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The Budget Cycle

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53 views2 pages

The Budget Cycle

Notes

Uploaded by

joybeja56
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Budget Cycle

The budget process is structured around a cycle that includes four main phases:

1. Budget Preparation

2. Budget Legislation

3. Budget Execution

4. Budget Accountability

1. Budget Preparation

The preparation phase involves several steps:

 Budget Call: The Department of Budget and Management (DBM) issues a budget call to all
government agencies, outlining targets, budget ceilings, and guidelines for submitting budget
proposals.

 Bottom-Up vs. Top-Down Approaches:

 Bottom-Up Approach: This method involves input from various levels of government,
starting from the lowest to the highest. It encourages participation and ensures that the
needs of different sectors are considered.

 Top-Down Approach: In contrast, this approach begins with the agency heads
determining budget allocations based on overarching government priorities.

 Zero-Based Budgeting: In 2011, the Philippine government shifted from incremental budgeting
to zero-based budgeting, requiring agencies to justify all proposed expenditures from scratch,
promoting efficiency and accountability.

 Budget Hearing: After agencies submit their proposals, the DBM conducts hearings to deliberate
on these proposals, make recommendations, and consolidate them into the National
Expenditure Program (NEP) and the Budget of Expenditures and Sources of Financing (BESF).

 Presentation to the President: The proposed budget is then presented to the President and
Cabinet for review and approval. Once approved, it becomes known as the President’s Budget,
which includes:

 President’s Budget Message: An explanation of the policy framework and budget


priorities.

 BESF: Estimated expenditures and expected sources of financing.

 NEP: Detailed proposed expenditures for all government entities.

2. Budget Legislation

This phase involves the formal legislative process:


 House and Senate Deliberations: After the President submits the proposed budget to Congress,
the House of Representatives conducts hearings to scrutinize the proposals and prepares the
General Appropriations Bill (GAB). The Senate then deliberates on the GAB.

 Bicameral Deliberations: A Bicameral Conference Committee harmonizes any differences


between the House and Senate versions of the GAB.

 Presidential Enactment: Once ratified by both Houses, the final GAB is submitted to the
President for enactment, becoming the General Appropriations Act (GAA).

3. Budget Execution

During this phase, the approved budget is implemented:

 Release Guidelines and Budget Execution Documents (BEDs): The DBM issues guidelines for
fund release and utilization. Agencies submit their BEDs, which outline their plans and
performance targets.

 Allotment Release Program (ARP): This program sets limits for allotment releases to ensure
compliance with the national budget.

 Cash Release Program (CRP): This program guides disbursement limits on a quarterly and
monthly basis.

4. Budget Accountability

Accountability is crucial in the budget process:

 Budget Accountability Reports: Agencies are required to submit reports detailing their financial
performance and adherence to the budget.

 Performance Reviews and Audits: Regular reviews and audits ensure that funds are used
effectively and that agencies meet their performance targets.

Citations:

[1] https://pdfcoffee.com/chapter-2-the-budget-process-4-pdf-free.html

[2] https://pdfcoffee.com/chapter-2-budget-process-pdf-free.html

[3] https://www.studocu.com/ph/document/mary-the-queen-college/government-accounting/chapter-
02-budget-process/10875130

[4] https://www.techtarget.com/searchcio/definition/strategic-management

[5] https://en.wikipedia.org/wiki/Strategy

[6] https://clearpurpose.media/what-is-strategy-fc17d86ef786?gi=3a9dbd55d2ad

[7] https://www.investopedia.com/financial-edge/0612/the-importance-of-strategic-planning.aspx

[8] https://online.hbs.edu/blog/post/what-is-business-strategy

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