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The Budget Legislation Process in the Philippines

It is this time of the year again when Congress spends long hours, sometimes beyond midnight, to work on the national budget for the operations of the government in the next calendar year. Passing the budget it part of its function of prudently allocating public funds in order to achieve the country’s economic and social goals.


Budget Legislation in a Nutshell

Budget legislation is one of the four stages involved in the budget cycle of the government, the others being budget preparation, budget implementation and accountability.

As the term suggests, legislation is the process of making the proposed budget into a law just like any other legislation.

When the budget is passed as a law, government spending of public funds becomes authorized as mandated by the Constitution.

Understanding the Role of Congress in Crafting the National Budget

As the branch of government vested with the “power of the purse” or the ability to tax and spend public money for the government through legislation, Congress plays a big role in ensuring that each department, agency and instrumentality of government has enough fund to perform their job.

Aside from passing the budget bill in a timely manner, Congress, through its oversight functions, is also mandated to review the performance of each government department, agency and instrumentality and make necessary interventions if they see any misuse of fund or non-performance of duty.

How the Budget Becomes a Law

House Deliberations

The process of budget deliberation in the House starts with the President’s submission of the National Expenditure Program (NEP) which is a thick book of three volumes containing the details of the proposed national expenditure and the sources of financing.

This submission also includes the President’s Budget Message which enumerates the budget priorities of the year.

The Committee on Appropriations of the House conducts public hearings to tackle the budget for each agency.

The same committee will present the amended budget proposal before the plenary as General Appropriations Bill (GAB) which shall be sponsored and debated on and if possible, amendment before the bill gets approved and transmitted to the Senate.

Senate Deliberations

As stated in the Constitution, all budget bills must come from the House of Representatives; thus, the Senate will wait for the copy of the General Appropriations Bill (GAB) before they can consider it.

It is worth noting however, that even if the GAB is still yet to be submitted to them, the Senate, through the Committee on Finance, can already start their own budget hearings to review the proposed budget.

The chairman of the Committee on Finance then sponsors the GAB for its approval in the Senate.

Bicameral Deliberations

Just like in any legislation, there are instances when the provisions of the bills between the two houses differ from each other.

This cannot be avoided especially when it comes to the national budget.

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When this happens, a bicameral conference committee is formed with conferees coming from each house to harmonize the different provisions and arrive at a single version of the General Appropriations Bill.

Ratification and Enrollment

Once the disagreeing provisions of the GAB are already threshed out, the final version of the bill is submitted back to the Senate and the House of Representatives by the bicameral conference committee.

Each house will then vote to ratify the final GAB. By ratifying it, the bill now becomes authorized.

Both houses then enroll or submit the ratified GAB to the President for his signature.

Enactment of the GAA

The last stage of budget legislation is the signing of the General Appropriations Act into law by the President.

With this, the budget will now be in full force and effect.

A Re-Enacted Budget Is a Possible Outcome

The previous year’s budget is automatically recycled if Congress fails to pass the General Appropriations Bill on time.

In 2019 for example, the Philippine government operated on a re-enacted budget for four months after deadlock between the House of Representatives and the Senate happened due to their disagreeing versions.

Experts say that a re-enacted budget is detrimental to the nation as it delays the implementation of projects and programs.

Transparency and Accountability

Through the years, the Philippines is in consistently listed as one of the most corrupt countries in the world.

In fact, the 2020 Corruption Perception Index of the watchdog Transparency International indicates that the country retained its low score of 34 out of 100 points due to its stagnant response and policies corruption since 2012.

For fiscal year 2022, the Philippine government is proposing a P5.024-trillion national budget to fund the implementation of projects and programs including the construction and repairs of roads, bridges, school buildings, hospitals; conditional cash transfer program; assistance to indigent patients; social pension for senior citizens; free college tuition and fees in state universities and colleges; implementation of the national ID system; hiring of additional healthcare workers, teachers, judges and public attorneys, among many others.

As citizens of this country, it is everyone’s duty to demand transparency in the allocation of resources and accountability for any misuse of public funds in order for the country to achieve its economic and social goals.

One way of doing so is through electing members of Congress who shall ensure that the best interest of the taxpayers is put forward in the crafting of laws and policies related to the national budget, among others.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

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