Philippine National Budgeting Process

Financial Reporting System of the National Government

• The financial reporting system submits financial reports to the Commission on Audit (COA) for consolidation.
• COA's accounting books are subject to audit by COA.
• The system consolidates financial reports, reconciles budget registries with budget records of COA and the Department of Budget and Management (DBM).
• It maintains accounting books of government agencies, DBM, and budget registries.

Budget Process

• The Office of the President and Congress reconcile accounting books with cash records of the Bureau of the Treasury (BTr).
• The budget process involves a series of steps that begins with the determination of overall economic targets, expenditure levels, revenue projection, and financing plan by the Development Budget Coordinating Committee (DBCC).
• The DBCC is an inter-agency body composed of the DBM Secretary as Chairman, the Governor of the Bangko Sentral ng Pilipinas (BSP), the Secretary of the Department of Finance, the Director General of the National Economic and Development Authority, and a representative of the Office of the President as members.

Budget Preparation

• The major activities involved in preparing the annual national budget include:
  • Determination of overall economic targets, expenditure levels, and budget framework by the DBCC.
  • Issuance of the Budget Call by the DBM, which defines the budget framework, sets economic and fiscal targets, and prescribes guidelines and procedures.
  • Preparation of detailed budget estimates by government agencies, ranking programs, projects, and activities using the capital budgeting approach, and submission to DBM.
  • Conduct of budget hearings where agencies justify their proposed budgets before DBM technical panels.
  • Submission of the proposed expenditure program of departments/agencies/special purpose funds for confirmation by department/agency heads.
  • Presentation of proposed budget levels of departments/agencies/special purpose funds to the DBCC for approval.
  • Review and approval of the proposed budget by the President and the Cabinet.
  • Submission of the proposed budget to Congress.

Importance of Government Budgeting

• Government budgeting is critical in allocating revenues and borrowed funds to attain economic and social goals.
• It enables the government to plan and manage its financial resources to support implementation of programs and projects that promote national development.
• Through the budget, the government can prioritize and implement its programs, projects, and activities within its financial capability, as dictated by economic conditions.