This document provides definitions and explanations of key terms and processes related to the Philippine government budget cycle. It discusses the stages of budget preparation, execution, and accountability. It defines acronyms for government agencies and budget-related terms. The stages of budget execution include allotment release, obligation, cash allocation, and disbursement. Budget accountability involves setting targets, citizen engagement, monitoring and evaluation, accountability reports, performance review, and auditing.

1. BUDGET
CYCLE

2. ACRONYMS AND MEANINGS
SPFs – Special Purpose Fund
 are budgetary allocations in the General Appropriations Act (GAA) allocated for
specific purposes. These are usually lump sum in nature, as the recipient
departments or agencies and/or the specific programs and projects have not yet
been identified during budget preparation and legislation.
DPWH- Department of Public Works and Highways
 the executive department of the Philippine government solely vested with the
Mandate to “be the State's engineering and construction arm.

3. GAA – General Appropriations Act
 covers the annual operating requirements of agencies of government. The GAA
is the most comprehensive source of appropriation cover for the budget of the
government.
BEDs – Budget Execution Documents
 annual documents required at the onset of the budget execution phase, which
contain the agencies' targets and plans.
DBM – Department of Budget and Management
 It is responsible for the sound and efficient use of government resources for
national development and also as an instrument for the meeting of national socio-

4. SAROs – Special Allotment Release Orders
 A specific authority issued to identified agencies to incur obligations not exceeding a
given amount during a specified period for the purpose indicated.
NCA – Notice of Cash Allocation
 Cash authority issued by the DBM to central, regional and provincial offices and
operating units through the authorized government servicing banks of the MDS, to
cover the cash requirements of the agencies.
DOF – Department of Finance
 is responsible for the sound and efficient management of the financial resources of
the government by formulating, institutionalizing, and administering fiscal policies in
coordination with other agencies of the government; generating and managing the
financial resources of government.

5. BTr – Bureau of Treasury
 is committed in making every effort to fully observe existing laws and regulations
relating to data privacy.
TSA -Treasury Single Account
 is a unified structure of government bank accounts that aims to consolidate and
optimize the use of Government cash resources.
BPA – Budget Partnership Agreements
 are legal instruments that define a mechanism for CSOs' formal engagement in
budget preparation and execution at the agency level.

6. BUB – Bottom- Up Budgeting
 an approach to preparing the budget proposal of agencies, taking into consideration
the development needs of poor cities/municipalities as identified in their respective
local poverty reduction action plans that shall be formulated with strong participation
of basic sector organizations.
CSO – Civil Society Organizations
 Non-State, not-for-profit, voluntary entities formed by people in the social sphere that
are separate from the State and the market. CSOs represent a wide range of
interests and ties. They can include community-based organizations as well as non-
governmental organizations (NGOs). In the context of the UN Guiding Principles
Reporting Framework, CSOs do not include business or for-profit associations

7. COA- Commission on Audit
 is an independent constitutional commission established by the Constitution of
the Philippines. It has the primary function to examine, audit and settle all
accounts and expenditures of the funds and properties of the Philippine
government.
URS – Unified Reporting System
 provides a facility for online data entry and submission of the various reports
required.
ZBB- Zero – Based Budgeting
 a budgeting technique in which all expenses must be justified for a new period or

8. DBCC – Development Budget Coordination Committee
 reviewed the government's medium-term macroeconomic assumptions, fiscal
program, and growth targets for FY 2022 to 2028 to take into account the
administration's priorities and fiscal strategy, latest domestic developments, and
external pressures.

9. C. BUDGET EXECUTION

10. WHAT IS BUDGET EXECUTION?
It is at the budget execution stage that
the expenditure program is implemented.
Allotments are issued, chargeable
against the regular agency budgets. It is
also at this stage where agencies may
submit requests for availment from
SPFs. Agencies are often required to
submit additional reports and documents
to support their requests.

11. 1. EARLY PROCUREMENT ACTIVITIES
October to December of Prior FY
Agencies are required to prepare their Annual
Procurement Plans and other bid documents
before the new fiscal year starts. Moreover, the
government adopted a policy of allowing
agencies—such as the DPWH and others which
implement infrastructure projects—to bid their
projects before the GAA is enacted. Early bidding
allows agencies to award their approved projects
as soon as the new GAA takes effect.

12. October to December of Prior FY
Agencies submit Budget Execution
Documents (BEDs) to outline their
financial plans and performance targets
for the year. The DBM consolidates these
plans into the budget program, which
breaks down the allotment and cash
releases for each month of the year.
2. Budget Program
12

13. 3. ALLOTMENT RELEASE
January (Comprehensive) and Throughout FY
The DBM issues allotments to agencies to
authorize the latter to incur obligations. With the
GAA-as-Release Document, the enacted Budget
itself serves as the allotment release for all
budget items except those contained in a
negative list that are issued the Special Allotment
Release Orders (SAROs) after agencies comply
with the documentary requirements.

14. 4. OBLIGATION
THROUGHOUT FY
14
Agencies incur liabilities that the
national government will pay for, as
they implement programs,
activities, and projects. Agencies
incur obligations when they hire
new staff or enter into a contract
with suppliers of goods and
services that are subject to a
transparent and competitive
procurement process.

15. 5. CASH ALLOCATION
15
January (Comprehensive) and Throughout FY
The DBM issues disbursement
authorities, such as the Notice of
Cash Allocation (NCA), to authorize
an agency to pay the obligations it
incurs. To ease budget execution,
the DBM issues comprehensive
NCAs to cover the cash
requirements of agencies for the
first semester.

16. 6. DISBURSEMENT
Throughout FY
Monies are paid out from the Treasury
to settle obligations that government
incurred for the delivery of services to
citizens. To ease the payments
process, the DBM introduced
checkless and cashless disbursement
schemes. The DoF-BTr also
implemented the TSA to improve the
management of the government’s cash
16

17. D. BUDGET ACCOUNTABILITY
17

18. WHAT IS BUDGET ACCOUNTABILITY? 18
The accountability phase is the final phase of
the budget process. This is when the
agencies report their actual physical and
financial performance.

19. 1. PERFORMANCE TARGETS
19
January of FY
Budget accountability starts with the
setting of targets that agencies are to be
held accountable for. With the
Performance-Informed Budget, the GAA
now contains the targeted outcomes,
outputs and performance indicators of
each agency. These targets are also
reflected in agencies’ BEDs (see “Budget
Program” under Budget Execution), which
effectively serve as the agencies’ plans for

20. 2. CITIZEN ENGAGEMENT 20
Throughout FY
To empower citizens during Budget
Accountability, the government ensures
transparency--agencies disclose their budgets,
reports, and other relevant information through
the Transparency Seal; and make available data
in open format. In addition, the government also
publishes the People’s Budget along with other
technical documents and reports. Citizens
participate formally in the monitoring of programs
and projects through BPAs, BUB, and other
mechanisms. In addition, CSOs participate in the
audit process through the COA’s Citizens’

21. 3. MONITORING AND EVALUATION21
Throughout FY
Agencies must set-up and
implement monitoring and
evaluation mechanisms to
ascertain the effectiveness of the
programs and projects on which
they spend. Agencies must have
internal control mechanisms to
ensure that public funds are
spent and accounted for properly.

22. 4. AGENCIES’ ACCOUNTABILITY REPORTS 22
Monthly and Quarterly
Agencies submit
Financial Accountability
Reports on a monthly or
quarterly basis, as
required by the DBM
and the COA. These
reports are submitted
online through the
Unified Reporting

23. 5. PERFORMANCE REVIEW
23
Throughout FY
The DBM reviews the financial and
physical performance of agencies
against their targets. Review
mechanisms include: the ZBB, to
evaluate the efficiency and
effectiveness of programs; and the
FTDUs, to closely monitor agencies’
performance and address bottlenecks
proactively.

24. 6. IN -YEAR REPORTS 24
Monthly and Quarterly
The DoF and the DBM regularly
publish snapshots of the
government’s fiscal performance,
revenue collections, debt, and
expenditures.

25. 7. DBCC MID-YEAR REPORT
By September of FY
The DBCC publishes a comprehensive
report on macroeconomic developments,
the fiscal situation of the national
government, and the performance of key
programs and projects. The Mid-Year
Report also discusses any adjustments
that the DBCC makes to the
government’s economic projections and
fiscal targets for the rest of the year.

26. 8. DBCC YEAR-END REPORT
Within the Following FY
The DBCC publishes another
comprehensive report covering the
full year. Compared to the Mid-Year
Report, the Year-End Report provides
more discussions and details about
actual revenue and expenditure
outturns against program, and the
financial and physical performance of
priority programs.

27. 9. AUDIT
Within the Following FY
The COA reviews the accounts of each agency
to ascertain if public funds are used properly,
according to the law and standards, and with
value-for-money. The COA produces audit
reports for each agency; a whole-of-
government Annual Financial Report; as well
as Special Audit Reports. The DBM uses
COA’s Audit Reports in confirming agency
performance, determining budgetary levels for
agencies, and addressing issues in fund
usage.

28. Reported by:
JONA G. SUAREZ
eSource:
https://www.dbm.gov.ph/wp-
content/uploads/Executive%20Summary/2016
/Budget%20Cycle.pdf