Article 116p. 116

ADMINISTRATIVE CODE AND LAW OF PUBLIC OFFICERS TEXT AND RULES

approved regional distribution of expenditures, specifying

the region of destination.

Departments and agencies shall sub-allot in full and

without the imposition of reserves, the approved budget

allocation of their various regional offices, except as may

be authorized by the Secretary, in case realignment of

expenditures prove to be necessary in the course of

budget execution. The Secretary shall issue the rules and

regulations needed to implement the provisions of this

section.

SECTION 16. Budget Evaluation . — Agency proposals

shall be reviewed on the basis of their own merits and not

on the basis of a given percentage or peso increase or

decrease from a prior year's budget level, or other similar

rule of thumb that is not based on specific justification.

Proposed activities, whether new or ongoing, shall be

evaluated using a zero-base approach and on the basis of

(1) relationship with the approved development plan, (2)

agency capability as demonstrated by past performance,

(3) complemental role with related activities of other

agencies, and (4) other similar criteria. The realization of

savings in a given budget year and the consequent

non-utilization of funds appropriated or released to a

given agency shall not be a negative factor in the budget

evaluation for a subsequent year.

SECTION

17.

Foreign-Assisted

Projects .

—

The

budgetary implications of foreign-assisted projects shall

be explicitly considered at the time of project design and

financing negotiation. The project study shall specify the

cash flow requirements of the project, among others, for

(1) payment of principal and interest, (2) peso component

of capital costs and project preparation, (3) infrastructure

and support facilities needed to be directly financed by

government, (4) operating and other expenditures which

will be ultimately required for General Fund support

when

the

project

is

implemented,

and

(5)

peso

requirements needed as counterpart. The concurrence of

the Department of Budget and Management shall be

obtained

with

respect

to

peso

requirements

and

implication on expenditure ceilings.

SECTION 18. Coordinating Bodies . — The budgets of

coordinating agencies, councils, task forces, authorities,

committees, or other similar bodies shall be limited to

and used to fund only such planning, coordinating and

monitoring functions as are assigned to it. Funds for

implementation shall be budgeted and released to the

line implementing agencies concerned: provided , that

the

budgets

of

coordinating

bodies

may

include a

lump-sum

for

purposes

related

to

their

assigned

functions,

which

lump-sum

shall

be

sub-allotted

to

implementing agencies and not used by the agency for

its

own

operations:

provided,

further ,

that

funds

budgeted for a given agency falling within the jurisdiction

of a coordinating body, may be subject to release upon

approval by the coordinating agency of such release or of

the agency's work program.

SECTION

19.

Budgetary

Requirements

of

Government-Owned or Controlled Corporations . — The

internal

operating budgets of government-owned or

controlled corporations and of chartered institutions shall

be approved by their respective governing boards in

accordance with a budget calendar and format as may be

approved by the President: Provided , that such budgets

shall be subject to review and approval as part of the

budget process in cases where national government

budgetary support is needed, in terms of (a) capital or

equity inputs, (b) operating contributions to support

specific activities undertaken by the institution as part of

its regular functions, and (c) guarantee of the national

government for obligations or contracts entered into by

the corporations: provided, further , that the submission of

interim financial statements may be required by the

Secretary.

SECTION 20. Tax and Duty Exemption . — All units of

government, including government-owned or controlled

corporations, shall pay income taxes, customs duties and

other taxes and fees as are imposed under revenue law:

provided , that organizations otherwise exempted by law

for the payment of such taxes/duties may ask for a

subsidy from the General Fund in the exact amount of

taxes/duties due: Provided, further , that a procedure shall

be established by the Secretary of Finance and the

Secretary of the Budget, whereby such subsidies shall

automatically

be

considered

as

both

revenue

and

expenditure of the General Fund.

SECTION 21. Appropriation for Personal Services . —

Appropriations for personal services shall be considered

as included in the amount specified for each budgetary

program and project of each department, bureau, office

or agency, and shall not be itemized. The itemization of

personal services shall be prepared by the Secretary for

consideration and approval of the President as provided

in Section 23 hereof: Provided , That the itemization of

personal services shall be prepared for all agencies of the

Legislative, Executive and Judicial Branches and the

Constitutional

bodies,

except

as

may

be

otherwise

approved by the President for positions concerned with

national security matters.

SECTION

22.

Department

Approval

of

Proposed

Appropriations .

—

No

legislative

proposal

which,

if

enacted,

would

authorize subsequent appropriations,

shall be transmitted to the President by any bureau or

agency, without the prior approval of the Head of the

Department concerned or by the Chairman or Chief

Executive

Officer

of

a

Cabinet

level

body

which

coordinates

the

multi-sectoral

formulation

and

implementation of a particular program of expenditure

involving

one

or

more

departments.

No

legislative

proposal involving the appropriation of funds shall be

transmitted to the Congress without the approval of the

President.

CHAPTER 4 Budget Authorization

SECTION 23. Content of the General Appropriations

Act . — The General Appropriations Act shall be presented

in the form of budgetary programs and projects for each

agency

of

the

government,

with the corresponding

appropriations for each program and project, including

statutory

provisions

of

specific

agency

or

general

applicability. The General Appropriations Act shall not

contain any itemization of personal services, which shall

be prepared by the Secretary after enactment of the

General

Appropriations

Act,

for

consideration

and

approval of the President.

SECTION 24. Prohibition Against the Increase of

Appropriation . — The Congress shall in no case increase

the appropriation of any project or program of any

department, bureau, agency or office of the Government

over the amount submitted by the President in his

budget proposal. In case of any reduction in the proposed

appropriation for a project or program, a corresponding

reduction shall be made in the total appropriation of the

department, office or agency concerned and in the total

of the General Appropriations Bill.

SECTION

25.

Prohibition

Against

Enactment

of

Additional Special Provisions . — The Congress shall not

add special provisions in the budget earmarking the use

of appropriations for specific programs or activities nor

shall

it

increase

the

amounts

specified

in

special

provisions, beyond those proposed by the President.

SECTION

26.

Automatic

Appropriations .

—

All

expenditures

for

(1)

personnel

retirement premiums,

government service insurance, and other similar fixed

expenditures, (2) principal and interest on public debt, (3)

national government guarantees of obligations which are

drawn upon, are automatically appropriated: Provided ,

that no obligations shall be incurred or payments made

from funds thus automatically appropriated except as

issued in the form of regular budgetary allotments.

SECTION 27. Supplemental Appropriations . — All

appropriation proposals shall be included and considered

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