The House of Representatives on Tuesday night approved on third and final reading the proposed “Budget Reform Act,” a certified urgent measure by President Rodrigo Duterte, which seeks to improve the budget process by enforcing greater accountability, strengthening the power of the purse of Congress, and increasing budget transparency and participation.
House Bill 7302 was first approved on second reading then subsequently on third and final reading by a vote of 158-8.
In a letter to Speaker Pantaleon Alvarez dated March 19, President Duterte certified as urgent HB 7302, or the proposed “An Act to Reform the Budget Process by Enforcing Greater Accountability in the Public Financial Management, Promoting Fiscal Sustainability, Strengthening Congress’ Power of the Purse, Instituting an Integrated PFM System and Increasing Budget Transparency and Participation.”
The President said HB 7302's immediate enactment into law is necessary “to address the immediate need for budget reforms, and to remedy the gaps in public spending, which hamper the ability of the government to deliver direct, immediate and substantial service to the people,” the President stated.
The bill, with Davao City Rep. Karlo Alexei Nograles as one of the principal authors, provides for accountability and integrity in the use of public resources by ensuring transparency, fiscal responsibility, results-orientation, efficiency and effectiveness.
The provisions of the bill shall apply to the management of revenue, expenditure, financing arrangements, and assets and liabilities of national government agencies, government-owned and controlled corporations, and local government units to the extent provided herein.
Nograles, chairman of the House committee on appropriations, mandates Congress to monitor and review government performance against the requirements of appropriations and related laws, and hold government agencies accountable for their financial and non-financial performance.
The bill empowers the President of the Philippines to approve the following: Statement of Fiscal Policy; Medium-Term Fiscal Strategy for submission to Congress; and changes in the functional, operational and organizational structure within and among the Department of Budget and Management), Department of Finance, and National Economic and Development Authority, as may be necessary, to ensure the effective implementation of the Act.
Moreover, it mandates the Department of Budget and Management not to approve any request for release of allotments for items of appropriation covered in the negative list or modification in the allotment nor recommend the use of savings by the President until such time the non-compliant agency has submitted the reports required under the Act.
It also allows the Commission on Audit to suspend and/or disallow any expenditure charged against augmentation using savings and any expenditure due to modification in the allotment which were made within the period succeeding the reporting period when the agency failed to comply with the reporting requirements under the Act.
The bill holds accountable public officials who fail to report on the income and funds retained at the end of a reporting period. It seeks to void all disbursements against such income or funds in subsequent reporting period when the agency failed to comply with the reporting requirements under the Act.
The Congress, through its appropriate oversight committee, may motu proprio or upon the request of COA or DBM compel the head of the non-compliant agency, under pain of contempt, to produce the required report or reports and to explain failure of submission of such report or reports.
Any public official or employee who shall cause the inclusion of fraudulent information in any accountability report shall be penalized with imprisonment of up to five years, or a fine not exceeding P1 million, or both, without prejudice to disallowances that may be made by the COA against expenditures related to such fraudulent information, provided that this fine is reviewed and adjusted periodically to be reasonable.
Any public official or employee who knowingly incurs any contractual commitment or authorizes any expenditure in violation of the provisions of the Act or takes part therein shall likewise be removed or dismissed from office, after due notice and hearing, even if no criminal charge is instituted against him.
