The document discusses the history and processes of fiscal administration in the Philippines. It begins with definitions of fiscal administration and describes how it has evolved from the Revolutionary Government in the late 1800s to present day. It outlines the principal agencies involved in fiscal functions like the Department of Finance, Department of Budget and Management, and Commission on Audit. The document also discusses budgeting concepts, income sources, fiscal control mechanisms, and new policy guidelines for budgeting that focus on priority development areas and performance-based spending.

1. PUBLIC FISCAL ADMINISTRATION
Filipino Administrative Institutions
PA 211

2. Fiscal Administration
• Is the act of managing incoming and outgoing
monetary transactions and budgets for
governments, educational institutions,
nonprofit organizations, and other public
service entities.
• Refers to systems, processes, resources, and
the policy, environment, government, the
inter-governmental and inter-local fiscal
relations, affecting among others.

3. Fiscal Administration
 Revolutionary Government
Emiliano Riego de Dios (Minister of Finance) Tejeros Convention
Baldomero Aguinaldo (Director of Finance) Naic, Cavite
Mariano Trias (Minister of Finance) Jan. 21 – May 7, 1899
Hugo Ilagan (Minister of Finance) May 7 – Nov. 13, 1899
 1901 – Department of Finance and Justice
(Second Philippine Commission) appointed by Pres. McKinley
Headed by William Howard Taft
Sec. Gregorio Araneta (July 1, 1908 – Oct. 30, 1913)
Sec. Victorino Mapa (Nov. 1, 1913 – Jan. 14, 1917)
 1916 – Reorganization Act No. 2666
DFJ split into two

4. Fiscal Administration
1936 – DOF and Budget Commission
January 3, 1949 – Central Bank of the
Philippines was created
(RA 265) Central Bank Act of 1948.
1970 – with the adoption of the parliamentary
form of government, the Department was
changed to a Ministry.

5. Fiscal Administration
1980s – Inter-agency committees
 Investment Coordination Committee (ICC)
 Government Corporate Monitoring and
Coordinating Committee (GCMCC)
1987 – the Ministry of Finance was reverted to a
Department following the ratification of the 1987
Constitution which provided for a presidential
form of government.

6. Fiscal Administration
1988 – Value Added Tax was introduced and
replaced a complicated sales tax structure.
1997 – Asia’s Newest Tiger
National Government recorded a budget
surplus for the third consecutive year, and the
public sector generated its fiscal surplus since
the sector started to be monitored in 1985.

7. • Fiscal administration zeros in on the management
of financial resources and those activities and
operations to generate revenue, make those
available, and see to it that funds are wisefully,
lawfully, effectively and efficiently spent.
• The administration of finances is an intrinsic
component of management responsibility. There
is an intimate linkage between administering and
funding. An administrative act has financial
implications.

8. Fiscal Policy of the Philippines
• Fiscal policy refers to the “measures employed
by governments to stabilize the economy,
specifically by manipulating the levels and
allocations of taxes and government
expenditures. Fiscal measures are frequently
used in tandem with monetary policy to
achieve certain goals.”

9. OVERVIEW
A DECISION TO INCREASE TAXES
INCREASES REVENUE OF GOVERNMENT
TO IMPLEMENT SOCIAL AMELIORATION PROGRAM
CREATES A CHARGE ON REVENUE EARNED WHILE AT
THE SAME TIME DISTRIBUTES AND DISPENSES SOCIAL
BENEFITS.

10. ORGANIZING FOR FISCAL
ADMINISTRATION
• Interested in it
Top
Management
Level
• Deeply involved in it
Middle
Management
• Affected by
whatever
results from it
Rank and File

11. Principal Agencies tasked with fiscal functions:
A. CONGRESS (Lower House)
B. DEPARTMENT OF FINANCE
C. DEPARTMENT OF BUDGET AND MANAGEMENT
D. COMMISION ON AUDIT

12. CONGRESS (Lower House)
Responsible for revenue and expenditure
policies.

13. DEPARTMENT OF FINANCE
Revenue generation and collection
Fund custody
Disbursements
Keeping of accounts

14. DEPARTMENT OF BUDGET & MANAGEMENT
Review of estimates and fiscal policy studies in close
consultation with the National Economic Development
Authority.

15. COMMISSION ON AUDIT
Conducts fund and performance audit to see to it that
expenditures are in accordance with the Appropriation Law
approved.

16. BANGKO SENTRAL NG PILIPINAS (BSP) and
OTHER ECONOMIC PLANNING ENTITIES
(Offices & Agencies)
• See to it that fiscal plans and programs are
geared towards national development.

17. FISCAL CONTROL MECHANISMS
Four Justification for Expenditure Control
through the Budget:
1) Prevent Misappropriation of Funds
2) Control to Implement Prospective Policy
3) Ensure the Wisdom and Propriety of
Expenditure
4) Prevent Deficits

18. BUDGETING CONCEPTS
1. Planning – Programming Budget System
(PPBS) Type
2. Zero – Base Budgeting (ZBB) Type

19. BUDGETING CONCEPTS
Planning – Programming Budget System (PPBS)
Type.
a) Gives assurance that the budget will help
achieve desired agency results.
b) Unit head defends the budget, explains its
contribution to the realization of agency goals,
develops a cost projection for each program.
c) Submits this to top management which reviews
the program and decides on final budget
allocation.

20. BUDGETING CONCEPTS
Zero – Base Budgeting (ZBB) Type
a) The agency justifies the entire appropriation request
for the fiscal year as if the programs are entirely new,
instead of justifying only the increase requested
above the previous year’s appropriation.
b) The agency is obligated to defend all programs every
year and rank these in terms of priority using the ratio
between cost and benefit criterion.
c) Provides opportunity for top management to re-
evaluate the need for on-going programs, compare
these with the proposed and the prioritized for
implementation.

21. LINE ITEM versus
PERFORMANCE BUDGETING
1. Line Item
• Object of the expenditure type
• Consists of a detailed listings of every position to be
filled
• Gives the legislative body tremendous discretion to
strike out or to approve individual items.
• Funds appropriated may not be transferred from one
category of expense to another.
• Also known as “rule of thumb” budgeting where
figures of past years are reflected but without income
indicators.

22. LINE ITEM versus
PERFORMANCE BUDGETING
Three columns of figures appear in each budget
sheet:
a) Actual expenditure for each object during the
previous fiscal year
b) Estimated amounts to be spent for the same
objects for the current fiscal year
c) Amount desired for the same objects for the
incoming or future fiscal year

23. LINE ITEM versus
PERFORMANCE BUDGETING
2. Performance Budgeting
• is lump sum budgeting
• is program budgeting which spells out functions,
activities and projects
• allow transfer of funds from one organizational
unit to another, between work activities and
objects to spent for.
• there is difficulty in identifying what work units
perform or not perform, since its most important
concern is the overall performance of the agency.

24. NEW POLICY GUIDELINES
FOR BUDGETING
Based on this agenda:
The formulation of the national budget must
be in the context of a three year planning
framework
Expenditures must achieve program targets
and support development strategy

25. NEW POLICY GUIDELINES
FOR BUDGETING
 Agency programs will be supportive of the identified priority areas
which include the following:
1. Modernization of the agricultural sector to augment farmer
income, bolster production and attain food security.
2. Improvement of the quality of basic social services like health
and sanitation, nutrition, education, social welfare and housing.
3. Acceleration of countryside infrastructure development.
4. Enhancement of global competitiveness through liberalization,
deregulation, and privatization.
5. Provision for macroeconomic stability by instilling fiscal
discipline, prudent government spending and efficient revenue
generation.
6. Reform in governance to make it responsive to the current
domestic and global environment.

26. PRINCIPLES FOR AGENCY GUIDANCE
1) Prudent Spending
2) Entrepreneurial Budgeting
3) Performance Based Budgeting
4) Wholistic Budgeting
5) Consistency with Sub-Sectoral Development
Objectives

27. INCOME SOURCES
1. Tax Revenue
2. Non-Tax Revenue

28. INCOME SOURCES
1) Tax Revenue
a) Income tax
b) Property tax
c) Domestic goods and services tax
d) International trade and transactions sales tax
e) Value added tax (VAT)

29. INCOME SOURCES
2) Non-Tax Revenue
a) Operating and service income
b) Income from public enterprises and investments
c) Miscellaneous income
d) Capital revenue
e) Grants
f) borrowings

30. END OF PART 1
Public Fiscal Administration
THANK YOU!
Reporter:
Ryan Candido Amilhussin