Republic Act No. 992 | Senate of the Philippines Legislative Reference Bureau

WHEREAS, the National Budget should Reflect the total
national fiscal position, provide.for the regionalization of expenditures, and
in other respects be more, supportive of agency organization and activities; and

WHEREAS, there is a need to update budgetary law and
procedure to enable the budget to more fully support governmental programs for
economic and social advancement; and

WHEREAS, the budget reporting and monitoring process can be
improved through the adoption and consistent application of a management
information system;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree:

SECTION 1. Section 2 of Republic Act No. 992 is hereby
amended to read as follows:

Sec. 2. Declaration of Policy. —It is hereby
declared policy that the National Budget shall be formulated as an instrument of
national development and that government budgeting shall be oriented towards the
achievement of explicit objectives and expected results to ensure that funds are
utilized and operations are conducted effectively, economically and efficiently.
The budget shall reflect all revenues, expenditures, domestic or foreign
borrowings and donations, of all levels of government, including those of
government-owned or controlled corporations and local governments. The budget
shall likewise provide for the regionalization of government
operations."

SEC. 2. Section 3 of Republic Act No. 992
is hereby amended to read as follows:

Sec. 3. Definition of Terms. —When used in this Act:

a. The term "Budget" means the budget required by Section Sixteen (16),
Article VIII of the Constitution, and which is referred to in Section Seven of
this Act.

b. The term "Government" means the National Government, including
government-owned or controlled corporations and their subsidiaries, and local
governments.

c. The terms "department and agency" and "department or agency" mean any
department, bureau, office, board, commission, court, tribunal, council,
authority, administration, center, institution, state college or university, or
any establishment and instrumentality of the National Government as defined in
the preceding paragraph.

d. The term "current operating expenditures" refers to appropriations spent
for the purchase of goods and services for current consumption or within the
fiscal year, including the acquisition of furniture and equipment usually used
in the conduct of normal government operations, and temporary construction used
for promotional and research purposes.

c. The term "capital outlays" or "capital expenditures" refers to the
purchase of goods and services of longer life-expectancy extending beyond the
fiscal year and which add to the assets of the Government, including investments
and the capital of government-owned or controlled corporations and their
subsidiaries.

f. The term "expected results" means services, products or benefits that will
accrue to the public, together with the estimated unit cost of each type of
service, product or benefit.

g. Government-owned or controlled corporations are corporations created by
law as agencies of the State for narrow and limited purposes, either owned
wholly by the State or wherein the government is a majority
stockholder."

SEC. 3. Section 6 of Republic Act No. 992 is hereby a-
mended to read as follows:

Sec. 6. Functions and Powers of the Commission. — The functions and
powers of the Commission shall be as follows:

a. To prepare the Budget and other appropriation proposals under such
policies as the President may adopt. To this end, the Commission shall have
authority to assemble, correlate, revise, reduce or increase the requests for
appropriations of the National Government and to see how their respective
programs are related to each other and how they may be shaped into a harmonious
program and fiscal policy for the National Government.

b. To exercise functional supervision over financial and management staffs of
agencies particularly budget officers and management analysts, and provide
technical assistance and consultative services, in the fields of budgeting,
organization design, management reporting and control, compensation and position
classification, management evaluation and other related areas.

c. To study departments and agencies, including government-owned or
controlled corporations and their subsidiaries, for the purpose of enabling the
President to determine what changes, with a view to securing greater economy and
efficiency in the conduct of the public service, should be made in (1) the
existing organization, activities and methods of business of such departments or
agencies, (2) the appropriation therefor, (3) the assignment of particular
activities to particular services, (4) the re-grouping of services, and (5) the
evaluation of cost-benefit effectiveness of government agencies.

d. To develop a reporting system which will allow the monitoring of fund
releases, including the design of report forms to be accomplished by agencies
through their accounting, budgeting and other units, and to issue rules and
regulations applicable to the accomplishment and submission of such forms.

e. To conduct training programs to be attended by personnel of national and
local governments and the private sector, particularly for financial and
management staffs of government agencies, in budgeting, organization design,
management reporting and control, compensation and position classification,
management evaluation and other topics related to the agencies' work, acting
under guidelines as may be formulated by the Civil Service
Commission."

SEC. 4. Section 8 of Republic Act No. 992 is hereby amended
to read as follows:

Sec. 8. Form and Content —The Budget shall consist of two
parts (1) current operating expenditures, and (2) capital outlays. Each part of
the Budget shall comprise such Funds as may be necessary for the operation of
the programs, projects and/or activities of the different departments and
agencies.

The Budget shall embody as appendices the proposed General Appropriations
Act, the Public Works Act, and other Appropriations Acts to cover the budget
proposals. The Budget shall be presented in such form and content as may be
approved by the President and may include the following: a. a budget message
setting forth in brief the significance of the appropriations proposed; b. a
brief summary of the functions and activities of the Government; and c. summary
financial statements setting forth:

(1) estimated expenditures and proposed appropriations necessary for the
support of the Government for the ensuing fiscal year including those financed
from revenues, domestic or foreign borrowings, and donations;

(2) estimated receipts during the ensuing fiscal year under laws existing at
the time the Budget is transmitted, and under the revenue proposals, if any,
contained in the Budget;

(3) actual appropriations, expenditures, and receipts during the last
completed fiscal year;

(4) estimated expenditures and receipts and actual or proposed appropriations
riming- the fiscal year in progress;

(5) balanced statements of the condition of the National Treasury at the end
of the last completed fiscal year, the estimated condition of the Treasury at
the end of the fiscal year in progress and the estimated condition of the
treasury in the end of the ensuing fiscal year, if the financial proposals
contained in the Budget are adopted, showing, at the same time, the unencumbered
and unobligated cash resources:

(6) all essential fads regarding the bonded and other long-term obligations
and indebtedness of the Government, both domestic and foreign; and

(7) such other financial statements and data as are deemed
necessary or desireable in order to make known in all practicable detail the
financial condition of the government, including; (a) regional breakdowns of the
government budget. (b) sectoral allocation of the same, (c) local government
share of the total resources and (d) government corporations allocations."

SEC. 5. Section 10 of Republic Act No. 992 is hereby amended
to read as follows:

Sec. 10. Budget Estimates. —Each head of department or
agency of the National Government shall submit his request for appropriations to
the Budget Commission in accordance with budget calendar and such rules and
regulations as may be issued in accordance with this Act.

The budget estimates shall include the following:

a. Major functions, activities, programs and projects showing the general
character and relative importance of the work to be accomplished or the services
to be rendered and the principal elements of costs involved.

b. Current operating expenditures and capital outlays.

c. Identification by region, pursuant to existing policies on regionalization
of government operations.

d. Financing sources reflecting all revenues, foreign and

domestic borrowings, and donations.

e. Contingent liabilities, including national government guarantees of
obligations of government-owned or controlled corporations.

f. Brief description of the nature of work to be performed and the
significance and scope of each program by activity, service, end-product or
benefit, and major thrusts for the ensuing fiscal year."

SEC. 6. A new Section 15-A is added after Section 15 of
Republic Act No. 992 to read as follows:

"Sec. 15-A. Cash Budget System — To ensure the availability
of cash resources for priority development projects and to establish a better
rationale for recommending the level; type and timing of public borrowing, an
operational cash budget shall be followed in accordance with the procedure as
approved by the President upon recommendation of the Secretary of Finance, the
Commissioner of the Budget and Commission on Audit."

SEC. 7. Section 23 of Republic Act No. 992 is hereby-
amended to read as follows:

"Sec. 23. Reversion of Unexpended Balances of
Appropriations. —

(a) The unexpended balances of annual appropriations authorized in the
General Appropriations Act shall revert to the unappropriated general fund in
the National Treasury at the end of the fiscal year for which such
appropriations are authorized, and shall not there after be available for
expenditure except by subsequent legislative enactment.

(b) The balances of continuing appropriations shall be reviewed as part of
the annual budget preparation process, and the Commissioner of the Budget may
recommend for the President's approval the reversion of funds no longer
necessary to complete the activities funded by said appropriations."

SEC. 8. Sections 24 and 25 of Republic Act No. 992 are
hereby renumbered Section 26 and 27, respectively, and new Sections 24 and 25
are hereby added to read as fol lows:

"Sec. 24. Budget Monitoring and Information System. — The Commission
shall identify accounting and other items of information, financial or
otherwise, needed to monitor budget performance and to assess effectiveness of
agencies' operations and .shall prescribe the forms, timing of submission, and
other components of the reporting system, including the maintenance of
subsidiary and other records which will enable agencies to accomplish and submit
said information requirements; provided that the Commission on Audit shall, in
coordination with the Budget Commission, issue rules and regulations that, may
be applicable when the reporting requirements affect accounting functions of
agencies; provided further that the applicable rules and regulations shall be
thus issued by the Commission on Audit within a period of thirty (30) days after
the Budget Commission prescribes the reporting requirements."

"Sec. 25. Miscellaneous Provisions:

"Sec. 25-A. Restrictions on Salary Increases. —No portion of the
appropriations provided in the General Appropriations Act shall be used for
payment of salary adjustment unless specifically authorized by law or
appropriate budget circular, nor shall any appropriation for salaries authorized
in the General Appropriations Act, save as otherwise provided by the
Compensation and Position Classification Plans, be paid unless the positions
have been classified by the Office of Compensation and Position
Classification.

"Sec. 25-B. Authority to Use Savings for Certain Pusposes. —
Savings in the appropriations provided in the General Appropriations Act
for the Executive Department may be used for the settlement of the following
obligations incurred during a current fiscal year or previous fiscal years as
approved by the Commissioner of the Budget in accordance with rules and pro
cedures as may be issued by the President:

a. Personal Service—

(1) Claims of officers, employees and laborers who died or were injured in
line of duty, including burial benefits provided under existing law;

(2) Commutation of terminal leaves of employees due to retirement,
resignation or separation from the service through no fault of their own in
accordance with the provisions of existing law including unpaid claims for
commutation of maternity leave of absence;

(3) Payment of retirement gratuities or separation pay of employees separated
from the service due to government reorganization;

(4) Payment of salaries of employees who have been suspended or dismissed as
a result of an administrative case or disciplinary action, or separated from the
service through no fault of their own and who have been subsequently exonerated
and/or reinstated by virtue of decisions of competent authorities;

(5) Cash awards to deserving officers and employees in accordance with Civil
Service Law; and

(6) Salary adjustment of officers and employees as a result of classification
action under the Compensation and Position Classification Plans.

b. Authorized Projects and Activities.—

(1) Peso support to any undertaking that may be received by the government
from foreign entities and organizations, including administrative and other
incidental expenses;

(2) Covering any deficiency in counterpart fund commitments for
foreign-assisted projects as may be approved by the President;

(3) Priority activities that will promote the economic well-being of the
people such as food production, energy development, and disaster relief and
rehabilitations;

(4) Repair, improvement and renovation of government buildings and
infrastructures and other capital assets that have been damaged by natural
calamities; and

(5) Expenses in connection with official trade fairs, civic parades,
celebrations, and cultural activities, and payment of expenses for the
celebration of official or special holidays which may be
declared.

c. Legal Obligations—

(1) Payment of obligations of the Government or any of its departments or
agencies as a result of final judgment of the Courts; and

(2) Payment of valid prior years'- obligations of government agencies with
any other government office.

"Sec. 25-C. Authority to Use Savings in Appropriations to Cover
Deficits. —Except as otherwise provided in the General Appropriations Act,
any savings in the regular appropriations authorized in the General
Appropriations Act of each approved program and project of any Department of the
Executive Branch of the Government and those of the bureaus and offices under
the same Department, may, with the approval of the President be used to cover a
deficit in any other item of the regular appropriations except for the creation
of new positions or increase of salaries under the same Department:
Provided, however, That whenever authorized positions are
transferred from one program or project to another within the same Department,
the corresponding amounts appropriated for personal services are also deemed
transferred, without increasing the total outlay for personal services of the
Department concerned.

"Sec. 25-D. Suspension of Expenditures of Appropriations and
Transfer Thereof.—Except otherwise provided in the General Appropriations
Act and whenever in his judgment the public interest so requires, the President,
upon notice to the head of office concerned, is authorized to suspend or
otherwise stop the expenditures or any other expenditures authorized in the
General Appropriations Act as the President may determine, except for personal
services: Provided, however, That whenever authorized positions are
transferred from one program to another, the corresponding amounts appropriated
for personal services are also deemed transferred, without increasing the total
outlay for personal services of the office concerned.

"Sec. 25-E. Substitutionary Service.—Any provision of la.w to the
contrary notwithstanding and subject to the approval of the Commissioner of the
Budget, savings in the appropriations of a department, bureau or office, when
authorized by the department head concerned and upon issuance of a duly approved
temporary appointment, may be used for the payment of the salary differential of
a substitute officer or employee who takes the place and performs the duties of
another who is temporarily absent from his post with pay.

"See. 25-F. Adjustment of Appropriations for Reorganized
Agencies and Salaries of Personnel Thereof. —The appropriations
provided in the General Appropriations Act for agencies to be reorganized in
accordance with the approved reorganization plans as well as those to be
reorganized pursuant to later law issued but not yet implemented are deemed
appropriated and shall be available for the agencies as reorganized and
approved by the President, The Commissioner of the Budget is hereby authorized
to make necessary adjustments in the appropriations to carry out the provisions
of this Section. Furthermore, the department head concerned, with the approval
of the Commissioner of the Budget, is hereby authorized to make necessary salary
adjustment resulting from final selection of personnel to fill the positions in
the staffing patterns of reorganized agencies, to make necessary salary
adjustments resulting from new appointments, promotions or salary increases made
in the interim and make necessary adjustments resulting from changes in the
staffing patterns authorized by the Commissioner of the Budget, to correct
mistakes, discriminations or injustices that may in his opinion, have been
committed in the preparation thereof: Provided, however, That any such
adjustments in the staffing patterns of reorganized agencies which have been or
may be authorized but not yet reflected in the General Appropriations Act shall
be given due course by adjusting the corresponding appropriations herein
authorized.

"Sec. 25-G. Cost Reduction. —Subject to the approval of the
respective department heads, every head of bureau, office or agency shall
institute a cost reduction program for his bureau, office or agency for the
purpose of reducing cost of operations and shall submit to the Commissioner of
the Budget reports on the results of the implementation thereof. An incentive
award not exceeding one month's salary may be granted to any official or
employee whose suggestion for cost reduction has been adopted and shall have
actually resulted in cost reduction, payable from the savings resulting
therefrom.

"Sec. 25-H. Failure tn Submit Reports. —Failure on the part of
agency heads, chief accountants, budget officers, cashiers, disbursing officers,
administrative and/or personnel officers, and other responsible officers of
departments, bureaus, and offices to submit trial balances, work and financial
plans, special budgets, reports of operation and income, current agency
plantilla of personnel, and such other reports as may be necessary and required
by the Commissioner of the Budget and/or the chairman, Commission on Audit shall
automatically cause the suspension of payment of the., salaries until they shall
have complied with the (requirements of the Budget Commission and the Commission
on Audit. No appropriation authorized in the General Appropriations Act shall be
available to pay the salary of any official or employee who violates the
provisions of this section, in addition to any disciplinary action that may be
instituted against such officer or employee.

"Sec. 25-I. Motor Vehicles. — Officials entitled to
government motor transportation and the purchase, use, operation and maintenance of government motor transport equipment shall be governed by such rules
and regulations as may be issued by the President.

"Sec. 25-J. Service Fees. —The Budget Commission is hereby
authorized to charge fees, including honoraria and other reasonable allowances,
against agencies requesting consultative or technical services beyond the normal
scope of such services.

SEC. 9. Repealing Clause.—All laws, rules and
regulations which are inconsistent with the provisions of this Decree are
hereby repealed.

SEC. 10. Effectivity — This Decree shall
take effect immediately.

Done in the City of Manila, this 16th day of September, in the year of Our
Lord, nineteen hundred and seventy- six.

(Sgd.) FERDINAND E. MARCOSPresident of the
Philippines

By the President:

(Sgd.) JUAN C. TUVERA Presidential
Assistant

Source: Supreme Court E-Library