2.3. Budget Cycle - Budget Legislation

Republic of the Philippines
Tarlac State University
College of Business and Accountancy
Romulo Blvd. San Vicente, Tarlac City
S.Y. 2021- 2022
BUDGET CYCLE: BUDGET LEGISLATION
Armintia, Aileene S.
Carasco, Aira Danica S.
De Guzman, Arianne Y.
Fernandez, Mary Lei M.
Jose, Alyssa Ashley DC.
Mendoza, Francesca Mikaela T.
Reginalde, Ray Russel L.
Torres, Rydan P.
Yabut, Joana Joy C.
BSA 3C
BUDGET LEGISLATION
 The second phase is the Budget Legislation/Authorization.
 This pertains to the whole range of legislative action on the budget, leading to
the enactment of a General Appropriations Law for the year.
 The Philippine House of Representatives first conducts hearings/debates on the

budget.
4. HOUSE DELIBERATIONS
Upon receipt of the President’s Budget, the House of Representatives conducts

hearings to scrutinize the various agencies’ respective proposed programs and
expenditures. Thereafter, the House of Representatives prepares the General
Appropriation Bull (GAB).
Initially, the President’s Budget is assigned to the House of Representatives’
Appropriations Committee on First Reading. The Appropriations Committee and its
various Sub-Committees schedule and conduct budget hearings to examine the PAPs of
the departments and agencies. Thereafter, the House of Representatives drafts the
General Appropriations Bill (GAB).
The GAB is sponsored, presented and defended by the House of Representatives’
Appropriations Committee and Sub-Committees in plenary session. As with other laws,
the GAB is approved on Third Reading before the House of Representatives’ version is
transmitted to the Senate.
This happens August to October of Prior Fiscal Year.
5. SENATE DELIBERATIONS
The Senate conducts its own deliberations on the GAB. These normally start after
the Senate receives the GAB from the House of Representatives. However, for
expediency, hearings in the Senate start even as Representative’s deliberations are
ongoing.
After transmission, the Senate conducts its own committee hearings on the GAB. To
expedite proceedings, the Senate may conduct its committee hearings simultaneously
with the House of Representatives’ deliberations. The Senate’s Finance Committee and
its Sub-Committees may submit the proposed amendments to the GAB to the plenary
of the Senate only after the House of Representatives has formally transmitted its
version to the Senate. The Senate version of the GAB is likewise approved on Third
Reading.
This happens September to November of Prior Fiscal Year
6. BICAMERAL DELIBERATIONS
After deliberations in both houses are finished, a committee called the Bicameral
Conference Committee is formed to harmonize any conflicts between the
Representatives and Senate versions of the GAB. The Conferees or representatives from
both the Philippine House and Senate convene as the Conference Committee in order to
settle and reconcile differing provision of each Chamber’s version of the bill. The
harmonized GAB (‘Bicam’ Version) or the Conference Committee Report is submitted
back to both Houses for ratification. After ratification, all amendments approved in the
Committee Report are incorporated into the enrolled copy of the GAB. The final GAB is
then printed and is submitted to the President for enactment.
7. PRESIDENT’S ENACTMENT
The enrolled copy of the GAB is forwarded to the President for signing. The signed
appropriations bill is finally enacted into a law which is termed as the General
Appropriations Act (GAA). Before enactment though, the President may exercise his
veto power as conferred to him under the Philippine Constitution. If the GAA isn’t
signed by the President or no vetoes were done, the president is given 30 days upon
receipt of the GAA and shall be considered to be implemented after the 30 days is
consummated.
 When the proposed budget is not enacted before the fiscal year starts, the last
year’s GAA is automatically reenacted. The last year’s GAA shall be used in
the current year until a new general appropriations bill is passed by the
Congress. (Art. VI, Sec. 25(7). Philippine Constitution)
RELEVANT PROVISION
The Relevant Provision in our Constitution that are Related to Budget Legislation can be
seen in our 1987 Philippine Constitution the following are as follows:
Art. VI, Sec. 25(4)
A special appropriations bill shall specify the purpose for which it is intended, and shall
be supported by funds actually available as certified by the National Treasurer, or to be
raised by a corresponding revenue proposed therein.
Art. VI, Sec. 25(5)
No law shall be passed authorizing any transfer of appropriations; however, the

President, the President of the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions
may, by law, be authorized to augment any item in the general appropriations law for
their respective offices from savings in other items of their respective appropriations.
Art. VI, Sec. 25(7)
If, by the end of any fiscal year, the Congress shall have failed to pass the general
appropriations bill for the ensuing fiscal year, the general appropriations law for the
preceding fiscal year shall be deemed reenacted and shall remain in force and effect
until the general appropriations bill is passed by the Congress.
APPROVED BUDGET
Approved Budget – is the expenditure authority derived from appropriation laws,

government ordinances, and other decisions related to the anticipated revenue or
receipts for the budgetary period. The approved budget consists of the following:
Unified Accounts Code
Structure (UACS) Code
New General Appropriations 01
Continuing Appropriations 02
Supplement Appropriation 03
Automatic Appropriation 04
Unprogrammed Funds 05
Retained Income/Funds 06
Revolving Funds 07
Trust Receipt 08
*The Unified Accounts Code Structure (UACS) refers to the standard coding
system used in financial reporting of the National Government
APPROPRIATION
Appropriation
- the authorization made by a legislative body to allocate funds for purposes
specified by the legislative or similar authority
- an authorization made by law, directing payment out of government funds,
under specified conditions or for specified purposes.
- when money is set aside money for a specific and particular purpose or purposes
- tell us how money or capital is being allocated whether it's through the federal
government's budget or a company's use of cash and capital.
1. NEW GENERAL APPROPRIATIONS
These are annual authorizations for incurring obligations during a specified

budget year, as listed in the GAA
2. CONTINUING APPROPRIATIONS
These are the authorizations to support obligations for a specific purpose or

project, such as multi-year construction projects which require the incurrence of
obligations even beyond the budget year.
3. SUPPLEMENTAL APPROPRIATIONS
Supplemental appropriations (as its name suggests) are the additional

appropriations authorized by law to add on or rather augment the existing original
appropriations. It is enacted subsequent to a regular annual appropriations act. These
original appropriations may have proved to be insufficient for their intended purposes
possibly due to economic, political, or social conditions that are supported by a
Certification of Availability if Funds from the BTr (Bureau of the Treasury).
4. AUTOMATIC APPROPRIATIONS
Automatic appropriations are the authorizations programmed annually or for

some other period prescribed by law which do not require periodic action by Congress.
They are one-time legislative authorization to provide funds for a specified purpose, for
which the amount may or may not be fixed by law, and is made automatically available
and set aside as needed.
5. UNPROGRAMMED FUNDS
Unprogrammed Funds are standby appropriations for priority programs or

projects of the government. The utilization of Unprogrammed Funds may be approved if
any of the following conditions are met:
 Revenue collections for the year exceed targets

 New revenues not included in the original revenue targets are successfully
generated, or
 Foreign loan proceeds are generated for newly approved projects covered by
perfected loan agreements.
6. RETAINED INCOME/FUNDS
Retained Income/Funds are collections that are authorized by law to be used

directly by agencies for their operation or specific purposes. These include but are not
limited to receipts from:
 State Universities and Colleges (SUCS) - tuition and matriculation fees and other
internally generated receipts
 Department of Health (DOH) - hospital income such as hospital fees; medical,
dental and laboratory fees; rent income derived from the use of hospital
equipment and facilities; proceeds from sale of hospital therapeutic products,
prosthetic appliances, and other medical devices; diagnostic examination fees;
donations in cash from individuals or nongovernment organizations satisfied with
hospital services.
7. REVOLVING FUNDS
Revolving funds are receipts deriving from legally authorized business-type

activities done by departments or agencies. An example of a business-type activity is
making loans for building renovations, the revolving funds will then be replenished as
those loans are repaid. Because a revolving fund is a self-liquidating fund which means
it remains available to finance an organization’s operation. All obligations and
expenditures incurred during the business-type activity shall be charged against the
said fund.
8. TRUST RECEIPTS
Trust Receipts are simply trust funds on which a government agency is acting as
the trustee, tasked with managing the assets in the trust. Trust funds, by which the
trustor gives the trustee the right to hold title to property or assets for the beneficiary.
Trustees get paid through labor or by taking care of the trust and these payments are
then what is used as anticipated revenue or receipts for an approved budget.

2.3. Budget Cycle - Budget Legislation

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Republic of the Philippines

Tarlac State University

College of Business and Accountancy

Romulo Blvd. San Vicente, Tarlac City

S.Y. 2021- 2022

BUDGET CYCLE: BUDGET LEGISLATION

 The second phase is the Budget Legislation/Authorization.

 The Philippine House of Representatives first conducts hearings/debates on the

Upon receipt of the President’s Budget, the House of Representatives conducts

Art. VI, Sec. 25(5)

No law shall be passed authorizing any transfer of appropriations; however, the

Art. VI, Sec. 25(7)

Approved Budget – is the expenditure authority derived from appropriation laws,

1. NEW GENERAL APPROPRIATIONS

These are annual authorizations for incurring obligations during a specified

These are the authorizations to support obligations for a specific purpose or

Supplemental appropriations (as its name suggests) are the additional

Automatic appropriations are the authorizations programmed annually or for

Unprogrammed Funds are standby appropriations for priority programs or

 Revenue collections for the year exceed targets

Retained Income/Funds are collections that are authorized by law to be used

Revolving funds are receipts deriving from legally authorized business-type

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