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THE PRESIDENT’S
BUDGETARY POWERS
Emilia T. Boncodin

Forum on the Powers of the Presidency:

Preventing Misuse and Abuse
Asian Institute of Management, 30 January 2010

© 2010 Emilia T. Boncodin

SCOPE

•! Budget Powers
–!Focus on Expenditures of Public Funds
•! National Government Budget
–!Indirectly, Goccs and LGUs

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KEY BUDGET POWERS

•! setting the budget level

•! authorizing the expenditure of
appropriate funds
•! suspension of appropriations
•! use of savings
•! approval of lump sum appropriations
•! grant of personnel benefits

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BUDGET SETTING

•! President prepares and submits budget of

expenditures as basis of general
appropriations for approval by Congress
•! Congress may not increase appropriations
recommended by the President (Sec. 25
(1), Art. VI, Constitution)
•! Power to veto any particular item or items
in an appropriation, revenue or tariff bill …
(Sec 27 (2), Art. VI, Constitution)
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IN PRACTICE:

•! an effective instrument of fiscal discipline

–!expenditures are based on identified sources
of revenues and financing
–!budget allocations specified as to purpose
and recipient

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CHALLENGED BY:
–! addition of continuing (or carry-over) appropriations and use of
“Unprogrammed Fund” in GAA
•! In 2008, P 132 billion of continuing appropriations added to the
budget (10.8% of 2008 budget)
•! In 2008, P29 billion of “Unprogrammed Funds” was released,
increasing the budget by the same amount.
–! realignment of debt service appropriations to fund programs and
projects
•! In 2009, P50 billion was transferred from “debt servicing” to other
GAA items. Actual debt service payments, however, exceeded
the reduced level.
–! discretionary rules on the treatment of “reenacted budget”
•! In 2007, actual allotment releases exceeded authorized
appropriations by P36 billion due to the addition of the reenacted
budget.
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EXPENDITURE OF PUBLIC FUNDS

•! President is Chief Executive, with the

authority to implement authorized
appropriations as prescribed

•! FLOW OF EXPENDITURES
–!appropriations of money by Congress
–!allotment of appropriations by Executive
(through DBM)
–!obligation of allotment by spending agencies
–!payment of obligations by agencies
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IN PRACTICE

•! an effective mechanism by which the

Executive exercise control over the use of
government funds
–!ensure budget allocation to government
agencies and instrumentalities
–!track funds accountability

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IN PRACTICE

•! system suffers from complaints of non-predictability of fund releases

disrupting delivery of public services
–! delayed enactment of budget by Congress
•! all budgets from 2001 to 2010 have been reenacted:
full: 2001, 2004, 2006
partial: all others
–! weak link: revenue collection
•! revenue targets submitted to Congress fell short of target in
2008 and 2009
–! centralized decision making in many agencies
•! 93% of DA and 40% of DAR budget in 2009 centrally
managed
–! political accommodations
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WITHHOLDING OF
APPROPRIATIONS
•! Suspension of expenditure of
appropriation when public interest so
requires, except otherwise provided in
GAA (Sec. 38, Book VI, EO 292)

•! Modification or amendment of allotment

previously issued, arising from shortfall of
revenue and other receipts (Sec. 23 (6)
Book VI, EO 292)
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IN PRACTICE

•! a necessary instrument for keeping public

expenditures in line with fiscal objectives
–!when there exists an unmanageable fiscal
deficit
•! imposition of reserves in 1998 as an aftermath of
the 1997 Asian financial crisis
–!withholding of appropriations in 2003 when
fiscal crisis was declared (deficit at 5% of
GDP)

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USE OF SAVINGS

•! use of savings to cover deficit in any other item of

appropriation (Sec. 38 and 49, Book VI, EO 292)
•! In practice
–! a practical approach to augment appropriations for
similar items in the GAA; likewise provides incentives
to agencies to economize
–! commonly subject to abuse:
•! forced savings to fund personnel benefits
•! use of savings to fund non-related items (ex., in
2008, P 140 billion used)

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APPROVAL OF LUMP SUM

APPROPRIATION
•! Special budgets to identify approved lump sum
appropriations in the GAA
–! Priority Development Assistance Fund
–! Calamity Fund
–! Contingent Fund
•! Special budgets for earmarked funds specifically
provided by law
–! AFMA
–! AFP Modernization Fund
–! Agrarian Reform Fund

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IN PRACTICE

•! an effective tool to cover contingencies

•! provides flexibility in operations
•! however, suffers from general lack of
transparency and abuse of discretion
–!ex., selective release of PDAF and other lump
sum funds

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GRANT OF PERSONNEL BENEFITS

•! RA 6758, as amended by Joint

Resolutions 1 and 2 by Congress on the
increase in salaries and benefits
•! Grant of performance incentives

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CHECKS TO
PRESIDENTIAL POWERS

•! Congressional oversight
•! Civil society participation
•! Public information system
–!budget transparency
–!periodic reporting
–!citizen-friendly budget
•! Abolition of unprogrammed funds

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END OF PRESENTATION

© 2010 Emilia T. Boncodin