Notes on national budgeting: 1977, 1988, and 2025
Published Sep 26, 2025 01:24 am
At A Glance
- The idea was to think nationally and long-term.
Soon after Congress convenes every July, the President submits a proposal to the House of Representatives that details what the government needs to operate and to implement projects in the coming year; the revenues that it expects to generate; and how much it needs to borrow to cover the proposed expenditures.
Expenditure, revenue and borrowing levels are recommended to the President by an inter-agency group that takes into account the needs and desires of the Filipino people and the eventual impact on income, employment, domestic production, and other vital areas.
The size of the deficit and therefore new borrowing needs to provide for interest and principal payments on existing debt and among others, to consider the impact of domestic borrowing on inflation and the impact of foreign borrowing on the Balance of Payments.
Expenditure proposals can be programmed or unprogrammed. Programmed appropriations are those that are covered by assured revenues, while unprogrammed appropriations are for activities that will be implemented only if there are excess revenues, i.e., revenues over and above those needed to pay for programmed undertakings.
Contents of the General Appropriations Act
President Ferdinand E. Marcos issued P.D. No 1177 in July 1977. It anticipated the convening of the National Assembly (Batasáng Pambansâ) and had features that would have been nice to have in 2025:
- Inserting or diverting funds for questionable flood control projects was not possible under Section 28 of P.D. No. 1177: “Prohibition Against Increase of Appropriations. The National Assembly shall in no case increase the appropriation of any project or program of any department, bureau, agency or office of the Government over the amount submitted by the President in his budget proposal. In case of any reduction in the proposed appropriation for a project or program, a corresponding reduction shall be made in the total appropriation of the department, office or agency concerned and in the total of the General Appropriations Bill.”
- It had previously been possible to support pet projects by earmarking a targeted appropriation item or revenue source by inserting Special Provisions for the purpose. Section 29 of P.D. No. 1177 did away with this practice.
- The General Appropriations Act (GAA) used to enumerate all plantilla positions down to the most junior clerk and janitor. This empowered legislators so inclined to add, upgrade, diminish, or abolish posts, thereby gaining leverage to obtain some desired favor. In removing personal services itemization from the GAA, Section 30 of P.D. No. 1177 placed greater focus on objectives and the resources allocated to each, providing, “Content of the General Appropriations Act. The General Appropriations Act shall be presented in the form of budgetary programs and projects for each agency of the government, with the corresponding appropriations for each program and project, including statutory provisions of specific agency or general applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall be prepared by the Commissioner after enactment of the General Appropriations Act, for consideration and approval of the President.”
These reforms were abolished after President Marcos when in August 1988, Congress passed R.A. No. 6670 amending P.D. No. 1177. It repealed Sec. 28 and 29 and amended Sec. 30 to reinstate personal services itemization.
Capital Outlays in Public Works Acts and General Appropriations Acts
Capital outlays in the General Appropriations Act were originally limited to projects of relatively small amounts that could be completed within one year. Major capital outlays were included in a Public Works Act submitted by Government containing infrastructure and public works projects that operationalize the National Economic and Social Development Plan approved by NEDA. The idea was to think national and long-term. Appropriations in Public Works Acts would be valid as and until funding becomes available. This would allow gradual implementation of a highway network, for example.
Official Development Assistance Funding
Foreign borrowing was limited to major capital projects that were expected in the long run to increase productivity and tax revenue sufficient to meet amortization payments. The fund release and liquidation mechanism of Official Development Assistance (ODA) sources were also strict, permitting no room for corruption.
Pork Barrel
The reality of Pork Barrel funding was acknowledged but was made transparent and limited in amount. In 1978, each member of the Batasáng Pambansâ, whether majority or opposition, was invited to propose projects within a P250 thousand ceiling, the 2025 equivalent of about PhP18 million. The projects were then included and identified within the appropriation for the Department or Bureau concerned.
Insertions
From 1978 until 1985 when the Batasáng Pambansâ was in existence, we had a Parliamentary system whereby the Committee on Appropriations was Chaired by the Minister of the Budget. Committee and Plenary discussions were accordingly monitored and recorded by the Ministry staff and any changes in the President’s Budget were duly incorporated in the final General Appropriations Act. Insertions were of course possible, but opportunities were few.
On the other hand, opportunities under the present system are many. Amendments of the President’s Budget submission and the General Appropriations Bill can be validly made in Committee and Plenary deliberations of both Lower and Upper House and in the Conference Committee. Insertions can be made at every stage of the process, up to the time that the Bill is at the printing press. With the thousands upon thousands of Plantilla items and general and special provisions, it takes integrity, discipline, patience, and speed to validate the print-ready draft.
Comments are cordially invited, addressed to [email protected].