fund pursuant to Section 44, Chapter 5, Book VI of E.O. No. 292, s. 1987 and Section 65 of P.D. No. 1445.

Exceptions to the foregoing are:

(a) Receipts authorized by law to be recorded as a Special Account in the General Fund, Trust Fund or a fund other than the General Fund which shall be established in accordance with rules and regulations as may be issued by the Permanent Committee (the "Permanent Committee") created under Section 45, Chapter 5, Book VI of E.O. No. 292. The said special funds may be made available for expenditure, subject to any special provision of the agencies concerned; and

(b) Other instances authorized by law.

Disbursements or expenditures by agencies from use and/or retention of income absent the above legal authority and/or from income deposited outside of the National Treasury without legal basis shall be void and subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5, and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing laws.

All agencies shall ensure that fees, charges and assessments collected cover the costs of services delivered to the public. They may be allowed to raise fees and charges in accordance with A.O. No. 31, s. 2012, DOF-DBM-NEDA J.C. No. 1-2013 dated January 30, 2013, and other guidelines issued by the agencies concerned. The schedule of fees, charges and assessments collectible by any government agency shall be posted in big bold characters in a conspicuous place within the agency, including its regional, provincial, field or extension offices. The updating and continuous display of said schedule shall be the responsibility of the head of the agency.

SECTION 6. Donations for a Term Exceeding One (1) Year. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs may accept donations, contributions, grants, bequests or gifts, in cash or in kind, from various sources, domestic or foreign, for purposes relevant to their functions. In case of donations from foreign governments, acceptance thereof shall be subject to the prior clearance and approval by the President of the Philippines upon recommendation of the Secretary of Foreign Affairs.

Receipts from donations, whether in cash or in kind, shall be accounted for in the books of the donee-agency in accordance with accounting and auditing rules and regulations. The cash value of the donations shall be deemed automatically appropriated for the purpose specified by the donor. The receipts from cash donations and proceeds from sale of donated commodities shall be deposited with the National Treasury and recorded as a Special Account in the General Fund and shall be available to the implementing agency concerned through a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292. Donations for specific purpose/s with a term not exceeding one (1) year shall be treated as trust receipts in accordance with Section 7 hereof.

Disbursements or expenditures by agencies in violation of the above requirements shall be void and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

The donee-agency concerned shall submit to the DBM, the House Committee on Appropriations, the Senate Committee on Finance, and the COA, either in printed form or by way of electronic document, quarterly reports of all donations received, whether in cash or in kind, and expenditures or disbursements thereon. The head of the agency concerned and the agency's web administrator or his/her equivalent shall be responsible for ensuring that said quarterly reports are likewise posted on the agency's website.

SECTION 7. Trust Receipts. — The following shall be deposited with the National Treasury and recorded as trust receipts in accordance with E.O. No. 338, s. 1996, as implemented by COA-DBM-DOF J.C. No. 1-97 dated January 2, 1997, and other guidelines issued thereon:

(a) Receipts collected or received by departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs: (i) from non-tax sources, including insurance proceeds; (ii) acting as trustee, agent or administrator; (iii) as a guaranty for the fulfillment of an obligation; or (iv) from donations authorized by law or contract for specific purposes with a term not exceeding one (1) year; and

(b) Those classified by law or regulations as trust receipts.

Trust receipts shall be disbursed in accordance with the purpose for which it is created, subject to the applicable special provisions and accounting and auditing rules and regulations.

 

Disbursements or expenditures by agencies in violation of the above requirements shall be void and subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

SECTION 8. Performance Bonds and Deposits. — Performance bonds and deposits filed or posted by private persons or entities with departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs shall be deposited with the National Treasury and recorded as trust receipts in accordance with E.O. No. 338, as implemented by COA-DBM-DOF J.C. No. 1-97, and other guidelines issued thereon.

Upon faithful performance of the undertaking or termination of the obligation for which the bond or deposit was required, any amount due shall be returned by the agency concerned to the filing party, withdrawable in accordance with accounting and auditing rules and regulations.

SECTION 9. Receipts Arising from Build-Operate-and-Transfer Arrangements and Its Variant Schemes. — Receipts, such as toll fees, charges and other revenues arising from public sector projects implemented through build-operate-and-transfer arrangement and other variants pursuant to R.A. No. 6957, as amended by R.A. No. 7718, collected or received by departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs and GOCCs intended for the proponent private company or individual in accordance with the concession agreement shall be deposited in an authorized government depository bank and booked as a trust liability account of the agency concerned, notwithstanding the provision of Section 5 hereof.

The National Government share out of the collections from the above projects, if any, including interest earned thereon, shall be deposited with the National Treasury as income of the General Fund pursuant to Section 44, Chapter 5, Book VI of E.O. No. 292.

SECTION 10. Revolving Funds. — Revolving funds shall be established and maintained only if expressly created and authorized by law or this section.

Receipts derived from the following may be constituted into a revolving fund and made available for the purposes stated:

(a) Rentals for the use of buildings and facilities or from fees imposed for board and lodging to be used for the MOOE or Capital Outlay requirements of said buildings and facilities, subject to any guidelines issued by the agency concerned and to budgeting, accounting and auditing rules and regulations; and

(b) Other business-type activities including sale of products, which are authorized by law or by the Permanent Committee to be utilized for the operational expenses of said business-type activity, subject to any conditions prescribed under the special provision of the agency concerned and the rules and regulations as may be prescribed by the Permanent Committee.

Revolving funds shall be separately recorded and deposited in an authorized government depository bank, and considered self-perpetuating and self-liquidating. All eligible obligations or expenditures incurred for the operations of the foregoing activities shall be charged against the revolving fund. In no case shall said fund be used for the payment of discretionary and representation expenses.

Disbursements or expenditures by agencies in violation of the above requirement shall be void and subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

The agency concerned shall submit to the DBM, copy furnished the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document, quarterly reports on income and expenditure. The head of the agency concerned and the agency's web administrator or his/her equivalent shall be responsible for ensuring that said quarterly reports are likewise posted on the agency's website.

SECTION 11. Reversion, Closure, and Transfer of Balances of Special Accounts, Fiduciary or Trust Funds, Revolving Funds, and Unauthorized Accounts.— Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs are mandated to close and revert all balances of Special Accounts, Fiduciary or Trust Funds, and Revolving Funds to the General Fund in any of the following instances: (i) when there is no legal basis for its creation; (ii) when their terms have expired; or (iii) when they are no longer necessary for the attainment of the purposes for which said funds were established.

In case an agency fails or refuses to implement such closure, reversion and/or transfer, the Permanent Committee may recommend for approval of the President the closure, reversion and/or transfer of Special Accounts, Fiduciary or Trust Funds, Revolving Funds, and Unauthorized Accounts, as the case may be, on any applicable grounds, to wit: (i) in the cases above-mentioned; (ii) when used in violation of the rules and regulations issued by the Permanent Committee; (iii) when they have remained dormant for an unreasonable length of time; or (iv) when needed by the General Fund in times of emergency.

Said agencies shall likewise transfer with the National Treasury all balances of unauthorized accounts with any banking institution. Unauthorized Accounts shall refer to cash account balances maintained by agencies without legal basis or those while legally authorized are maintained outside of the National Treasury in violation of law.

Implementation of this section shall be subject to the Permanent Committee J.C. No. 4-2012 dated September 11, 2012 and such other guidelines issued by the agencies concerned.

SECTION 12. Transparency on Public Funds. — Consistent with the State policy on full public disclosure of government transactions, the BTr shall post on its website information relating to all Special Funds deposited with the National Treasury, which shall include, but not limited to the following: (i) agency under whose name the account or fund was constituted or created; (ii) funding source/s of the account or fund; (iii) legal basis for the creation of the account or fund; (iv) allowable uses/purposes of the account or fund; (v) monthly balances of each account or fund; and (vi) such other pertinent information as may be reasonably required to be posted on the BTr website.

In like manner, departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs and GOCCs shall post on their respective websites information relating to public funds deposited, maintained, and invested by them with any banking or financial institution which shall include, but not limited to the following: (i) name of the banking or financial institution/s where public funds are deposited, maintained or invested; (ii) specific income/fund source/s; (iii) legal basis for depositing, maintaining or investing said income/fund source/s with the bank/s or financial institution/s; (iv) allowable uses/purposes of the income or fund; (v) monthly balances of each account or fund; and (vi) such other pertinent information as may be reasonably required to be posted by the agency concerned on its website.

The head of the agency concerned and the agency's web administrator or his/her equivalent shall be responsible for ensuring compliance with the foregoing requirement.

SECTION 13. Conduct of Seminar, Conference, and Training Programs.— Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy which conduct training programs in relation to their mandated functions are authorized to collect seminar, conference and training fees from government and private agency participants.

The proceeds derived from each seminar, conference and training shall be deposited with the National Treasury as income of the General Fund pursuant to Section 44, Chapter 5, Book VI of E.O. No. 292: PROVIDED, That government agencies which do not have appropriations in their budgets for the purpose may use the proceeds for the conduct of the said seminar, conference and training, subject to budgeting, accounting and auditing rules and regulations: PROVIDED, FURTHER, That any excess proceeds shall be deposited with the National Treasury as income of the General Fund.

The agency concerned shall, upon the conclusion of the seminar, conference or training, submit to the DBM, either in printed form or by way of electronic document, a report on the fees collected or expenses incurred thereon.

SECTION 14. Sale of Official Publications. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy are authorized to sell their official publications whether electronically or through other means. The proceeds derived from such sale shall be deposited with the National Treasury as income of the General Fund pursuant to Section 44, Chapter 5, Book VI of E.O. No. 242: PROVIDED, That agencies which do not have appropriations in their budgets for the purpose may use said proceeds to defray the cost of preparing, printing and disseminating such official publications, subject to budgeting, accounting and auditing rules and regulations: PROVIDED, FURTHER, That any excess proceeds shall be deposited with the National Treasury as income of the General Fund.

The agency concerned shall submit a report on the proceeds from said sale and the expenses incurred thereon to the DBM, either in printed form or by way of electronic document.

SECTION 15. Sale of Non-Serviceable, Obsolete or Unnecessary Equipment. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy are authorized to sell non-serviceable, obsolete, or unnecessary equipment, including motor vehicles in accordance with Section 79 of P.D. No. 1445, E.O. No. 309, s. 1996, and such guidelines issued thereon. The proceeds from the sale of such equipment shall be deposited with the National Treasury as income of the General Fund pursuant to Section 44, Chapter 5, Book VI of E.O. No. 292.

 

SECTION 16. National Internal Revenue Taxes and Import Duties. — The amounts pertaining to the following taxes and duties shall be considered as both revenue and expenditure of the government, and are deemed automatically appropriated:

(a) National internal revenue taxes and import duties payable or assumed by departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs arising from foreign donations, grants and loans;

(b) Non-cash tax transactions of the following government agencies: (i) BTr for documentary stamp taxes on foreign and domestic securities issued; (ii) DND and PNP on importations of military hardware, software, munitions, arms and equipment; (iii) Bureau of Fire Protection on importations of fire-fighting and rescue equipment, and personal protective gears; (iv) DOTC for the Metro Rail Transit Line 3 System incurred starting FY 1997 in accordance with the provisions of the Build-Lease-Transfer Agreement executed thereon; and (v) other tax obligations assumed by the National Government pursuant to a valid build-operate and transfer agreement or any of its variants;

(c) Tax expenditure subsidies granted by the Fiscal Incentives Review Board to GOCCs, including tax obligations assumed pursuant to a valid agreement, the AFP Commissary and Exchange Service, the PNP Service Store System, and the Procurement Service Exchange Marts or PX Marts, in accordance with E.O. No. 93, s. 1986, as amended and other guidelines issued thereon; and

(d) Procurement of imported vaccines and medical equipment by the Department of Health from international cooperating agencies such as but not limited to the World Health Organization, the United Nations International Children's Emergency Fund, and the Deutsche Gesellschaft Fur Technische Zusammenarbeit (GTZ) GMBH.

Implementation of this section shall be subject to DOF-DBM J.C. No. 1 dated April 30, 2014 and such other guidelines issued by the agencies concerned. (CONDITIONAL IMPLEMENTATION — President's Budget Action Message, December 21, 2015, Volume II-B, page 820, R.A. No. 10717)

SECTION 17. Loan Agreements.— Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs and GOCCs, except those engaged in banking, shall in no case enter into foreign or domestic loan agreements, whether in cash or in kind, unless the applicable conditions are complied with:

(a) Prior approval of the President of the Philippines;

(b) Concurrence of the Monetary Board;

(c) Other conditions provided by law; and

(d) Issuance of a Forward Obligational Authority (FOA) by the DBM for project loans or issuance of a DBCC resolution covering the full amount in the case of program loans, except for those undertaken by GOCCs. In the issuance of a FOA, the DBM shall consider the budgetary implications of foreign-assisted projects.

The Monetary Board shall, within thirty (30) days from the end of every quarter, submit to the Congress a report of its decisions on applications for loans to be contracted or guaranteed by the government or GOCCs which have the effect of increasing the foreign debt.

Expenditures

SECTION 18. Use of Government Funds. — Government funds shall be utilized in accordance with the appropriations authorized for the purpose and comply with applicable laws, rules and regulations, such as, but not limited to the following:

(a) Purchase of goods, infrastructure projects, and consulting services, including common-use supplies, shall be made in accordance with the provisions of R.A. No. 9184, its IRR and other guidelines issued thereon;

(b) Purchase of motor vehicles shall be made pursuant to A.O. No. 233, s 2008 as amended by A.O. No. 15, s. 2011, Budget Circular (B.C.) No. 2010-2 dated March 1, 2010, and other guidelines issued by agencies concerned;

(c) Payment of foreign travel expenses of government officials and employees for training, seminar or conference abroad when the foreign mission cannot sufficiently represent our country or travels necessitated by authorized international commitments, in accordance with E.O. Nos. 248 and 248-A, s. 1995 as amended by E.O. No. 298, s. 2004, and other guidelines issued thereon: PROVIDED, That no official or employee, including uniformed and military personnel of the DILG and DND, respectively, may be sent to foreign training, conference or attend international commitments when they are due to retire within one (1) year after the said foreign travel; and

(d) Provisions for fuel, parts, repair and maintenance of government vehicles. In case of transport crisis, such as that occasioned by street demonstrations, welgang bayan, floods, typhoons and other emergencies, government vehicles of any type may be made available to meet the emergency and may be utilized to transport for free commuters on a round-the-clock basis.

SECTION 19. Strict Adherence to Procurement Laws, Rules and Regulations. — All agencies of the government shall strictly adhere to the provisions of R.A. No. 9184, its IRR and GPPB guidelines in the procurement of goods, infrastructure projects and consulting services.

To promote transparency and achieve efficiency in the procurement process, the Philippine Government Electronic Procurement System shall be the primary source and repository of information on government procurement.

SECTION 20. Early Procurement Activities. — To ensure full budget utilization, timely contract implementation and efficient delivery of services, agencies are authorized to undertake procurement activities from pre-procurement conference until post-qualification of bids based on their proposed budget in the National Expenditure Program/General Appropriations Bill, Corporate Operating Budgets or Appropriations Ordinance, in accordance with the guidelines issued by the GPPB and/or DBM.

For multi-year contracts, the issuance of a Multi-year Obligational Authority (MYOA) by the DBM is required prior to commencement of any procurement activity.

Agencies may proceed with the awarding of contract upon approval or enactment of their respective appropriations or budget authorization document, as the case may be, and based on the amount authorized therein.

SECTION 21. Procurement of Common-Use Supplies. — All agencies of the government shall purchase its common-use supplies requirements from the Procurement Service (PS) as mandated under LOI No. 755 dated October 18, 1978, E.O. No. 359, s. 1989, A.O. No. 17, s. 2011, and such guidelines issued thereon. Common-use supplies shall refer to those listed in the PS catalogue, which shall be regularly updated to include all items commonly procured by government agencies such as, but not limited to, information and communications technology requirements, software licenses, and telecommunications services.

SECTION 22. Procurement of Critical Supplies. — All agencies of the government shall ensure the timely and sufficient provision of critical supplies, particularly those which by its nature, use or characteristic, the quantity and/or exact time of need cannot be accurately pre-determined. This includes fuel, equipment spare parts and other analogous items. For this purpose, said agencies shall resort to the use of Ordering Agreement in the procurement of critical supplies, subject to the provisions of R.A. No. 9184, its IRR, and GPPB guidelines.

SECTION 23. Printing Expenditures. — All agencies of the government shall engage the services of the National Printing Office, Bangko Sentral ng Pilipinas and APO Production Unit as recognized government printers (RGPs) for the printing of accountable forms and sensitive, high quality or high volume requirements, subject to the following:

(a) The recognized government printers shall undertake the printing requirements themselves and shall not sub-contract any portion thereof to other printers; and

(b) Any agency may be allowed to engage private printers for the printing of accountable forms and sensitive, high quality or high volume requirements upon certification by the RGPs that they are unable to service the said requirements.

SECTION 24. Inventory of Supplies, Materials and Equipment Spare Parts. — The inventory of supplies, materials and equipment spare parts to be procured out of available funds shall at no time exceed the normal three-month requirement.

The heads of agencies may increase their inventory of critical supplies, materials and equipment spare parts in any of the following instances: (i) in anticipation of cost increases; (ii) necessitated by a national emergency; (iii) when there is an impending shortage in said items; and (iv) when otherwise authorized in this Act or in the charter of the agency concerned. The purchase of stocks exceeding an agency's one-year requirement shall be subject to approval by the President of the Philippines, upon the joint recommendation of the Chairperson of the COA and the Secretary concerned.

Agencies may undertake emergency procurement of supplies, materials and equipment spare parts when there is an unforeseen contingency requiring immediate purchase subject to the conditions prescribed under R.A. No. 9184, its IRR and GPPB issuances.

SECTION 25. Implementation of Infrastructure Projects. — The heads of agencies of the government shall ensure all infrastructure projects under their coverage shall be implemented in locations, areas or sites that are not included in the critical geo-hazard areas or no build zones identified by the Mines and Geo-Sciences Bureau (MGB).

For those in the National Integrated Protected Area System (NIPAS) and other conservation areas, all agencies of the government shall ensure that measures to eliminate or minimize the risk of biodiversity loss are integrated in the planning and implementation of all infrastructure projects. No major infrastructure project may be undertaken therein, except those intended to enhance biodiversity.

The DPWH, in coordination with the DENR, shall determine the specifications of all infrastructure projects to be implemented within the NIPAS and conservation areas to guarantee its protection.

For other types of areas or zones, the DPWH, in coordination with the MGB, shall determine the level of prohibition and/or standards of construction of new infrastructure projects as well as the rehabilitation, improvement or repair of existing ones to ensure a safe living environment.

Roads, buildings and other critical public infrastructure, such as schools, hospitals and evacuation centers, must be designed and built to be resilient to earthquake, typhoon, flood and other extreme weather events.

SECTION 26. Use and Procurement of Information and Communications Technology Equipment. — The amounts authorized in this Act for Information and Communications Technology (ICT) equipment shall be used for the provision of personal computers inclusive of operating systems, basic software and other essential electronic devices to their respective officials and employees which shall be procured exclusively from the PS, as common-use supplies, pursuant to LOI No. 755, E.O. No. 359 and A.O. No. 17.

SECTION 27. Open Government Data. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs, and GOCCs shall adopt a policy of openness for all datasets created, collected, processed, disseminated, or disposed through the use of public funds to the extent permitted by applicable laws and subject to individual privacy, confidentiality, national security, or other legally-mandated restrictions. Openness means that datasets should be publicly available and accessible by default in open and machine-readable formats, and released with open license.

SECTION 28. Interoperability in Government Information and Communications Technology Systems. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs, and GOCCs shall adopt a policy of interoperability as to their respective ICT systems, hardware, software and data with other agencies. Interoperability means the ability to exchange and reuse government data and information in a uniform and efficient manner across multiple ICT systems and agencies.

Agencies, whenever applicable, are enjoined to use ICT products and services developed by the ICTO to ensure interoperability.

Implementation of this section shall be subject to the Philippine Electronic Government Interoperability Framework and other guidelines issued by the ICTO.

SECTION 29. Compliance with the Information Systems Strategic Plan. — The amounts authorized in this Act for ICT requirements shall be used in accordance with the Information Systems Strategic Plans (ISSP) duly endorsed by the ICTO.

The agencies concerned shall submit to the ICTO the terms of reference and/or technical specifications used in the procurement of their ICT requirements to validate its consistency with the approved ISSP and other national ICT policies.

SECTION 30. Digital Interconnection. — The amounts authorized in this Act for digital interconnection shall be used to install or enhance existing electronic on-line network for the open, speedy and efficient electronic on-line transmission and communications services, as well as use of electronic data or documents consistent with R.A. No. 8792, subject to the following:

(a) Agencies shall ensure that internet service providers to be procured by them are connected to the Philippine Internet Exchange for prompt and secure online access; and

(b) When the provision of cloud services is necessary, the service provider shall guarantee secure, exclusive and constant access.

SECTION 31. Multi-Year Contracts. — The DBM shall identify the requirements and/or prescribe guidelines before departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs may enter into multi-year contracts. This includes the issuance of a multi-year obligational authority (MYOA) prior to the procurement of multi-year contracts. The DBM, in setting the requirements for the issuance of a MYOA, shall consider the types of multi-year contracts if these are capital intensive or regular and recurring, such as, janitorial and security services, telecommunications requirements, provision for water, rental of office space and equipment, and lease-purchase agreements.

The obligation to be incurred for multi-year contracts shall in no case exceed the allotment released for the purpose during the year. Procurement covering multi-year contracts shall be subject to guidelines issued by the GPPB and/or the DBM.

For multi-year contracts, the full amount indicated in the MYOA issued by the DBM shall be the basis for the certification of availability of funds required under Section 33 hereof.

SECTION 32. Lease-Purchase Agreements. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs are authorized to use their respective annual rental appropriations for office space or building for the acquisition thereof under a lease-purchase agreement, subject to the following:

(a) The annual lease payment shall not exceed the annual rental appropriations at the time of signing of the lease-purchase agreement; and

(b) Any available MOOE allotments for Repair and Maintenance, Transportation and Delivery, Supplies and Materials, Utility Expenses, Printing and Binding, and Storage Expenses may be used by the agency to accelerate the lease purchase payments whenever such would lower the amortization cost or total contract price of the office space or building.

SECTION 33. Certification of Availability of Funds. — All expenditures or obligations chargeable against any authorized allotment shall require a certification of availability of funds from the agency chief accountant in accordance with Section 40, Chapter 5 and Section 58, Chapter 7, Book VI of E.O. No. 292. The certification of availability of funds sufficient to cover the cost of the contracted activities shall be contained in, and made part of, the contract duly signed by the chief accountant of the contracting agency pursuant to the provision of P.D. No. 1445.

SECTION 34. Harmonized Priority Research Agenda. — The DOST, in consultation with government research institutions and other agencies concerned, shall prepare a harmonized priority research agenda for the government covering all major research and development programs and projects or those costing One Hundred Million Pesos (P100,000,000) and above.

The harmonized priority research agenda shall be directly related to the priorities under the Philippine Development Plan (2011-2016) and consider, among others, the National Research and Development Extension Agenda and Programs for Agriculture and Fisheries (2011-2016) formulated and approved by the DA. The proposed harmonized priority research agenda shall be submitted for approval by the Director General of NEDA.

All appropriations in this Act intended for new research and development shall be released only if included in the approved Harmonized Priority Research Agenda, upon determination by the DA or DOST, as the case may be. In case there are new research programs or projects which need to be implemented prior to the approval of the harmonized priority research agenda, the agency concerned must first secure the approval of the Economic Development Cluster created under E.O. No. 43, s. 2011, through the Secretary of Finance as its Chairperson, prior to implementation of said new research programs or projects.

The DOST shall submit to the DBM, the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document, a copy of the approved Harmonized Priority Research Agenda. The Secretary of Science and Technology and the Agency's web administrator or his/her equivalent shall be responsible for ensuring that the approved Harmonized Priority Research Agenda is posted on the Agency's website.

SECTION 35. Programs and Projects Related to Gender and Development. — All agencies of the government shall formulate a Gender and Development (GAD) Plan designed to address gender issues within their concerned sectors or mandate and implement the applicable provisions under R.A. No. 9710 or the Magna Carta of Women, Convention on the Elimination of All Forms of Discrimination Against Women, the Beijing Platform for Action, the Philippine Plan for Gender-Responsive Development (1995-2025), and the Philippine Development Plan (2011-2016).

The GAD Plan shall be integrated in the regular activities of the agencies, which shall be at least five percent (5%) of their budgets. For this purpose, activities currently being undertaken by agencies which relate to GAD or those that contribute to poverty alleviation, economic empowerment especially of marginalized women, protection, promotion, and fulfillment of women's human rights, and practice of gender-responsive governance are considered sufficient compliance with said requirement. Utilization of the GAD budget shall be evaluated based on the GAD performance indicators identified by said agencies.

The preparation and submission of the annual GAD Plan and annual GAD Accomplishment Report shall be subject to the guidelines issued by the agencies concerned.

SECTION 36. Programs and Projects Related to Senior Citizens and Persons with Disability. — All agencies of the government shall formulate plans, programs and projects intended to address the concerns of senior citizens and persons with disability, insofar as it relates to their mandated functions, and integrate the same in their regular activities.

Moreover, all government infrastructures and facilities shall provide architectural or structural features, designs or facilities that will reasonably enhance the mobility, safety and welfare of persons with disability pursuant to Batas Pambansa Blg. 344 and R.A. No. 7277.

 

SECTION 37. Projects Related to the Youth. — All agencies of the government are encouraged to provide allocation for youth development projects and activities within the framework of the Philippine Youth Development Plan (2012-2016).

SECTION. 38. National Greening Program. — All agencies of the government shall plant trees in lands of the public domain in support of the National Greening Program under E.O. No. 26, s. 2011.

SECTION 39. Disaster Risk Reduction and Climate Change Adaptation and Mitigation Projects. — The implementation of programs, projects and activities authorized in this Act should contribute towards preventing the creation of new disaster risks, reducing existing disaster risks, building the resilience of local communities and the nation as a whole. The programs/projects shall also contribute towards achieving national targets for the SENDAI Framework for disaster risk reduction 2015-2030, the Philippines' Intended Nationally Determined Contributions (INDC) submitted in relation to the United Nations Framework on Convention on Climate Change (UNFFCC) 21st conference of the parties, and the UN Sustainable Development Goals (SDGs) for 2030, and mainstreaming disaster risk reduction and climate change adaptation and mitigation in all government policies, plans and programs pursuant to the Climate Change Act of 2009, as amended by the People's Survival Fund Act of 2012, and the Philippine Disaster Risk Reduction and Management Act of 2010.

SECTION 40. Maintenance and Operation of Dams. — As part of the disaster risk reduction program of the government, government agencies and government owned and controlled corporations (GOCCs) that have control or supervision over the major dams shall ensure that dams under their respective jurisdictions are properly maintained, managed and operated with updated and promulgated protocols. The agencies/GOCCs concerned shall take into account climate change and extreme weather events and ensure coordination with the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAG-ASA) on precipitation forecast. The agencies concerned shall also establish and maintain an efficient and effective early flood warning system and functional water level monitoring system that is periodically tested together with the local government units and communities at risk of flooding from dam water releases.

SECTION 41. Repair and Retrofitting of Government Structures. — In retrofitting bridges and other public infrastructure, the government shall give priority to areas considered to be highly vulnerable to seismic activity and shall ensure that the retrofitting shall result in disaster resilience, energy efficiency, and structural strength and integrity that could withstand the highest probable level of seismic activity in their areas.

SECTION 42. Institutional Linkage with the National Cultural Agencies. — In the implementation of programs, activities and projects authorized in this Act, agencies identified under R.A. No. 10066, the National Cultural Heritage Act of 2009, shall consult, coordinate and work closely with the National Commission for Culture and the Arts to ensure that their respective responsibilities embodied under R.A. No. 10066 are implemented.

SECTION 43. Protection of Built Heritage, Cultural Properties and Cultural Landscapes. — Alteration, renovation or demolition of government buildings and open spaces declared by government cultural agencies or presumed to be important cultural properties, including but not limited to provincial capitol buildings, city halls, municipal halls, monuments, fountains, parks and plazas, school, state colleges and universities, fortifications, lighthouses, bridges, public hospitals, train stations, museums, public libraries, stadiums, prisons and government offices, shall be undertaken only upon prior approval of the government cultural agencies and proper consultation with stakeholders and cultural groups to be administered by the NCCA. This includes the protection of the sight line with regard to built heritage, cultural properties and cultural landscapes.

In addition, in undertaking major infrastructure projects, the concerned department/agency shall be responsible specifically in the planning, design, construction, and maintenance of national roads and bridges as they impact on heritage structures or aspects of heritage conservation pursuant to Republic Act No. 10066 or the National Cultural Heritage Act of 2009. (CONDITIONAL IMPLEMENTATION — President's Budget Action Message, December 21, 2015, Volume II-B, page 819, R.A. No. 10717)

SECTION 44. Protection of Biodiversity. — All government agencies, offices and local government units shall ensure that protection of biological diversity is integrated and mainstreamed into their development programs and projects.

Moreover, to align with the 2015-2030 sustainable development goals, the Department of Education shall integrate biodiversity and its conservation in its curriculum, and the Commission on Higher Education, along with the State Universities and Colleges, shall set aside an amount of its research and outreach budgets for biodiversity baselining, inventories and monitoring in protected areas and identified key biodiversity areas.

SECTION 45. Energy Efficiency. — All national government agencies, local government units and government owned and controlled corporations shall embark on energy efficiency measures and adopt the use of energy efficient lighting, such as light-emitting diode (LED) lamp, in their office buildings, school buildings, hospitals, markets, parks, street lights and other public places.

SECTION 46. Employment of Contractual Personnel. — Contractual personnel may be hired by agencies as part of their organization, in order to perform specific vital activities or services which cannot be provided by their regular or permanent staff. The total annual Personnel Services requirements of contractual personnel, to cover salaries, and other personnel benefits and fixed expenditures, shall not exceed the lump sum appropriations for the purpose, except when there is an urgent need to hire contractual personnel in the implementation of the priority P/A/Ps, subject to approval of the DBM. In which case, the payment for contractual personnel shall be sourced from the Miscellaneous Personnel Benefits Fund.

Contractual personnel employed pursuant to this section shall be considered as an employee of the hiring agency but only during the period when their services are reasonably required.

SECTION 47. Extraordinary and Miscellaneous Expenses. — Appropriations authorized in this Act may be used for the annual extraordinary expenses of government officials with the following ranks and their equivalent, as may be determined by the DBM, not exceeding the amounts indicated:

(a) P264,000 for each Department Secretary;

(b) P108,000 for each Department Undersecretary;

(c) P60,000 for each Department Assistant Secretary;

(d) P45,600 for each head of bureau or organization of equivalent rank, and for each head of a Department Regional Office;

(e) P26,400 for each head of a Bureau Regional Office or organization of equivalent rank; and

(f) P19,200 for each Municipal Trial Court Judge, Municipal Circuit Trial Court Judge, and Shari'a Circuit Court Judge.

In addition, annual miscellaneous expenses not exceeding Seventy Two Thousand Pesos (P72,000) for each of the offices under the above named officials and their equivalent are authorized herein.

For the purpose of this section, extraordinary and miscellaneous expenses shall include, but not be limited to expenses incurred for:

(a) Meetings, seminars and conferences;

(b) Official entertainment;

(c) Public relations;

(d) Educational, athletic and cultural activities;

(e) Contributions to civic or charitable institutions;

(f) Membership in government associations;

(g) Membership in national professional organizations duly accredited by the Professional Regulation Commission;

(h) Membership in the Integrated Bar of the Philippines;

(i) Subscription to professional technical journals and informative magazines, library books and materials;

(j) Office equipment and supplies; and

(k) Other similar expenses not supported by the regular budget allocation.

In case of deficiency, the requirements for the foregoing purposes may be charged against available allotments of the agency concerned. No portion of the amounts authorized herein shall be used for the payment of salaries, allowances and other benefits, and confidential and intelligence expenses.

SECTION 48. Cultural and Athletic Activities. — An amount not exceeding One Thousand Five Hundred Pesos (P1,500) in a year, may be used for the purchase of uniform or costume and other related expenses in the conduct of cultural and athletic activities per employee-participant.

Personnel Amelioration

SECTION 49. Funding of Personnel Benefits. — Notwithstanding any provision of law to the contrary, all personnel costs of government personnel shall be chargeable against the funds from which their salaries are paid. If the personnel benefits costs, in whatever form, are partly sourced from the General Fund and partly from other sources, only the portion attributed to the personnel benefits cost chargeable against the General Fund shall be sourced therefrom in the payment of retirement and terminal leave benefits and pension.

In no case shall personnel benefits costs drawn from Special Accounts, Trust Funds or other sources of funds be chargeable against the General Fund of the National Government.

The personnel benefits costs of officials and employees on detail with other offices, including the representatives and support personnel of auditing units assigned to serve other offices or agencies, shall be chargeable against the appropriations of their parent agencies, except as otherwise authorized by the DBM.

Personnel benefits costs referred to in this section shall include salary increases, step increments, all kinds of allowances, benefits and incentives, monetized vacation and sick leave credits, government share in retirement and life insurance premiums, employees compensation insurance premiums, health insurance premiums and HDMF contributions, and other authorized benefits.

 

SECTION 50. Appropriations for Personnel Services. — The appropriations for Personnel Services under this Act shall be used for the payment of personnel benefits authorized by law to be given to National Government personnel, computed based on the Government Manpower Information System. Any available allotment for Personnel Services within a department or agency may be utilized by said department or agency for the payment of deficiencies in authorized personnel benefits.

SECTION 51. Remittance of Compulsory Contributions. — The government and employee share in the compulsory contributions to the Employees' Compensation Commission, PHILHEALTH, GSIS and HDMF pursuant to P.D. No. 626, as amended, R.A. No. 6111, R.A. No. 7875, as amended, R.A. No. 8291, and R.A. No. 9679, respectively, shall be remitted directly by departments, bureaus and offices of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs to the respective recipient agencies unless a different arrangement is agreed upon in writing between the DBM and the recipient agency.

Any proposed increase in government and employee compulsory contributions may only be implemented after consultation by the agency concerned with the DBM in order that the budgetary implications of such proposal be duly considered. The implementation of any increase in government and employee compulsory contributions, after said consultation, shall be made effective only upon inclusion thereof in an appropriations law.

SECTION 52. Authorized Deductions. — Deductions from salaries and other benefits accruing to any government employee, chargeable against the appropriations for Personnel Services, may be allowed for the payment of an individual employee's contributions or obligations due the following, and in the order of preference stated below:

(a) The BIR, PHILHEALTH, GSIS and HDMF;

(b) Non-stock savings and loan associations and mutual benefits associations duly operating under existing laws which are managed by and/or for the benefit of government employees;

(c) Associations, cooperatives, or provident funds organized and managed by government employees for their benefit and welfare;

(d) GFIs authorized by law and accredited by appropriate government regulating bodies to engage in lending;

(e) Licensed insurance companies; and

(f) Thrift banks and rural banks accredited by the BSP.

In no case shall the foregoing deductions reduce the employee's monthly net take home pay to an amount lower than Three Thousand Five Hundred Pesos (P3,500).

SECTION 53. Personnel Economic Relief Allowance. — In order to supplement the salaries of government personnel covered by R.A. No. 6758, as amended, Personnel Economic Relief Allowance (PERA), in the amount of Two Thousand Pesos (P2,000) per month, is granted to the following:

(a) Civilian government personnel stationed in the Philippines, whether occupying regular, contractual or casual positions, appointive or elective; and

(b) Military and uniformed personnel.

Government personnel stationed abroad shall be granted overseas allowances to defray the cost of their living expenses and shall no longer be entitled to receive PERA for the duration of their station abroad.

The grant of PERA shall be subject to the rules and regulations prescribed under B.C. No. 2009-3 dated August 18, 2009 and other guidelines issued by the DBM.

SECTION 54. Uniform or Clothing Allowance. — An amount not exceeding Five Thousand Pesos (P5,000) per year is hereby authorized for the payment of uniform or clothing allowance to each qualified government employee, subject to B.C. No. 2012-1 dated February 23, 2012 and other guidelines issued by the DBM.

SECTION 55. Magna Carta Benefits. — The payment of magna carta benefits of public health workers, school teachers, social workers, scientists, engineers and researchers, and other science and technology personnel in the government shall be limited to the benefits and rates appropriated in this Act for the purpose, subject to the rules on appropriations for Personnel Services under Section 50 hereof.

Realignment of funds for the payment of magna carta benefits shall be subject to approval of the DBM.

SECTION 56. Special Counsel Allowance. — Government lawyers designated to assume the duties of a legal officer are hereby authorized an allowance of Two Thousand Five Hundred Pesos (P2,500) for each appearance or attendance to court hearings, subject to the following:

(a) The government lawyer has been deputized by the Office of the Solicitor General (OSG) or authorized by the head of agency to assist the OSG or prosecutors, as the case may be;

(b) The court appearance is not pursuant to motions for extension or postponement of hearing; and

(c) The aggregate allowance per month shall not exceed Ten Thousand Pesos (P10,000) per month.

Court as used in this section shall pertain to those under the Judiciary. In no case shall special counsel allowance be granted to government lawyers appearing before quasi-judicial and administrative agencies.

SECTION 57. Hazard Duty Pay. — Hazard duty pay shall be granted only to government personnel who are actually assigned to, and performing their duties in, strife-torn or embattled areas as may be determined and certified by the Secretary of National Defense and for the duration of such assignment.

The grant of hazard duty pay shall be subject to the rules and regulations prescribed under B.C. No. 2005-4 dated July 13, 2005 and such and other guidelines issued by the DBM.

SECTION 58. Honoraria. — Honoraria may be paid only to the following:

(a) Teaching personnel of the DepEd, TESDA, SUCs and other educational institutions, engaged in actual classroom teaching, whose teaching load is outside of the regular office hours or in excess of the regular load;

(b) Those who act as lecturers, resource persons, coordinators and facilitators in seminars, training programs, and other similar activities in training institutions;

(c) Chairpersons and members of commissions, boards, councils, and other similar entities, including personnel thereof who are not paid salaries nor per diems but compensated in the form of honoraria as provided by law, rules and regulations;

(d) Those who are involved in science and technological activities and render services beyond their regular workload;

(e) Officials and employees assigned to special projects, subject to the following conditions;

i. Said special projects are reform-oriented or developmental, contribute to the improvement of service delivery and enhancement of the performance of the core functions of the agency, and have specific timeframes and deliverables in accomplishing objectives and milestones set by the agency for the year; and

ii. Such assignment entails rendition of work in addition to, or over and above, their regular workload.

 In these instances, the rates of honoraria shall depend on the level of responsibilities, nature of work rendered, and extent of individual contribution to produce the desired outputs. The total honoraria received from all special projects shall not exceed twenty-five percent (25%) of the annual basic salaries; and

(f) Officials and employees authorized to receive honoraria under R.A. No. 9184 and its IRR.

The grant of honoraria to the foregoing shall be subject to the guidelines prescribed under B.C. No. 2003-5 dated September 26, 2003, as amended by B.C. No. 2007-1 dated April 23, 2007 and N.B.C. No. 2007-510 dated May 8, 2007, B.C. No. 2007-2 dated October 1, 2007, B.C. No. 2004-5A dated October 7, 2005, as amended by B.C. No. 2007-3 dated November 29, 2007, DBM and DOST J.C. No. 1 dated June 25, 2013 and other guidelines issued by the DBM.

SECTION 59. Representation and Transportation Allowances. — Government officials with the following ranks and their equivalent, as determined by the DBM, while in the actual performance of their respective functions, are hereby authorized monthly commutable representation and transportation allowances at the rates indicated below, for each type of allowance:

(a) P14,000 for Department Secretaries;

(b) P11,000 for Department Undersecretaries;

(c) P10,000 for Department Assistant Secretaries;

(d) P9,000 for Bureau Directors and Department Regional Directors;

(e) P8,500 for Assistant Bureau Directors, Department Assistant Regional Directors, Bureau Regional Directors, and Department Service Chiefs;

(f) P7,500 for Assistant Bureau Regional Directors; and

(g) P5,000 for Chief of Divisions, identified as such in the Personnel Services Itemization and Plantilla of Personnel.

The grant of representation and transportation allowances shall be subject to the following:

(a) Transportation allowance, whether in full or partial amounts, shall not be granted to officials who are assigned or actually using government motor transportation. Officials who are assigned government motor transportation, but are not able to use said vehicle for justifiable reason, as determined by the DBM, may be granted transportation allowance during the said period;

(b) Representation and transportation allowances of local government officials who are of equivalent rank to the foregoing officials, as determined by the DBM, shall be at the same percentages as the salary rates authorized under R.A. No. 6758, as amended, and subject to the Personnel Services limitations under Section 325 (a) of R.A. No. 7160; and

(c) No amount of representation or transportation allowances, whether commutable or reimbursable, which exceed the rates authorized under this section may be granted to the foregoing officials. Previous administrative authorizations inconsistent with the rates and conditions specified herein shall no longer be valid and payment shall not be allowed.

SECTION 60. Official Vehicles and Transport. — Government motor transportation may be used by the following officials with costs chargeable to the appropriations authorized for their respective offices:

(a) The President of the Philippines;

(b) The Vice-President;

(c) The President of the Senate;

(d) The Speaker of the House of Representatives;

(e) The Chief Justice and Associate Justices of the Supreme Court;

(f) The Presiding Justices of the Court of Appeals, Court of Tax Appeals, and the Sandiganbayan;

(g) The Department Secretaries, Undersecretaries, Assistant Secretaries and officials of equivalent rank;

(h) Ambassadors, Ministers Plenipotentiary and Consuls in charge of consulates, in their respective stations abroad;

(i) The Chief of Staff, the Vice-Chief of Staff, and the Commanding Generals of the Major Services of the AFP;

(j) Heads of Constitutional Commissions and the Ombudsman;

(k) Bureau Directors, Department Regional Directors and Bureau Regional Directors; and

(l) Those who may be specifically authorized by the President of the Philippines, with respect to the Executive, the Senate President, with respect to the Senate, the Speaker, with respect to the House of Representatives, and the Chief Justice, in the case of the Judiciary.

SECTION 61. Quarters Privileges. — Officials who are transferred from one station to another by virtue of agency policies on reshuffling or rotation of personnel and do not own houses or rooms therein, shall be provided free quarters within their office premises.

Where there is not enough space to be used as quarters, the agency may rent buildings or rooms which shall serve as quarters for said officials, subject to the rules as may be prescribed by the DBM. For those who opt for more expensive quarters other than those rented by their agencies, such preferred quarters may be secured provided that the difference in amount between the one preferred by the officials and that rented by their respective agencies shall be paid by the concerned officials.

Government personnel who are not entitled to quarters privileges but are allowed to use government quarters shall be charged the corresponding cost of rentals subject to guidelines as may be issued by the DBM.

SECTION 62. Year-End Bonus and Cash Gift. — The year-end bonus equivalent to one (1) month basic salary and additional cash gift of Five Thousand Pesos (P5,000) provided under R.A. No. 6686, as amended by R.A. No. 8441, shall be granted to all National Government personnel, whether under regular, temporary, casual or contractual status, on full-time or part-time basis, subject to the following:

(a) At least a total of four (4) months of service including leaves of absence with pay have been rendered during the year, and who are still in the service by October 31 of each year;

(b) One half (1/2) of said year-end bonus and cash gift may be paid not earlier than May 1 to employees who have rendered at least a total of four (4) months of service, regardless of whether or not they will still be in the service by October 31 of the same year;

(c) A proportionate share of the remaining balance of the year-end bonus and cash gift shall be granted to those who retires or is separated from government service before October 31, based on the monthly basic salary immediately preceding the date of retirement or separation; and

(d) The provisions of B.C. No. 2010-1 dated April 28, 2010 and other guidelines issued by the DBM.

Personnel of GOCCs and LGUs are likewise entitled to year-end bonus and cash gift chargeable against their respective corporate and local funds.

SECTION 63. Use of Appropriations for Retirement Gratuity and Terminal Leave. — Appropriations authorized in this Act to cover the payment of retirement benefits shall be released directly to the agencies concerned computed based on the provisions of, and subject to the conditions prescribed in, applicable retirement laws, rules and regulations.

Unless authorized by law and duly covered by guidelines issued by the DBM, public funds shall not be used for the payment of salary increases or adjustments resulting from automatic promotions with the intent of increasing the retirement and terminal leave benefits of government personnel.

The payment of any unauthorized retirement benefits shall be null and void and shall accordingly be refunded by the beneficiary-employee. The officials and employees who authorized, allowed, or connived with others in the payment of any unauthorized retirement benefits shall be subject to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

SECTION 64. Transportation Expenses of Observers. — Observers invited to sit in proceedings of the Bids and Awards Committee in accordance with Section 13 of R.A. No. 9184 is allowed to reimburse not more than Eight Hundred Pesos (P800) of transportation expenses of every meeting attended: PROVIDED, That the aggregate monthly reimbursable transportation expenses shall not exceed Three Thousand Two Hundred Pesos (P3,200) for every observer. Said amount shall be chargeable against the MOOE of agencies.

Implementation of this Section shall be subject to budgeting, accounting, and auditing rules and regulations.

Release and Use of Funds

SECTION 65. Availability of Appropriations. — Appropriations authorized in this Act for MOOE and Capital Outlays shall be available for release and obligation for the purpose specified, and under the same special provisions applicable thereto, for a period extending to one fiscal year after the end of the year in which such items were appropriated.

A report on these releases and obligations shall be submitted to the House Committee on Appropriations and Senate Committee on Finance, either in printed form or by way of electronic document.

SECTION 66. Prohibition against Impoundment of Appropriations. — No appropriations authorized under this Act shall be impounded unless there is an unmanageable National Government budget deficit and subject to the rules and regulations issued by the DBM.

Unmanageable National Government budget deficit as used in this section shall be construed to mean that: (i) the actual National Government budget deficit has exceeded the quarterly budget deficit targets consistent with the full-year target deficit as indicated in the BESF submitted by the President to Congress pursuant to Section 22, Article VII of the Constitution; or (ii) there are clear economic indications of an impending occurrence of such condition, as determined by the DBCC and approved by the President.

SECTION 67. Prohibition against Retention or Deduction of Funds. — Fund releases from appropriations provided in this Act shall be transmitted to the agency concerned, subject to Section 4 hereof, applicable special and general provisions, and budgeting rules and regulations. No retention or deduction as reserves or overhead shall be made, except as authorized by law, the general or special provisions in this Act, or upon direction of the President of the Philippines.

SECTION 68. Direct Release of Funds to Regional Offices and Operating Units. — Funds appropriated in this Act shall be released directly to the regional offices and operating units in accordance with the approved distribution of expenditures.

The DBM shall furnish copies of fund releases to regional offices or operating units to the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document.

SECTION 69. Prohibition on the Use of Public Funds, Money Deposited in Trust, Equipment and Facilities Owned or Controlled by the Government for an Election Campaign or Partisan Political Activity. — Any person who shall use public funds under any guise whatsoever, directly or indirectly, for any election campaign or for any partisan political activity shall be personally liable to the government for the full amount committed and expended.

Violation of this provision shall subject the erring person to penalties as provided by law.

SECTION 70. Lump-Sum Appropriations. — Release of lump-sum appropriations shall be made upon compliance with the requirements under the applicable general and/or special provisions and submission by the agency concerned of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292, copy furnished the Commission on Audit, the House Committee on Appropriations and the Senate Committee on Finance. The Special Budget shall include the complete details of the programs, activities and projects covering the lump-sum appropriations with the corresponding cost up to the lowest level i.e., provincial, city or municipal level, as the case may be.

SECTION 71. Requirements on Fund Transfers to Civil Society Organizations. — Fund transfers by agencies of the government to Civil Society Organizations (CSOs) shall be made only when earlier fund releases to said entities, if any, have been liquidated in accordance with accounting and auditing rules and regulations. Government agencies shall remain accountable for the funds transferred by them to CSOs. They shall likewise ensure compliance by CSOs with the provisions of R.A. No. 9184, its IRR and GPPB guidelines, as well as budgeting, accounting and auditing rules and regulations in the procurement of Goods, Infrastructure Projects, and Consulting Services using funds transferred to them.

Agencies may only deal with accredited CSOs as partners in the implementation of their programs, activities and projects. The DSWD shall accredit CSOs following the guidelines issued for the purpose. The Secretary of Social Welfare and Development and the Agency's web administrator or his/her equivalent shall be responsible for posting the list of accredited CSOs and update the same every quarter on the Agency's website.

Agencies partnering with CSOs in the implementation of their programs, activities and projects shall submit to the House Committee on Appropriations and the Senate Committee on Finance an annual report on the funds transferred to CSOs, either in printed form or by way of electronic document. The respective heads of the agencies and web administrators or their equivalent shall be responsible for ensuring that said reports are likewise posted on their respective agency websites.

 

SECTION 72. Authority to Use Savings. — The President of the Philippines, the Senate President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings in their respective appropriations to augment actual deficiencies incurred for the current year in any item of their respective appropriations. An item of appropriation shall pertain to the amount appropriated for a program, activity or project authorized in this Act.

The foregoing constitutional officers authorized to use savings shall be responsible for ensuring that a semestral and annual report on their respective use of savings shall be submitted to the Senate Committee on Finance and the House Committee on Appropriations, copy furnished the DBM. The report shall indicate, among others, the amount of savings generated, the sources and grounds used therefor, and the existing program, activity or project in their respective appropriations augmented. They shall likewise ensure that said reports are posted on their respective websites.

SECTION 73. Meaning of Savings. — Savings refer to portions or balances of any released appropriations in this Act which have not been obligated as a result of any of the following:

(a) Final discontinuance or abandonment of an ongoing program, activity or project (P/A/P) by the head of agency concerned due to causes not attributable to the fault or negligence of the said agency which would not render it possible for the agency to implement said P/A/P during the validity of the appropriations;

(b) Non-commencement of the P/A/P for which the appropriations is released. For this purpose, non-commencement shall refer to the inability of the agency or its duly authorized procurement agent to obligate the released allotment and implement the P/A/P due to natural or man-made calamities or other causes not attributable to the fault or negligence of the agency concerned during the validity of the appropriations;

(c) Decreased cost resulting from improved efficiency during the implementation or until the completion by agencies of their P/A/Ps: PROVIDED, That the agencies will still be able to deliver the targets and services as approved in this Act; and

(d) Difference between the approved budget for the contract and the contract award price including any variations required for the project.

PROVIDED, HOWEVER, That savings may likewise refer to available balances of appropriations arising from unused compensation and related costs pertaining to: (i) unfilled, vacant or abolished positions; (ii) non-entitlement to allowances and benefits; (iii) leaves of absence without pay; and (iv) unutilized pension and retirement benefits arising from death of pensioners, decrease in the number of retirees, or other related causes.

Programmed appropriations which have not been released or allotments not obligated due to the fault of the agency concerned shall not be considered savings.

SECTION 74. Meaning of Augmentation. — Augmentation is the act of the constitutional officers authorized to use savings in their respective appropriations to cover a deficiency in any existing P/A/P within their respective offices. A deficiency in a P/A/P may result from:

(a) Unforeseen modifications or adjustments in the P/A/P; or

(b) Re-assessment in the use, prioritization and/or distribution of resources:

PROVIDED, That the particulars of the expenditures to be funded from savings are within the scope of, or covered by an existing P/A/P. The existence of a P/A/P regardless of the availability of allotment class/es is sufficient for the purpose of augmentation.

In no case shall a non-existent P/A/P be funded by augmentation from savings or by the use of an appropriations otherwise authorized in this Act.

SECTION 75. Priority in the Use of Savings. — In the use of savings, priority shall be given to the payment of compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law and in this Act, as well as the implementation of priority P/A/Ps covered in this Act.

SECTION 76. Rules in the Realignment of Funds. — As a general rule, departments, bureaus and offices of the national government, including Constitutional Offices enjoying fiscal autonomy and SUCs shall spend what is programmed in their respective appropriations in this Act. In exceptional circumstances, realignment may be made within a P/A/P subject to approval of the following:

(a) The heads of agencies for: (i) realignment of an object of expenditure (Salaries and Wages, Travelling Expenses, or Investment Outlays) within an allotment class (Personnel Services, MOOE or Capital Outlays); and (ii) project modifications authorized in the special provisions in this Act;

(b) The DBM in the following realignments: (i) for the payment of magna carta benefits authorized under Section 55 hereof; (ii) from one allotment class to another; (iii) from one operating unit to another; (iv) within a special purpose fund; and (v) within the purpose authorized under the Unprogrammed Appropriations; and

(c) The President of the Philippines for the payment of intelligence funds within the executive branch:

PROVIDED, That realignment within and from Capital Outlays may only be done until June 30, 2016, except if due to the occurrence of calamities: PROVIDED, FURTHER, That realignment will not entail an increase in the total amount appropriated for a P/A/P.

Realignment of funds refers to the reallocation, modification or change in the details within an existing P/A/P. In the case of programs with several activities, realignment shall be limited within each of the activity.

SECTION. 77. Rules in the Grant of Collective Negotiation Agreement Incentive. — Departments, bureaus, and offices of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCS may grant collective negotiation agreement (CNA) Incentive sourced from the allowable MOOE allotments identified by the DBM, subject to the following:

(a) There is a valid CNA executed between the agency and the recognized employee organization which includes a provision on cost-cutting measures to be undertaken collectively by the agency and its personnel;

(b) The one-time annual payment of CNA Incentive shall be made through a written resolution signed by agency representatives from both labor and management, and approved by the agency head;

(c) The CNA Incentive that may be granted shall be limited to the amount determined by the DBM; and

(d) The payment of CNA Incentive shall be subject to approval by the DBM. Any excess amounts from the allowable MOOE allotments after payment of the CNA Incentive shall revert to the General Fund.

GOCCs and LGUs may likewise grant CNA Incentive to their respective personnel, subject to the policies, rules and regulations issued by the DBM.

SECTION 78. Mandatory Expenditures. — The amounts programmed for petroleum, oil and lubricants, water, illumination and power services, telephone and other communication services, and rental expenses shall be disbursed exclusively for such items of expenditures. Any available allotment from these items after taking into consideration the agency's full year requirements may be realigned only in the last quarter and subject to the provisions of Section 76 hereof.

Disbursements or expenditures of agencies in violation of this section shall be void, and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

SECTION 79. Expenditures for Business-Type Activities. — Funds for the procurement of supplies and materials intended to be utilized in the conduct of business-type activities shall be disbursed exclusively for such business-type activity. In no case shall said appropriations be used for any other purpose.

Disbursements or expenditures by agencies in violation of this section shall be void, and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

SECTION 80. Intelligence Funds. — No appropriations authorized in this Act shall be released or disbursed for intelligence activities, including amounts sourced from savings, unless approved by the President of the Philippines, or specifically identified and authorized as intelligence fund in this Act. Agencies utilizing intelligence funds shall submit to the President of the Philippines a quarterly report on the accomplishments in the use of said funds.

Intelligence expenses refer to those related to intelligence information gathering activities of uniformed and military personnel, and intelligence practitioners that have direct impact to national security.

Implementation of this section shall be subject to COA-DBM-DILG-GCG-DND J.C. No. 2015-01 dated January 8, 2015 and such other guidelines issued by agencies concerned.

SECTION 81. Confidential Funds. — Confidential funds authorized in this Act shall be released or disbursed only upon approval of the Department Secretary concerned. Agencies utilizing confidential funds shall submit to the President of the Philippines and both Houses of Congress a quarterly report on the accomplishments in the use of said funds.

Confidential expenses refer to those related to surveillance activities in civilian government agencies that are intended to support the mandate or operations of the agency.

Implementation of this section shall be subject to COA-DBM-DILG-GCG-DND J.C. No. 2015-01 dated January 8, 2015 and such other pertinent guidelines issued by agencies concerned.

SECTION 82. Limitations on Cash Advance and Reportorial Requirements. — Notwithstanding any provision of law to the contrary, cash advances shall not be granted until such time that the earlier cash advances availed of by the officials or employees concerned shall have been liquidated in accordance with accounting and auditing rules and regulations.

 

For this purpose, the head of the agency and the COA auditor shall be jointly responsible for the preparation and submission to the House Committee on Appropriations and Senate Committee on Finance, either in printed form or by way of electronic document, the Annual Report on Cash Advances indicating the names of the recipients, the items of expenditures for which said cash advances were disbursed, and the dates of liquidation as reflected in the Agency Books of Accounts.

SECTION 83. Use of Funds for Foreign-Assisted Projects. — The amounts appropriated in this Act for the implementation of foreign-assisted projects, composed of loan proceeds and peso counterpart components shall be utilized in accordance with the rules and regulations prescribed under DBM-COA-DOF J.C. No. 2-97 dated March 31, 1997.

SECTION 84. Monitoring Implementation Plan. — Departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs, as well as GOCCs and LGUs receiving subsidy from the National Government shall prepare and submit to the DBM, either in printed form or by way of electronic document, a Monitoring Implementation Plan (MIP) showing the vital information or results chain starting with inputs, moving through the milestone activities and their implementation timelines, processes, outputs and immediate outcomes as bases for estimating monitoring costs of programs and projects. It shall likewise consider the commitment and accountability of the agencies as identified in this Act.

The agency concerned shall submit to the DBM and the House Committee on Appropriations and the Senate Committee on Finance, quarterly and annual reports vis-a-vis the MIP within thirty (30) days from the end of each quarter and year, respectively. The head of the agency concerned and the Agency's web administrator or his/her equivalent shall be responsible for ensuring that the MIP and said reports are posted on the Agency's website.

SECTION 85. Disbursement of Funds. — Public funds for obligations incurred with proper authorization shall be disbursed only through the BTr and/or authorized government servicing banks under the Modified Disbursement System, subject to guidelines issued thereon.

SECTION 86. Electronic Payments in Government Disbursements. — Departments, bureaus and offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs and GOCCs shall adopt the use of electronic payment in the disbursement of public funds.

In cases when the adoption of electronic payment is impracticable, agencies shall submit to the DBM, within sixty (60) days from the effectivity of this Act, the reasons therefor and a plan to ensure compliance.

SECTION 87. Personal Liability of Public Officials and Employees for the Incurrence or Payment of Unauthorized or Unlawful Obligation or Expenditure. — Any and all public officials or employees who will authorize, allow or permit, as well as those who are negligent in the performance of their duties and functions which resulted in the incurrence or payment of unauthorized and unlawful obligations or expenditure shall be, personally liable to the government for the full amount committed or expended and, subject to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292.

SECTION 88. Reversion of Unexpended Balances of Appropriations. — Notwithstanding any provision of law to the contrary, unexpended balances of appropriations authorized in this Act shall revert to the General Fund at the end of the validity of appropriations provided under Section 65 hereof and shall not thereafter be available for expenditure except by subsequent legislative enactment.

SECTION 89. Organizational Structure and Staffing Pattern Changes. — Notwithstanding any provision of law to the contrary and within the limits of the appropriations authorized in this Act, the President of the Philippines is authorized to create new offices and modify the existing organizational structure of the agencies in the Executive branch, as well as create new positions or modify existing ones whenever public interest so requires. The DBM may approve minor changes in the organizational structure and staffing pattern of agencies, and create positions up to a division chief and equivalent level under the Executive branch.

SECTION 90. Institutional Strengthening and Productivity Improvement in Agency Organization and Operations. — Heads of departments, bureaus, offices, and instrumentalities under the Executive branch shall adopt institutional strengthening measures to enhance productivity and improve service delivery. For this purpose, they shall: (i) conduct a comprehensive review of their respective mandates, missions, objectives and functions, systems and procedures, and programs, activities and projects; (ii) identify areas where improvements are necessary and more resources need to be rechannelled; (iii) determine the functions, programs, activities and projects that could be scaled down, phased out or abolished; and (iv) recommend the corresponding structural, functional and operational adjustments to streamline the organization and operations of the agency and improve its performance and productivity.

In the pursuit of said institutional strengthening efforts, heads of agencies may propose the: (i) creation, abolition, renaming, consolidation or merger of bureaus, offices and units within their coverage; or (ii) creation, abolition, reclassification, conversion or transfer of existing positions, from one unit to another. In either instance, the government shall not incur additional cost.

The President of the Philippines or the DBM, as the case may be, is authorized to approve the organizational and staffing modifications needed in streamlining and improving productivity in agency organization and operations, in accordance with Section 89 hereof.

SECTION 91. Reorganization of Administrative Regions. — The appropriations provided in this Act for the regional/field offices of national government agencies in Region IV-B may be utilized for the requirements of Region VI under E.O. No. 429, s. 2005 upon approval by the President of the Philippines of the implementation plan to be submitted by the DILG under A.O. No. 129, s. 2005.

Likewise, the appropriations provided in this Act for the regional and/or field offices of national government agencies in Negros Oriental and Negros Occidental may be utilized to implement the newly created Negros Island Region under E.O. No. 183, s. 2015 upon finalization of the roadmap for the Region's institutional arrangement, including establishment of the Regional Center.

SECTION 92. Allocation for the Autonomous Region in Muslim Mindanao in the Budget. — National government agencies shall ensure that the requirements of ARMM are provided in the implementation of nationwide programs, activities and projects. The funds for the purpose shall be released based on, and made only upon submission by the implementing agencies concerned to the DBM, copy furnished the ARGMM, of the allocation for ARMM per province. The respective heads of the implementing agencies shall be responsible for ensuring that the amounts allocated for ARMM per province are posted on their respective agency websites.

The ARGMM shall likewise submit to the DBM and the implementing agencies concerned separate quarterly reports on the utilization of said amounts per province, either in printed form or by way of electronic document. The Regional Governor of ARGMM shall be responsible for ensuring that said reports are likewise posted on the website of the ARGMM.

SECTION 93. Internal Revenue Allotment of LGUs. — The IRA, which is automatically appropriated, shall be apportioned among LGUs, including provinces, cities, and municipalities created, approved, and ratified in 2015 in accordance with the allocation formula prescribed under Section 285 of R.A. No. 7160, taking into consideration the following:

(a) The land area shall be based on the FY 2001 Land Management Bureau (LMB) certified Masterlist of Land Area unless the FYs 2004 and 2007 LMB certified Masterlist of Land Area has been validated by the DILG, NAMRIA and representatives of the Leagues of Provinces, Cities and Municipalities, and endorsed by the Secretary of DENR and the Regional Secretary of the ARMM to DBM on or before December 31, 2015; and

(b) The population shall be based on the FY 2010 Presidential Proclamation on the Official Population Count of the Philippines by Province, City, Municipality and Barangay.

All valid adjustments, changes, modifications, or alterations in any of the factors affecting the computation of IRA that occurred or happened, including final and executory court decisions made effective, during the current fiscal year, shall only be considered and implemented by the DBM in the subsequent fiscal year from receipt by the DBM of the notice of said change.

LGUs shall include in their budgets income both from local and external sources, and receipts from borrowings, including the amount of their IRA, as identified by the DBM, which shall be approved by their respective sanggunian. Member-municipalities of the Partido Development Administration may charge the capitalization requirement under R.A. No. 7820 against their respective IRA.

Enforcement of the Personnel Services limitations under Sections 325 (a) and 331 (b) of R.A. No. 7160 shall be waived to enable LGUs to: (i) absorb the cost of hospital services transferred from provinces to newly created cities; (ii) fund the initial year requirements for newly created mandatory positions in the LGUs, as confirmed by DBM; (iii) pay the CNA incentives of their employees upon compliance with the rules and regulations issued by the DBM; (iv) pay the retirement and terminal leave benefits of their employees; and (v) pay the minimum year-end bonus of One Thousand Pesos (P1,000) for the punong barangay and Six Hundred Pesos (P600) for other mandatory barangay officials, and their cash gifts.

 

The IRA and all LGU shares appropriated herein shall be released directly by the BTr to the LGU beneficiaries only through authorized government servicing banks.

SECTION 94. Implementation of Nationally Funded Projects. — Pursuant to Section 17 (c) of R.A. No. 7160, projects, facilities, programs and services funded under this Act shall be implemented by the appropriate national government agency irrespective of the nature and location of such project, facilities, programs and services. In cases where the National Government designates LGUs as implementing agencies for public works and infrastructure projects and other programs, services and facilities, including the construction of local roads and facilities appropriated in this Act, the LGU concerned shall comply with the following:

(a) The LGU has the capability to implement the foregoing by administration and in accordance with the design, plan, specifications, and such other standards and policies of the National Government;

(b) The LGU-recipient of nationally funded public works and infrastructure projects and other programs, services and facilities shall commit to fund the cost of maintenance and repairs thereof, except roads and bridges; and

(c) The amount released to the LGUs shall be recorded as trust funds to be used for the specified purpose.

The LGU-implementing agency shall submit to the DBM, the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document, quarterly reports on fund utilization and accomplishments. The Local Chief Executive and the LGU's web administrator or his/her equivalent shall be responsible for ensuring that said reports are likewise posted on the respective LGU website.

SECTION 95. Submission of Annual Reports and Audited Financial Statements on Accounts Deposited Outside of the National Treasury. — All departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs authorized by law to retain and/or use income and deposit the same outside of the National Treasury shall submit to the DBM, the House Committee on Appropriations and the Senate Committee on Finance their respective audited financial statements and annual reports on the utilization of funds. The statement and report shall include the beginning balance, income collected and its sources, expenditures, and ending balance for the preceding fiscal year.

SECTION 96. Report on Commission on Audit Findings and Recommendations. — Within sixty (60) days from receipt of the COA Annual Audit Report, agencies concerned shall submit to the COA, either in printed form or by way of electronic document, a status report on the actions taken on said audit findings and recommendations using the prescribed form under COA Memorandum No. 2014-002 dated March 18, 2014. They shall likewise furnish the DBM, the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document, a copy of said reports.

The head of agency concerned and the agency's web administrator or his/her equivalent shall be responsible for ensuring that said status reports are posted on the agency's website.

Failure to submit said statement and report shall, render any disbursement from said income void and, subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5, and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.

SECTION 97. Submission of Reports. — Within thirty (30) days after the end of each quarter, departments, bureaus, offices, and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy and SUCs, shall submit the following, either in printed form or by way of electronic document:

(a) Quarterly Financial and Physical Accomplishment Reports, including narrative descriptions to the House Committee on Appropriations and Senate Committee on Finance, copy furnished the DBM and COA; and

(b) Budget and Financial Accountability Reports to the DBM and COA, subject to COA and DBM J.C. No. 2014-1 dated July 1, 2014.

The DBM shall likewise submit to the House Committee on Appropriations and the Senate Committee on Finance, either in printed form or by way of electronic document, quarterly reports on releases from, and balances of, Special Purpose Funds, Supplemental Appropriations, Continuing Appropriations and Automatic Appropriations as well as realignment of funds approved by it pursuant to the general provisions of this Act.

Failure to comply with any of the foregoing shall result in the automatic suspension of the salaries of the responsible official and/or employee until they have complied with the above requirements pursuant to Section 57, Chapter 6, Book VI of E.O. No. 292. Repeated failure or refusal of said official or employee to submit the above reports without any justifiable cause may be a ground for administrative disciplinary action, subject to pertinent civil service rules and regulations. The head of agency shall be responsible for ensuring compliance with this penalty provision.

SECTION 98. Transparency is Infrastructure Projects. — All agencies of the government shall post the following on their respective websites, within the period indicated:

(a) The project title, location and detailed description; detailed estimates in arriving at the Approved Budget for the Contract; and winning contractor and the detailed estimates of the bid as awarded, within thirty (30) calendar days from entering into contract; and

(b) The detailed actual cost of the project; and variation orders issued, if any, within thirty (30) calendar days from the issuance of a certificate of completion.

The heads of the agencies and web administrators or their equivalent shall be responsible for ensuring compliance with this section.

SECTION 99. Transparency Seal. — To enhance transparency and enforce accountability, all agencies of the government shall maintain a Transparency Seal to be posted on their websites. The Transparency Seal shall contain the following: (i) the agency's mandates and functions, names of its officials with their position and designation, and contact information; (ii) approved budgets and corresponding targets, immediately upon approval of this Act; (iii) realignments made pursuant to the general and special provisions in this Act; (iv) annual procurement plan/s and contracts awarded with the winning supplier, contractor or consultant; (v) major programs and projects categorized in accordance with the five key results areas under E.O. No. 43, s. 2011 and their target beneficiaries; (vi) status of implementation, evaluation and/or assessment reports of said programs or projects; (vii) Budget and Financial Accountability Reports, pursuant to COA and DBM J.C. No. 2014-1 dated July 1, 2014; and (viii) annual reports on the status of income authorized by law to be retained and/or used and be deposited outside of the National Treasury, which shall include the legal basis for its retention and/or use, the beginning balance, income collected and its sources, expenditures, and ending balance for the preceding fiscal year.

The heads of the agencies and their web administrators or their equivalent shall be responsible for ensuring compliance with this section.

The DBM shall post on its website the status of compliance by all agencies of the government.

SECTION 100. Submission of a Post Budget Report. — The DBM shall submit to Congress a post FY 2015 budget report within the succeeding year. The post budget report shall indicate a summary of the performance of the government.

The Secretary of DBM and the Agency's web administrator or his/her equivalent shall be responsible for ensuring that said report is likewise posted on the Agency's website.

SECTION 101. Joint Congressional Oversight Committee on Public Expenditures. — The Senate and the House of Representatives shall constitute a Joint Congressional Oversight Committee on Public Expenditures which shall primarily monitor compliance by agencies with the requirements and/or conditions in the utilization of public funds under this Act and pertinent laws.

The Joint Congressional Oversight Committee shall be co-chaired by the Chairperson of the Committee on Finance of the Senate and the Chairperson of the Committee on Appropriations of the House of Representatives. The President of the Senate and the Speaker of the House of Representatives shall each designate seven (7) Senators and seven (7) members of the House of Representatives, respectively, as members of the Joint Congressional Oversight Committee. The minority group in the Senate and the House of Representatives shall each have at least one (1) seat in the Joint Congressional Oversight Committee.

The Joint Congressional Oversight Committee on Public Expenditures shall not intervene, participate, or undertake any role or function in any of the various post-enactment stages of the budget execution, such as, but not limited to, project identification and/or modification, fund releases, and other activities beyond its congressional oversight functions as defined under applicable laws and/or jurisprudence.

SECTION 102. Exemption from Garnishment. — All amounts appropriated and released under this Act shall be exempt from garnishment.

SECTION 103. Scope of Application. — The provisions in this Act on savings, augmentation, related concepts, and the unprogrammed Appropriations hitherto applies mutatis mutandis to appropriation laws.

SECTION 104. Separability Clause. — If for any reason, any section or provision of this Act is declared unconstitutional or invalid, other sections or provisions which are not affected thereby shall continue to be in full force and effect.

SECTION 105. Effectivity. — The provisions of this Act, detailed in Volume Nos. I, II-A and II-B shall take effect January one, two thousand and sixteen, unless otherwise provided herein.

 

Approved: December 22, 2015.

ATTACHMENT

President's Budget Action Message

Malacañang Palace
Manila

The Honorable Speaker
Ladies and Gentlemen of
the House of Representatives

By the mandate vested upon me by the sovereign will of the Filipino people, I sign into law Republic Act (R.A.) No. 10717, the General Appropriations Act (GAA) for fiscal year (FY) 2016, entitled "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY ONE, TWO THOUSAND AND SIXTEEN, AND FOR OTHER PURPOSES."

Sa pagsasabatas natin sa Pambansang Gugulin para sa taong 2016, patuloy nating pinaninindigan ang ating panata sa bayang nagluklok sa atin sa poder: mamahala nang matuwid at mahusay upang masiguro ang tuloy-tuloy na pag-unlad ng ating bansa.

I. General Comments

As I enact the final GAA of our administration, allow me to recall the actions we have taken together in the past 66 months that dramatically reshaped the way public funds are allocated, spent, and accounted for.

We started our reform journey with the difficult process of eliminating wasteful spending and restoring our credibility in the financial market. Since then, we have installed fundamental budgeting reforms that kept our fiscal house in order. We have aligned spending with desired results. We have streamlined budget release procedures and enhanced agencies' capacity to deliver services. Most of all, we have given our citizens a greater voice in budget policymaking. Driven by our people's clamor for change, we have accomplished what we thought was impossible: the installation of new policies and systems to strengthen budget integrity and accountability.

All of these have transformed our country's public financial management system to ensure that the government spends within its means, invests in the right priorities, delivers measurable results, and empowers citizens in the process of allocating their taxes.

Throughout this journey, we have been conscious of the fact that the power we wield over the Budget is not ours; rather, it is merely entrusted to us by the people. It is for this reason that I express my deep gratitude to the men and women of the 16th Congress for demonstrating their resolve to reflect their constituents' urgent needs and their demand for reform in this Budget that I enact today. I thank you for supporting the public financial management (PFM) reforms that we have introduced since 2010, which have now been consolidated through this GAA. Most importantly, I thank you for ratifying a Budget that supports our agenda for inclusive development: our vision of a country that provides everyone, especially the poor, ample opportunities to become self-sufficient and achieve lasting prosperity.

I must laud you for once again fulfilling your duty to pass the General Appropriations Bill on time — the 6th year in a row. By doing so, you have made your mark on history by ending the previous regime of frequent budget re-enactments, which resulted in unbridled Presidential discretion and convoluted budget execution. The timely passage of the GAA is in profound support of our pursuit to establish a new tradition of transparent, accountable, and efficient PFM. We in the Executive are compelled to reciprocate this historic act by urgently and faithfully implementing this Budget for 2016.

Before the annual Budget is implemented, the Presidency traditionally exercises his or her authority granted by Section 27 (2), Article VI of the 1987 Constitution in order to ensure that the GAA is consistent with the Constitution, existing laws, and responsible fiscal policy. I am pleased to report that of the 145 revisions and new provisions introduced in the Proposed Budget, I vetoed 3 and registered special conditions and observations on another 37. This is a welcome sign that, indeed, Congress has increasingly exercised its power of the purse with greater accountability and fiscal responsibility.

In the succeeding sections of this Message, I discuss the actions I have taken, as well as other observations, on the General Appropriations Bill that I hereby sign into law.

II. Direct Veto

Pursuant to the power vested in me by the Constitution, I hereby directly veto the following use of income provisions in this Act which contravene Section 44, Chapter 5, Book VI of Executive Order (E.O.) No. 292, s. 1987 (Administrative Code of 1987) requiring a separate substantive law to authorize the use of income by agencies:

A. Department of Justice (DOJ)-National Bureau of Investigation, Special Provision No. 1, "Use of Income",Volume II-A, page 1270;

B. Other Executive Offices (OEO)-Energy Regulatory Commission, Special Provision No. 1, "Use of Income",Volume II-B, page 435; and

C. Department of Transportation and Communication (DOTC)-Office of the Secretary (OSEC),Special Provision No. 2, "Use of Income",Volume II-B, page 309.

In the absence of a separate law allowing agencies to use their income, said provisions are considered 'riders' in this Act and must not be countenanced. In the case of Philippine Constitution Association, et al. vs. Hon. Salvador Enriquez, et al., (235 SCRA 534, 1994), citing Henry vs. Edwards, La., 346 So. 2d 153 [1977]),the Supreme Court has ruled that the budget law cannot include matters that should properly be enacted in a separate legislation as the same is considered as an inappropriate provision which may be subject of a line item veto.

Following Section 44 above, all income of agencies shall be deposited in the National Treasury as income of the general fund to be used for the operations of the government. Accordingly, the income sources identified in the vetoed special provisions legally form part of this year's revenue program, upon which the annual budget will be funded. Apart from violating the constitutional proscription on 'riders,' allowing the use of income by said agencies will likewise result in double programming of the same income, as well as increase our expenditure program without the corresponding revenue sources.

III. Conditional Implementation

As head of the Executive, I am duty-bound to ensure the faithful execution of the provisions of this GAA in a manner that is consistent with existing substantive laws, as well as fundamental fiscal and budget management policies. Under the principles of equity and fiscal accountability, these laws and policies — and the rules that were crafted to guide their implementation — must be enforced and adhered to by all agencies. Therefore, I subject the implementation of the following provisions to certain conditions in order to ensure consistency with existing laws, policies, and rules and regulations.

A. Fiscal Accountability and Transparency

 With our Constitution as guide, I call upon all agencies of the government to sustain our efforts towards fiscal accountability and transparency in all public expenditures. It is ingrained in our Constitution that Public Office is a public trust; thereby exacting not only the highest standards of public accountability, but also their equal enforcement across all entities of the government.

 This principle of equal application of policies and standards applies in particular to the expenditure of public funds. These resources are meant to be disbursed for their purposes as authorized in the annual budget law, and during the validity of such appropriations. Unexpended balances of appropriations must revert back to the Treasury in order that they be authorized anew by a subsequent appropriations law. The reversion of funds likewise complements our drive for an open and transparent government: one which allows greater public scrutiny of government transactions, especially in the use of public funds. This policy of fund reversion is not only based upon sound, prudent, and transparent fiscal management, but also rooted in the constitutional provision that "no money shall paid out of the Treasury except in pursuance of an appropriations made by law."

 Therefore, the retention of public funds for some future use not only distorts the equal application of fiscal accountability standards but also runs counter to the legal mandate to revert all unexpended balances of appropriations to the Treasury. Thus, in order to sustain our common ideals of fiscal autonomy with accountability towards good governance and greater transparency, founded upon the above constitutional and legal precepts, I hereby subject these provisions to conditional implementation:

1. Judiciary-Supreme Court of the Philippines and the Lower Courts, Special Provision No. 10, "Availability of Appropriations and Cash Allocations",Volume II-B, page 605;

2. Judiciary-Presidential Electoral Tribunal, Special Provision No. 1, "Availability of Appropriations and Cash Allocations",Volume II-B, page 609;

3. Judiciary-Sandiganbayan, Special Provision No. 4, "Availability of Appropriations and Cash Allocations",Volume II-B, page 612;

4. Judiciary-Court of Appeals, Special Provision No. 4, "Availability of Appropriations and Cash Allocations",Volume II-B, page 615;

5. Judiciary-Court of Tax Appeals, Special Provision No. 4, "Availability of Appropriations and Cash Allocations",Volume II-B, page 618; aScITE

6. Civil Service Commission, Special Provision No. 3, "Availability of Appropriations and Cash Allocations",Volume II-B, page 623;

7. Commission on Audit (COA),Special Provision No. 3, "Availability of Appropriations and Cash Allocations",Volume II-B, page 639;

8. Commission on Elections, Special Provision No. 3, "Availability of Appropriations and Cash Allocations",Volume II-B, page 654;

9. Office of the Ombudsman, Special Provision No. 4, "Availability of Appropriations and Cash Allocations",Volume II-B, page 662; and

10. Congress of the Philippines, Special Provision No. 6, "Availability of Appropriations and Cash Allocations",Volume II-A, page 14.

B. Direct Release of MOOE Requirements to Lower Courts

 Indeed, collaborative consultations with the co-equal branches of government have yielded positive results for our country. No less than the Chief Magistrate has advanced the need to fortify Judicial independence by allocating sufficient amounts for the operating requirements of all lower courts, thereby discounting the need for any kind of assistance from local government units. This policy, coupled with a decentralized financial system, would enable the fair and efficient administration of justice in our country. In support of this policy, I have thus proposed an item in the budget of the Judiciary exclusively for the Maintenance and Other Operating Expenses (MOOE) of, and to be directly released to, all lower courts in the country.

 

 In faithful support of our shared objectives, I reaffirm my commitment towards Judicial independence and efficient administration of justice, and place Judiciary-Supreme Court of the Philippines and the Lower Courts, Special Provision No. 7, "Maintenance and Other Operating Expenses of Lower Courts",Volume II-B, page 605 under conditional implementation. Accordingly, I direct the Department of Budget and Management (DBM) to release said MOOE directly to the lower courts upon coordination with the Supreme Court.

 Finally, consistent with fiscal independence and transparency, we urge the Judiciary to post the equitable allocation it has provided all lower courts on its website.

C. Network Plan for Farm-to-Market Road Projects

 Farm-to-market roads (FMRs) are vital to our farmers, as these provide crucial market access and ensure the timely mobility of their crops and byproducts. Construction of FMRs should be strategic and follow an overall design; one that would lead to arterial or secondary roads and key production areas. An FMR network plan will ensure that the appropriations for the implementation of FMRs under Department of Agriculture (DA)-OSEC, Special Provision No. 8, "Farm-to-Market-Road Projects",Volume II-A, page 93, will truly benefit our farmers. I hereby mandate the DA to put in place a network plan to guide the implementation of FMR projects all over the country. Moreover, I task the same agency to prioritize the following in the implementation of FMRs: (i) major rice, corn and high value commercial crops producing provinces; (ii) areas where the majority of small farmers and agrarian reform beneficiaries registered under the Registry System on Basic Sectors in Agriculture are located; and (iii) provinces or regions where the absolute number of poor farmers and the incidence of poverty are high as identified in the latest official poverty statistics of the Philippine Statistics Authority.

 The hard work and dedication of our people in the field should be showcased as an example of how spending on the right priorities effects real change on the lives of our people. Thus, I further instruct the DBM to provide an FMR portal on its website containing the FMR network plan, together with the geo-tagged photos of all FMRs, including those being implemented across the country. For this purpose, the DA shall submit to the DBM, within a reasonable time, a copy of the network plan with geo-tagged photos of all existing FMRs and, on a regular basis, the geo-tagged photos of FMRs being implemented.

D. ROW Obligations of PPP Transportation Infrastructure Projects

 Under this Administration, we have optimized government resources by bringing in private partners through the Public-Private Partnership (PPP) program. This allows us to deliver much-needed public services at a lower cost for the government, and enables us to shift the risks to private investors. To ensure the successful implementation of PPP transportation infrastructure projects, we have proposed a sufficient amount under DOTC-OSEC, Special Provision No. 5, "Public-Private Partnership Transportation Infrastructure Projects",Volume II-B, page 309, to settle all right-of-way (ROW) acquisition expenses, which is an indispensable requirement for the PPP projects to proceed. Thus, the need to prioritize ROW obligations of the government in the implementation of this provision. Moreover, to avoid duplication of funding sources, the Risk Management Program in this Act should be utilized to cover other government commitments under the PPP contracts.

E. Proper Recording of Tax Refunds

 Consistent with fiscal transparency and auditing rules, all tax refunds made during the year, which have been previously recorded as income, shall be deducted from the current year's revenue tax collections. Thus, similar with the recording of tax refunds by the Bureau of Customs, Department of Finance-Bureau of Internal Revenue (BIR),Special Provision No. 3, "Tax Refund",Volume II-A, page 1095, shall cover adjustments in the current year's revenue collections equivalent to the tax refunds made by the BIR for both current and prior years.

F. Proper Use of Income, Fees or Appropriations

1. Building Fund

 In pursuance of the State policy to protect the rights and promote the welfare and interests of Filipinos overseas under R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995), the Department of Foreign Affairs (DFA) shall prioritize the acquisition of new properties and the renovation of deteriorating government-owned consular offices, chanceries, and residences of the Philippine Foreign Service in the use of the Building Fund under DFA-OSEC, Special Provision No. 3, "Building Fund",Volume II-A, pages 1134-1135.

 The funding requirements for the acquisition or rehabilitation of other DFA offices in the Philippines shall be sourced from its regular appropriations, and not from the Building Fund. This promotes the efficient use of resources and assures adequate service and protection for the growing number of Filipinos overseas from our consular offices abroad.

2. Hospital Income

 To ensure that all income collected by hospitals, medical centers, and other facilities authorized under Department of Health (DOH)-OSEC, Special Provision No. 2, "Hospital Income",Volume II-A, page 1153, are utilized for the improvement of the hospitals' or facilities' operations, the DOH is hereby directed to set the standards and parameters for the availment of the Point of Care Program. This shall include the selection of beneficiaries, which shall prioritize indigents not covered under the National Household Targeting System. Moreover, the DOH shall ensure that the use of hospital income under this provision for the Point of Care Program shall not displace the delivery of health services or the upgrading of the hospital's or facilities' equipment.

3. Express Lane Charges

 The implementation of DOJ-Bureau of Immigration (BI),Special Provision No. 2, "Express Lane Charges",Volume II-A, page 1264, shall be subject to the following: (i) submission by the BI to DBM of the list of fees and charges covered hereunder, together with the utilization reports on past collections; (ii) compliance with the authorized rates and rules in the grant and/or payment of salaries, allowances, benefits, and incentives, including overtime pay and health premium payments to BI employees; (iii) payment within the prescribed rates for casual, contractual, and job order employees, including confidential agents; and (iv) such other rules and policies as may be issued by the DBM.

4. Pension and Gratuity Fund and Unprogrammed Appropriations

 To ensure the equitable allocation of the amounts appropriated for Total Administrative Disability pension under Pension and Gratuity Fund, Special Provision No. 1, "Pension and Gratuity Fund",Volume II-B, page 771, and Unprogrammed Fund, Special Provision No. 1, "Availment of the Unprogrammed Appropriations",Volume II-B, page 775, I hereby task the DBM and Department of National Defense (DND)-Philippine Veteran Affairs Office to issue the implementing rules and regulations with due regard for the pending measures on pension reforms in the government.

5. Income from Amusement Taxes

 In support of the government's efforts to promote the development and growth of the local film industry as a medium of aesthetics and to better understand and appreciate the Filipino Identity, the appropriations authorized under OEO-Film Development Council of the Philippines, Special Provision No. 1, "Income from Amusement Tax and Other Fees and Charges",Volume II-B, pages 440-441, shall not be used for the purchase of motor vehicles, in accordance with Section 16 (b) of R.A. No. 9167 (An Act Creating the Film Development Council of the Philippines, Defining its Powers and Functions, Appropriating Funds therefor, and for Other Purposes).

G. Compliance with the Requirements of Existing Laws

1. Cultural Preservation

 The State policy to protect, preserve, conserve, and promote the nation's cultural heritage, properties and histories, and the ethnicity of our local communities embodied under R.A. No. 10066 (The National Cultural Heritage Act of 2009) was reaffirmed in Section 43, General Provisions, "Protection of Built Heritage, Cultural Properties and Cultural Landscapes",Volume II-B, page 796 and Department of Education (DepEd)-OSEC, Special Provision No. 20, "Preservation of Gabaldon and Other Heritage School Buildings",Volume II-A, page 271, of this Act. To effectively promote the advocacy on cultural preservation, I direct the cultural agencies concerned to harmonize the provisions on both laws, particularly the prohibition on the demolition of cultural properties and sites, and the need for prior consultation with stakeholders and cultural groups on the alteration, renovation, or demolition of government buildings.

2. Construction of Evacuation Centers

 I applaud Congress for impressing upon us the need to mitigate the growing effects of climate change under Department of Public Works and Highways (DPWH)-OSEC, Special Provision No. 17, "Evacuation Centers",Volume II-B, page 4 and Department of the Interior and Local Government (DILG)-OSEC Special Provision No. 9, "Evacuation Centers",Volume II-A, page 1200. It is indeed imperative for us to revisit our laws and rules on building standards, especially in areas frequented by typhoons and other calamities. As disasters and calamities leave many people homeless, evacuation centers provide a safe refuge and lend a measure of comfort to their hapless victims. We should therefore ensure that the standards in place under the National Structural Code of the Philippines, the legal authority on the structural design of all buildings pursuant to Presidential Decree (P.D.) No. 1096 (The National Building Code of the Philippines), are responsive to these phenomena and other similar weather disturbances.

 Accordingly, I mandate the DPWH, as the infrastructure arm of the government, to study, in consultation with the Civil Engineering Board and other stakeholders, the standards set under the National Structural Code of the Philippines on the construction of buildings and other structures — including evacuation centers — and determine their continued applicability for the protection of the public.

 

 On the other hand, the DILG shall continuously remind local government units of the need to observe the standards set by the National Structural Code of the Philippines on the construction of buildings and structures, pursuant to its supervisory functions over local government units.

3. Grant of Tax Subsidies

 For the consistent application of rules on the grant of tax subsidy, implementation of Section 16 (d),General Provisions, "National Internal Revenue Taxes and Import Duties",Volume II-B, page 792, shall be subject to the prior approval of the Fiscal Incentives Review Board, created pursuant to P.D. No. 776 (Creating a Fiscal Incentives Board),as amended by E.O. No. 93, s. 1986 (Expanding the Powers of the Fiscal Incentives Review Board).

H. Efficiency in the Use of Public Funds

 The succeeding provisions are properly placed under conditional implementation to avoid the duplication of funding sources and to optimize the use of public funds:

1. DND-OSEC, Special Provision No. 1 "Quick Response Fund",Volume II-A, page 1347;

2. DILG-Bureau of Fire Protection (BFP),Special Provision No. 5 "Quick Response Fund",Volume II-A, page 1234;

3. DOTC-Philippine Coast Guard (PCG),Special Provision No. 1 "Quick Response Fund",Volume II-B, page 347; and

4. DILG-Philippine National Police (PNP),Special Provision No. 9 "Quick Response Fund",Volume II-A, page 1211.

 The Quick Response Funds under the foregoing provisions are more effective in providing relief, aid, and rehabilitation of disaster-stricken communities or areas when these are used by said agencies only for pre-positioning activities, specifically those related to their particular mandates on disaster- and calamity-response. To guarantee the immediate provision of adequate goods, supplies, and materials to victims of disasters and calamities, I hereby task the DND, PNP, PCG, and BFP to undertake swift and efficient coordination activities with the Department of Social Welfare and Development (DSWD) to prevent the overlapping of pre-positioning activities. They shall, at all times, prevent the wasteful duplication of the provision of goods, which is the primary mandate of DSWD.

5. Budgetary Support to Government Corporations-Sugar Regulatory Administration (SRA),Special Provision No. 1, "Block Farm Program",Volume II-B, page 679.

 Considering that other agencies of the government are likewise implementing their own Block Farm Programs, the SRA shall ensure that beneficiaries under its program are not recipients of similar programs under other agencies. More importantly, the SRA — in coordination with the DA and other agencies concerned — shall set up common guidelines for the implementation of the Block Farm Program across all agencies.

IV. General Observation

I place the following special provisions under general observation in order to clarify their meaning and effects.

A. Organizational Structure

 I have full trust and confidence that the leadership of Congress and COA shall implement Congress of the Philippines, Special Provision No. 2, "Organizational Structure of the Senate, the House of Representatives, the Senate and House of Representatives Electoral Tribunals and the Commission on Appointments",Volume II-A, page 14 and COA, Special Provision No. 1, "Organizational Structure",Volume II-B, page 639, in accordance with the constitutionally mandated salary standardization under R.A. No. 6758 (Compensation and Position Classification Act of 1989), as amended by Congress Joint Resolution No. 4, s. 2009 (Joint Resolution Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government),and R.A. No. 6686 (An Act Authorizing Annual Christmas Bonus), as amended by R.A. No. 8441 (An Act Increasing the Cash Gift), as well as uphold the fundamental policy set forth under Section 8, Article IX-B of the Constitution, proscribing the payment of additional compensation.

 They shall similarly abide by the rules on the creation of new positions and other adjustments in the Personnel Services itemization, as well as observe the scrap and build policy for any adjustment and modification in their Organizational and Staffing Structure.

B. Full Integration of Special Allowance

 To dispel any doubt on the intent of Judiciary-Supreme Court of the Philippines and the Lower Courts, Special Provision No. 2, "Special Allowance",Volume II-B, page 604 and DOJ-Office of the Solicitor General (OSG),Special Provision No. 1, "Income from Collections of the Office of the Solicitor General",Volume II-A, page 1276, I restate the provisions of substantive laws granting special allowance. Section 6 of R.A. No. 9227 (An Act Granting Additional Compensation in the Form of Special Allowances for Justices, Judges and all Other Positions in the Judiciary) directed that the special allowance granted unto all justices, judges, and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals or the Regional Trial Court be integrated with their salaries upon the full implementation of R.A. No. 6758, as amended by Congress Joint Resolution No. 4 s. 2009. In the same vein, Section 12 of R.A. No. 9417 (An Act to Strengthen the Office of the Solicitor General by Expanding and Streamlining Its Bureaucracy) mandated the integration of the special allowance given to the Solicitor General, Assistant Solicitor General, Senior State Solicitor, State Solicitors I and II, and Associate Solicitors I to III with their salaries, upon the full implementation of the above-mentioned compensation adjustment law.

C. Grant of Salaries and Allowances

 Consistent with P.D. No. 1597 (Further Rationalizing the System of Compensation and Position Classification in the National Government) and Congress Joint Resolution 4, s. 2009, the use of income under DOF-Securities and Exchange Commission (SEC),Special Provision No. 1, "Registration and Filing Fees",Volume II-A, page 1129 for salary adjustments and the grant of allowance and other benefits of SEC officials and employees shall be made only upon the recommendation of the DBM and my final approval.

D. Submission of Reports

 The DOJ-OSG, in implementing DOJ-OSG, Special Provision No. 1, "Income from Collections of the Office of the Solicitor General",Volume II-A, page 1276 and DOJ-OSG, Special Provision No. 2, "Operational Requirements of the Special Committee on Naturalization",Volume II-A, page 1276, is expected to comply with the submission of quarterly reports on financial and physical accomplishments under Section 89, General Provisions of this Act.

E. Prosecution of Illegal Occupants

 It is understood that the prosecution of professional squatters, members of a squatting syndicate, or any individual or group who will occupy or cause other persons to occupy cleared areas under DILG-OSEC, Special Provision No. 11, "Containment of the Cleared Areas",Volume II-A, page 1200 shall be made through the National Prosecution Service of the DOJ, as it is the entity responsible for the investigation of the commission of crimes, the prosecution of offenders, and the administration of the probation and correction system.

F. National Government Equity

 By its very nature, the Unprogrammed Fund provides standby authority in case of excess collections by the government. In the case of Unprogrammed Fund, Special Provision No. 1, "Availment of the Unprogrammed Appropriations",Volume II-B, page 775, the release of the National Government equity for the Land Bank of the Philippines shall be chargeable against the dividend collections remitted by government-owned or -controlled corporations in excess of the dividend targets under the FY 2016 Budget of Expenditures and Sources of Financing.

V. Shared Fiscal Accountability

Consistent with the ideals of shared fiscal accountability in government, I wish to reiterate the faithful observance by all agencies of fiscal and budgeting laws and policies to ensure the sound management of our financial affairs. I uphold the constitutional grant of fiscal autonomy to the co-equal branches of government and the Constitutional Commissions. To an equal degree, I espouse fiscal responsibility, accountability, and transparency as principles that are consistent with fiscal autonomy. In the spirit of shared fiscal responsibility, I thus call upon all agencies of the government to sustain PFM reforms and uphold fiscal openness and accountability. By enforcing these principles and reforms equally throughout the government, we ensure that public funds are indeed spent for the people's benefit, and that citizens are empowered to hold public institutions and officials accountable for their actions. In doing so, we uphold the principle of checks-and-balances in our democratic society. Thus, all agencies — whether fiscally autonomous or not — should stand equally behind these policies, with no preference or exemption.

Let me therefore reiterate that pursuant to the legal mandate and policies under the General Provisions of this Act and Chapter 4, Book VI of E.O. No. 292, all appropriations for Personnel Services, as these cover the current year's requirement, shall be valid for release and obligation until December 31, 2016. All unreleased appropriations and unobligated allotments authorized in this Act shall revert to the General Fund at the end of the validity of appropriations, and shall be available for expenditure only upon subsequent legislative enactment.

VI. Performance Targets of Agencies

I finally note that there are changes, increases, reductions, and new budgetary items in this Act that may not have been considered in the formulation of the performance targets of agencies. These changes, increases, reductions, and new budgetary items should carry with them the corresponding adjustments in the committed performance targets of the agencies concerned. To achieve this, the DBM shall inform the agencies of the changes in their respective appropriations and require the submission of their revised performance targets.

 

VII. Closing Statement

Sa pamamagitan ng Budget na ito, ipinamamana natin sa kasalukuyan at sa susunod pang mga henerasyon ang isang bansang patuloy na umuunlad at isang gobyernong nakasandig sa matibay na pundasyon ng tuwid na pamamahala. Inilalatag din natin sa mga lider na hahalili sa atin pagsapit ng Hunyo 2016 ang mga repormang kailangang ipagpatuloy at paigtingin para higit na palalimin ang Paggugol na Matuwid.

Ladies and gentlemen of the 16th Congress: through our collective commitment to good governance, we have built a budget system that enables the government to spend within its means, invest in the right priorities, deliver measurable results, and empower the citizenry through greater transparency, accountability, and people's participation.

Our PFM reforms have been lauded worldwide for the breadth of their ambitiousness and the extent of their impact. For one, the Bottom-Up Budgeting program has garnered at least three global awards for its groundbreaking approach to participatory budgeting in the country, so that grassroots communities and local civil society now have a greater voice and stake in the budget process. Besides that, our efforts to expand citizen access to budget information has earned us high marks in the 2015 Open Budget Index, effectively placing the Philippines among the top 24 countries with adequate fiscal transparency.

Beyond earning global recognition for our country, our PFM reforms — and our governance reforms in general — were central in leading our country to the path of sustained growth and poverty reduction. By making huge investments in infrastructure and improving ease of doing business in the country, we have distinguished ourselves as one of the fastest-growing and most investment-worthy economies in the world. At the same time, the implementation of effective social protection and social service programs has allowed us to strike at the heart of poverty and effect genuine change in the lives of ordinary Filipinos.

However, I will be the first to acknowledge that much remains to be done. While our administration has laid the foundations for inclusive development, our successor must continue and — more ideally — surpass what we have accomplished, to ensure that no one is left behind in our country's progress.

I must emphasize that this Budget for 2016 will be implemented in my remaining six months in office and thereafter by my duly elected successor. As I commit to turn over a sound fiscal environment and a reinforced bureaucracy, I urge my successor to build upon the reforms that our administration has established. Of particular urgency is the modernization of our country's PFM system to one that is comparable to advanced budgeting systems in the world, one that fully enables the government to wield the Budget as a tool for socio-economic development, and most of all, one that empowers citizens in the process of allocating, mobilizing, and accounting for the use of their taxes.

As a servant of the Filipino people, I shall ensure that this GAA is implemented in a transparent, accountable, and responsive manner beginning the 1st of January 2016.

December 21, 2015

Published in the Official Gazette, Vol. 111, No. 1 page 787-A on December 29, 2015. 

Source: CD Asia Online