COMMON BUDGET TERMINOLOGIES

AND CONCEPTS
A
Accounts Payable.
Obligations/commitments of national government agencies,
whether current year and prior years, for which, services have been rendered/goods
have been delivered or projects have been completed and accepted.
Activity. A work process which contributes to the implementation of a program,
sub-program or project.
Administrative Positions. Refer to those positions performing general services, clerical,
human resource management, financial management, records management, custodial and
other related functions.
Administration of Lump-Sum Funds. Power granted to the Department of Budget to
administer the Lump-Sum Funds appropriated in the General Appropriations Act, except
as otherwise specified, including the issuance of Treasury Warrants covering payments to
implementing agencies or other creditors, as may be authorized by the President.
Agency. Refers to any of the various units of the government, including an office,
instrumentality or Government-Owned and/or Controlled Corporation (GOCC) that may
not approximate the size of a department, but which nevertheless performs tasks that are
equally important and whose area of concern is nationwide in scope (e.g. Other
Executive Offices). For budget and accounting purposes, an agency is an entity under a
department whose budget is directly released to the latter, and may include the summation
of all budgets of sub-agencies listed under it, if any.
In budgetary language, agency also refers to not just the departments in the executive
branch but to the thirty-four departments and agencies and its attached agencies, bureaus,
offices, GOCCs and other instrumentalities in the three branches of government including
the independent commissions.
Agency Budget Matrix (ABM). Disaggregation of the agency budget showing the needing
and not needing clearance to determine the items to be issued special allotment release
orders (SAROs) as well as the amount to be released comprehensively.
Agency Performance Review (APR). The process of determining the level of
accomplishment of each agency in terms of physical outputs, income generated, and
actual expenditures incurred in the production/delivery of goods and services to the public
vis--vis the targets/budgets for the same period.
Allocative Efficiency. Refers to the achievement of efficiency through a better matching of
public services to local preferences.
Allotment. Authorization issued by DBM to an agency, through Agency Budget Matrix
(ABM) or Special Allotment Release Order (SARO), which allows the latter to incur obligation
for specified amounts contained in a legislative appropriation.
Allotment Class. Classification of expenditures under the following categories:
1. Personal Services (100)
2. Maintenance and other Operating Expenses (200)
3. Capital Outlays (300)

Allotment Release Program (ARP). Overall ceiling of the total obligational authority which
may be issued to the agencies for the year, from all fund sources.
Allocation to Local Government Units (ALGU). The share of Local Government Units (LGUs)
from the internal revenue collections of the National Government (NG) based on a sharing
scheme computed for each LGU provided for under the Local Government Code and other
special laws.
Amortization. Principal repayments on loans, either domestic or foreign and whether on
direct or assumed liabilities, made by the national government.
Appropriation. An authorization made by law or other legislative enactment, directing
payment out of government funds under specified conditions or for specific purposes.
Appropriations, Automatic. Refers to appropriations programmed annually and, by virtue
of outstanding legislation does not require periodic action by Congress.
An authorization made annually or for some other period prescribed by law, by virtue
of standing legislation which does not require periodic action by the Congress of the
Philippines. These are automatically and annually included in the National Expenditure
Program of the National Government.
One-time legislative authorization to provide funds for a specified purpose, for which the
amount may or may not be fixed by law, and is made automatically available and set aside
as needed. Since it is already covered by a separate law, it does not require periodic action
by congress, and need not be included in the legislation of annual appropriations. Among
these items are: a) Debt Service (per P.D. No. 1967, R.A. 4860, and R.A. 245 as amended) interest payments for foreign and domestic debt; b) Net Lending (PD 1177 and E.O. 292) - to
GOCCs; c) Special Accounts - per specific laws, e.g., Wildlife Management Fund (DENR-R.A.
9147) sourced from fines etc. relating to the implementation of the Wildlife Act.
Appropriations, Committee on. The committee of the House of Representatives that has
jurisdiction over All matters directly and principally relating to expenditures of the national
government including payment of public indebtedness, creation, abolition and classification
of positions in government, and the determination of salaries, allowances and benefits of
government personnel.
Appropriations, Continuing. An authorization to support obligations for a specified
purpose or project, even when these obligations are incurred beyond the budget year.
Because MOOE and CO appropriations in the GAA are valid for two years, unobligated
and unreleased appropriations for these budget items are valid until the end of their
second year and are classified as Continuing Appropriations.
Appropriations, General. An authorization for incurring obligations during a specified
budget year as contained in the GAA. The GAA is the legislative authorization that contains
the new annual appropriations authorized by Congress in specific amounts for salaries,
wages and other personnel benefits; MOOE; and CO to be spent for the implementation of
programs and activities of all departments, bureaus and offices of government for a given
year. Starting FY 2013, the GAA is valid up to the end of the calendar year.
An authorization for incurring obligations during a specified budget year. This pertains
to the annual appropriations under the General Appropriations Act.
Appropriations, Reserves. Amount set aside to provide for contingencies and emergencies
which may arise later in the calendar year and which would otherwise require deficiency
appropriations.

Appropriations, Supplemental. Additional appropriation authorized by law to augment

the original appropriations which proved to be inadequate or insufficient for the particular
purpose intended due to current economic, political or social conditions. Supplemental
Appropriations must also be supported by a certification of availability of funds by the
Bureau of Treasury.
Assumed Liabilities. Domestic or foreign loans originally contracted or liabilities on
securities issued by Government Financial Institutions (GFIs) or Government Owned or
Controlled Corporations (GOCCs) which are transferred to and form part of the liabilities
of National Government.
Audit Reports. A publication of the Commission on Audit, as the Supreme Audit Institution,
that include:
Annual Financial Reports on the financial conditions and results of operations of the
government, its subdivisions, agencies, and instrumentalities, including government
corporations and local government units.
Annual Audit Reports of each government agency, local government unit, and
government corporation, which, among others, contain auditors findings on the fairness of
financial statements, other observations as well as recommendations.
Augmentation. Refers to additional funding from savings or by use of appropriations
authorized in the General Appropriations Act to a program, activity, or project with an
appropriation, which upon implementation or subsequent evaluation of needed resources,
is determined to be deficient.

B
Balanced Budget. Occurs when revenues collected equal cash disbursements (excluding
debt repayments and payments on nonbudgetary accounts) of the NG during a given year.
A budget is said to be balanced when revenues match expenditures or disbursements.
When expenditures exceed revenues, the government incurs a deficit which may result in
the following situations;
The government borrows money either from foreign sources or from the domestic capital.
The government borrows money from the Bangko Sentral ng Pilipinas.
The government withdraws funds from its cash balances in the National Treasury.
Balance of Payments (BOP). A system of accounts covering a particular period and is
intended to record systematically:
a) flows of real resources, including the services of the original factors of production,
between the domestic economy of a country and the rest of the world;
b) changes in the countrys foreign assets and liabilities that arise from economic
transactions; and,
c) unrequited transfers, which are the counterpart of real resources or financial claims
provided to, or received from, the rest of the world without requital.
Balance on Current Account. The sum of visible or merchandise trade balance (exports
and imports services). This balance measures the net transfer of real resources between the
economy of the Philippines and the rest of the world.
Bank Statement. Statement prepared by the government servicing banks showing the
daily negotiated Modified Disbursement System (MDS) checks that are charged against the
MDS central account and replenishments made by the Bureau of Treasury (BTr).
Bicameral Conference Committee. Refers to the committee created by the House of
Representatives and the Senate to thresh out differences and arrive at a common version of
the General Appropriations Bill.
Borrowings. Funds obtained from repayable sources, including loans secured by the
government from financial institutions and other sources internal and external, to finance
development projects and/or budget support.
Bottom-up Budgeting. An approach to preparing the budget proposals of agencies taking
into consideration the development needs of poor cities or municipalities as identified in
their respective local poverty reduction plans.
A participative approach started for the 2013 Budget to identify programs/projects addressing
the development needs of poor cities/municipalities based on local poverty reduction plans,
with the active participation of national agencies, civil society organizations and localities.
These programs/projects are included in the budgets of participating national agencies.
A distinct fund or program in the 2013 and 2014 GAA. Renamed as Grassroots Participatory
Budgeting Process.
Budget. An estimated schedule of expenditures, based on either obligations or cash concepts
and sources of financing, either from revenues, borrowings or cash balance drawdowns.
Budget Accountability Reports (BARs). Reports on the agencies actual financial and
physical accomplishments/performance for a given period.

Budget Call. A document issued by the DBM at the start of the budget preparation. It
contains the following:
Budget Priorities Framework, which sets budget priorities, macroeconomic assumptions,
and fiscal parameters for the Proposed Budget
National Budget Call, which sets guidelines, procedures, and prescribed forms in formulating
budget proposals; a separate Corporate Budget Call is issued for government corporations.
Budget Deficit. The shortfall of revenues from disbursements excluding debt repayments
and payments on budgetary accounts.
Budget, Proposed. A document submitted by the Executive to Congress for its review and
approval. It is composed of the following documents;
Presidents Budget Message, where the President explains to Congress the rationale
behind the proposed Budget.
Budget of Expenditures and Sources of Financing (BESF) contains macroeconomic
parameters and breakdown of expenditures and funding sources
National Expenditure Program (NEP) contains the Propose Budget in the form of
proposed legislation; contains targeted outcomes and outputs with corresponding
indicators alongside the financial plan.
Details of the Budget contains the disaggregation of programs, activities and projects of
each agency.
Staffing Summary contains a summary of the staffing complement of each agency, including
the number of positions and amounts allocated for these.
Budget, Enacted. The annual General Appropriations Act (GAA) as well as supplemental
budgets that have been approved by Congress and signed by the President into law; it comes
with the Presidents Veto Message, where certain budget items are subjected to direct veto
or conditional veto.
Budget, Delayed Enactment. The situation that occurs if Legislature fails to pass before
the start of a new fiscal year a general appropriations bill under the deadline set by the
Constitution.
Budget, Reenacted. The situation that occurs if the Legislature fails to pass a general
appropriations bill for the ensuing year under the deadline set by the Constitution. The
general appropriations law of the preceding fiscal year is deemed re-enacted and remain in
force until the general appropriations bill is passed by Congress.
Budget Execution Documents (BEDs). Annual documents required at the onset of the
budget execution phase, which contain the agencies targets and plans for the current year.
Budget of Expenditures and Sources of Financing (BESF). A document which reflects
the annual program of estimated expenditures presented by the executive branch to the
legislature for spending authority, accompanied by an estimate of expected sources of
financing.
A document which reflects the annual program of estimated expenditures of the
National Government accompanied by an estimate of expected sources of financing,
which is constitutionally mandated to be submitted by the executive branch to the
legislature to support the National Budget proposal.

Budgetary Power. The power of the president to determine the government needs for
which he or she proposes corresponding appropropriations.
Budgetary Support. Proceeds of program loans and grants that are attributed to expenditure
items previously authorized in the General Appropriations Act.
Budgetary Support to Government Corporations. The National Government assistance
to GOCCs in the form of equity, subsidy, relent loan proceeds or advances for the servicing of
debts guaranteed by the national government.
Budgetary Support to Government Corporations. Refers to either subsidies for operations
or projects, equity contributions, and net lending and/or advances to Government-Owned
or Controlled Corporations (GOCC) for loan repayment.
Build-Operate-and-Transfer. A contractual arrangement whereby the project proponent
undertakes the construction, including financing of a given infrastructure thereof. It has
several variances such as Build Operate and Own, Build Lease and Transfer, Build and Transfer,
Build Transfer and Operate, etc.

C
Capital Expenditures or Capital Outlays. Expenditures for the acquisition of fixed
assets and other goods and services the productive benefits of which extend beyond the
fiscal year. These include acquisition of land and improvements, buildings and structures,
equipment and furniture, information technology, transportation and equipment,
machineries, public infrastructure and investments in the capital stock of Government
Owned or Controlled Corporations and their subsidiaries.
Capital Inflows. Private and official inward flows of money to the country in the form of
investments, grants and loans.
Capital Revenues. Proceeds from the sale of fixed or capital assets such as land, buildings,
machinery, stocks and intangibles, including receipts of unrequited transfers for capital
purposes from non-governmental sources.
Cash Advances. Advances granted to officers and employees which may be classified into:
(a) regular cash advance those granted to cashiers, disbursing officers, paymasters and/
or property/supply officers for salaries and wages, commutable allowances, honoraria and
other similar payments and petty cash operating expenses; (b) special cash advances those
granted on the explicit authority of the agency heads to duly designated disbursing officers
or employees for other legally authorized purposes.
Cash Budget. Aggregate of revenues, borrowings and disbursements of the national
government showing a cash deficit or surplus. It reflects the actual deposits and withdrawals
of cash by the national government agencies to the Bureau of the Treasury.
Cash Disbursement Ceiling (CDC). An authority issued by the DBM to departments with
overseas operations e.g., DFA and DOLE to utilize their income collected/retained by their
foreign service posts (FSPs) to cover its operating requirements but not to exceed the
released allotment to the said post.
Cash Operations Reports. A statement containing cash receipts, cash disbursement, the
resulting surplus or deficit, and the corresponding domestic and foreign financing to cover
such surplus or deficit.
Cash Release Program (CRP). Overall ceiling of disbursement authorities which may be
issued to the agencies for a particular period.
Check Floats/Outstanding Checks.
encashed by the payee.

Checks issued by agencies which were not yet

Commitment Fee. A levy or charge imposed by creditors on the undrawn amount of the
loan.
Commodity Grants. Donations/ contributions/gifts in kind received and which are
subsequently monetized. The peso proceeds are thereafter deposited with the BTr to be used
or expended for projects specified in the grant documents between the donor and the NG.
Commodity Loans. Foreign loans in the form of goods received which are subsequently
monetized to finance programs and projects of implementing agencies. Peso proceeds are
thereafter deposited with the BTr to be used or expended for projects specified in the loan
documents.
Common Fund Concept. A budgetary procedure whereby cash allocation released to
agencies may be used to cover payment of obligations made during the year, chargeable
against available allotment, regardless of source.

Conditional Veto. A type of veto in which the President objects to parts of a bill and proposes
amendments or set conditions that would make it acceptable.
Consolidated Public Sector Deficit or Surplus. The combined deficit of the NG, the
Central Bank restructuring accounts, the major non-financial government corporations, the
government financial institutions, the local government units, the social security institutions,
and the Bangko Sentral ng Pilipinas.
Consolidated Public Sector Fiscal Position CPSFP). Refers to the net deficit or surplus
calculated after summing-up the budget balances of all government entities, namely the
national government, the non-financial government corporations,
Constructive Cash. Non-cash availment of foreign loans for utilization by NG agencies and
GOCCs, i.e., payment to suppliers directly made by lending institutions.
Contingent Fund. Refers to requirements of new and/or urgent projects and activities that
need to be implemented during the year; as well as to augment existing appropriations for
local and foreign travels of the President. All releases require the Presidents prior approval.
Conversion of GOCC Debts into Equity/Subsidy. A mechanism by which the government,
through the BTr, converts into government equity and/or subsidy all outstanding debts of
the GOCCs in the event any GOCC is unable to settle its obligations.
Cost of Qualified Borrowings. The weighted average interest paid by the World Bank or the
Asian Development Bank on portions of its borrowings.
Counterpart Fund. The portion of the cost of a foreign-assisted project, which is,
shouldered by the borrower as contribution to the completion of the project as stipulated in
the foreign loan or grant agreement.
Current Operating Expenses. Refers to appropriations for the purchase of goods and
services for current consumption or for benefits expected to terminate within the fiscal year.
Amount budgeted for the purchase of goods and services for the conduct of normal
government operations within a budget year. Includes goods and services that will be used
or consumed during the budget year.
Current Surplus. Excess of revenues over expenditures.
Custodial Funds. Refer to receipts or cash received by any government agency whether
from a private source or another government agency to fulfil a specific purpose. Custodial
receipts include receipts collected as an agent for another entity. These include trust receipts
both from an individual or corporation that are required to be held by government until
the outcome of a courts case or procurement activity is determined, as well as cases where
a department or agency holds receipts as a trustee for the fulfilment of some obligations.

D
Debt Amortization. The sum of principal repayments for loans payable by regular
installments, and the annual contribution to the debt sinking fund for debts payable only
upon maturity.
Debt Buy-Back Operation. A debt reduction scheme which involves the repurchase of
outstanding debts by the government from the secondary market at a discount using its
reserves or resources from official sources.
Debt Service. The sum of loan repayments, interest payments, commitment fees and other
charges on foreign and domestic borrowings.
Debt Service Interest Payments. Payments treated as part of the expenditure program
representing cost of borrowed funds of the government.
Automatic appropriations for interest payments that the national government incurs from
foreign and domestic borrowings.
Debt Service Principal Payments. An off-budget item treated as such because it is merely
a return of borrowed funds; hence, it is reflected as financing account.
Payment to service the principal components of foreign or domestic borrowings. Debt
Service-Principal Payments is not included in the budget authorization process but is reflected
usually in the last page of the General Appropriations Act.
Debt-for-Assets Swap. The redemption by NG of its debt paper in exchange for an asset
being disposed of by the Asset Privatization Trust (APT) with the BTr.
Decentralization. The dispersion or distribution of functions and powers from a central
authority to regional and local authorities. It is synonymous to devolution. The concept of
decentralization is the improvement of governance and public service delivery. Its main goal
is to increase efficiency, both allocative efficiency and productive efficiency.
Deficit. Shortfall or deficiency of revenues over expenditures of the government.
Department. The primary subdivision of the Executive Branch responsible for the overall
management of a sector or a permanent national concern with nationwide or international
impact. A department is headed by a Secretary or an official with an equivalent position level.
For budget and accounting purposes, Constitutional Offices, the Judiciary and the
Legislature are categorized as department-level entities.
Department and agency and "department or agency. Refers to all departments, bureaus,
offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers,
institutes, state colleges and universities, and all other establishments and instrumentalities
of the National Government as defined in the preceding paragraph.
Details of the Budget. The document that contains the disaggregation of programs,
activities and projects of each agency.
Development Budget Coordinating Council (DBCC). An inter-agency committee tasked
primarily to formulate the National Governments fiscal program. It is responsible for the
annual and multi-year budget planning. It is responsible for policy and decision-making on
all fiscal matters.

The DBCC is composed of the Secretary of the Department of Budget and Management (DBM)
as Chairman, Director-General of the National Economic Development Authority (NEDA) as
co-chairman, the Executive Secretary, Secretary of the Department of Finance (DoF) and the
Governor of the Bangko Sentral ng Pilipinas as members.
The DBCC was created under Executive Order No. 232 dated May 14, 1970.
Devolution. The transference of the rights, powers, property or responsibility to another,
especially the surrender of powers to local authorities by a central government.
Department of Budget and Management (DBM). The executive department that is
tasked with the formulation and implementation of the National Budget with the goal of
attaining national socio-economic plans and objectives, and the efficient and sound
utilization of government funds and revenues to effectively achieve development objectives.
The DBM is composed of the Fiscal Planning Bureau, Budget Operations Group and the
Management and Support Services Group.
The DBM was created under Executive Order No. 21 dated April 25, 1936.
Direct NG Loans/Liabilities. Loans for obligations, either domestic or foreign, directly
contracted by the NG.
Disbursements. Settlement of government obligations and/or accounts payable by cash;
movement of cash from the BTr or from an authorized disbursing officer to the final recipient.
Disbursement is synonymous with liquidation/settlement/payment of an obligation.
Disbursement Authority. Document issued to an agency authorizing them to liquidate
obligations incurred.
Discretionary Expenditures. Refer to expenditure items that can be changed or
adjusted defending on government spending priorities, available fiscal space and
absorptive capacity of agencies.
This type of expenditure is usually annually
appropriated by Congress and enacted as the general appropriations law. By expense
class, expenditure items that fall under this category include maintenance expenses
ties up with the implementation of various programs/projects, tax expenditure fund and
regular subsidy to GOCCs. Capital expenditures for both infrastructure and non-infrastructure
programs/projects, including equity infusion to GOCCs are also considered under the
discretionary portion of the budget.
Dividends. GOCC declaration and remittance of their annual net earnings as cash, stock or
property dividends to the NG, at a rate prescribed by law.
Dubai Oil Price. A macroeconomic indicator that take into consideration changes in the
price of Dubai crude oil. Local refiners in the country use the Dubai crude to calculate their
retail prices. It is also used as a macroeconomic indicator as changes in the prices of crude
directly affects the local economy.

E
E-Government Fund. Refers to expenditure for the implementation of strategic information
and communications technology projects that enhance transparency, accountability and
efficiency in government.
Earmarked Revenues. These identified revenues are required by statute to be used for
designated activities, benefits, or purposes, and must be accounted for separately from
government's general revenues.
Equity.
National government investment in the authorized capital stock of
government-owned or controlled corporations.
Excise Tax. Tax, either specific and/or ad valorem, imposed on selected articles manufactured
or produced in the country for domestic sale or consumption or for any other disposition, and
on selected imports.
Existing Revenue Measures. Collections from present revenue structure under the National
Internal Revenue Code and Tariff Customs Code and non-tax sources (i.e., fees and charges and
other receipts).
Expected result. Service, product, or benefit that will accrue to the public, estimated in
terms of performance measures or targets.
Expenditure Program. The ceiling on the obligations that could be incurred by the government
in a given budget year. The said ceiling is supported by estimated financial resources.
Expenditure by Object.
Expense Class. Appropriations or expenditures categorized as Personal Services, Maintenance
and Other Operating Expenses, Capital Outlay, and recently Finance Expenses.
Exports. These are data on export shipments which essentially include all goods leaving the
country that are properly cleared through the BOC.
Export Taxes. Ad valorem levies on goods that are shipped out of the territorial jurisdiction
of the Philippines.
Extraordinary Income. Collections derived from the repayment of loans and advances made
by the government as well as from other non-recurring sources.
Extraordinary Receipts. Income which does not regularly accrue to the government,
the collection for which is indefinite or does not depend entirely on the authority of the
government.

F
Feasibility Studies Fund. Refers to expenditures for the conduct of feasibility studies
by an agency proposing a project other than Public-Private Partnership projects rather
than being financed by prospective bidders. The new fund is administered by the National
Economic and Development Authority.
Fees, Charges and Assessment. Amounts collected by government agencies for
administrative and regulatory purposes (such as passport fees, drivers licenses, court fees,
building permit fees, assessment fees etc.) as well as payments exacted in exchange for
goods and services.
Fiduciary Fund. A government fund where monies which have come into the possession of
the government officer as trustee, agency or administrator, or which have been received as
a guarantee for the fulfillment of some obligations are recorded and kept. Only the interest
earnings of the fund principal, which is deposited in an authorized government depository
bank, are utilized.
Financial Assistance to Metropolitan Manila Development Authority. Refers to national
government subsidy in the form of regular appropriations as provided in the GAA which
shall only be used to augment any deficiency in the consolidated funds of the MMDA to
cover valid and authorized expenditures.
Financial Restructuring. A mechanism to improve the GOCCs financial condition through
assumption by NG of the formers non-performing assets.
Financing. The means by which a government provides financial resources to cover a
budget deficit or allocates financial resources arising from a budget surplus.
Financing Program. Refers to projected revenues from both existing and new measures, the
planned borrowings to finance budgetary transactions and the payment of debt principal
falling due.
Financing Requirement. The portion of current and capital expenditures, plus lending
minus repayments in the case of government and distributions of equity income to
shareholders in the case of enterprises, that is not covered by the revenues and transfers
received and must consequently be met through changes in liabilities and in claims on
others, held for liquidity purposes in the case of government. It is equivalent to an overall
deficit/surplus but carries the opposite sign.
Fiscal Policy. The part of government policy which is concerned with raising of resources
through taxation and borrowing and deciding on the level and pattern of expenditures.
Fiscal Year. Refers to the period beginning with the first day of January and ending with the
thirty-first day of December of each calendar year.
Foreign-Assisted Projects. Government projects which are wholly or partly financed by
foreign loans and/or foreign grants.
Foreign-Assisted Projects Support Fund. A lump-sum budget provision for the expenditure
requirements of foreign assisted projects.
Foreign Exchange Rate. The rate at which a currency is exchanged for another currency in
the case of the Philippines, the peso to the US dollar.

Any change in the exchange rate assumption will correspondingly change the peso cost of
all expenditures paid in US dollars like foreign debt service both repayment and interests
the regular operating requirements of foreign-based government offices like embassies,
consulates, etc and other government contracts, which are to be settled using foreign currency.
The foreign exchange rate is part of the macroeconomic assumptions used in the preparation
of the national budget.
Forward Estimates (FEs). Projections or estimation of the future costs of existing policies.
It also serves as the validation instrument of determining the reasonableness of agency
proposals on existing programs/projects/activities.
Forward Obligational Authority. Certificate of commitment or authority issued by
the DBM to a NG agency certifying that funds shall be made available to cover the total
project cost. This will serve as an assurance that the loan proceeds and the peso counterpart
contribution are included in the long term capital program of the National Government.
Franchise Taxes. Taxes imposed on the special privilege or right conferred by the state on
an individual or corporation, through legislation, to exercise certain powers and privileges
such as the operation of public utilities.
Fund. Refers to an appropriation which is a legislative authorization to spend or an
allotment which is an authorization by the DBM to various departments and agencies to
obligate, or as actual cash available.

G
GAA-as-Release Document. A new policy regime that seeks to de-clog budget
execution process. Budgets or appropriations except for those included in the Negative List - are
already considered released to agencies as allotments when the GAA takes effect.
General Administration and Support. Activities and expenditure that deals with the provision
of overall administrative management and operational support to entire agency operations.
General Appropriations Act. The legislative authorization that identifies new appropriations
in terms of specific amounts for salaries, wages and other personnel benefits; Maintenance and
Other Operating Expenses (MOOE), Financial Expenses (FEx) and Capital Outlays (CO) for the
implementation of programs, projects and activities of all departments, bureaus and offices of
government for a given year.
It is the detailed and comprehensive menu of programs, activities and projects (PAPs) that
will be undertaken by the national government in any given year. The GAA defines by how
much the programs are funded, through what agencies are these implemented, and in what
manner are the funds released.
The GAA is a financial plan to pursue priority PAPs of the government in line with its economic
growth and human development thrusts.
General Fund. Fund which is available for any purpose to which the legislative body may
choose to apply, and is composed of all receipts or revenues which are not otherwise accruing
to other funds.
General Provisions. Restrictions, regulations and limitations on the use of funds in the
General Appropriations Act that applies to all departments and agencies. These usually
contain major sections such as Receipts and Income, Expenditures, Personnel Amelioration,
Release and Use of Funds and Administrative Procedures.
Government. The National Government, including the Executive, the Legislative and the
Judicial Branches, and the Constitutional Commissions.
Government-Owned or Controlled Corporation. A stock or a non-stock corporation,
whether performing government or proprietary functions, which is directly chartered by
special law or, if organized under the general corporation law, is owned or controlled by the
government directly or indirectly, through a parent corporation, to the extent of at least a
majority of its outstanding capital stock of the outstanding voting capital stock.
Government Securities. Evidences of indebtedness of the Republic of the Philippines or its
instrumentalities, government-owned and/or controlled corporations, or the Central Bank
and must be freely negotiable and regularly serviced.
Government Servicing Banks. Financial institutions authorized, upon accreditation by
the Monetary Board, to accept government deposits and perform banking services on
behalf of government agencies. Presently, only three government financial institutions have
been designated to be servicing banks of the MDS, namely: Land Bank of the Philippines,
Development Bank of the Philippines, and Philippine Veterans Bank.
Grace Period. Period commencing from the time a loan agreement becomes effective to
the time when the initial principal repayment becomes due.
Grants. All non-repayable transfer received from other levels of government, or from
private individuals, or institutions including reparations and gifts given for particular
projects or programs, or for general budget support.

Grassroots Participatory Budgeting Process (GPBP). Formerly known as Bottom-up

Budgeting, is a budget reform measure aimed at giving communities a direct voice and vote
in the budget process. Communities and local civil society organizations are engaged in the
crafting of local poverty reduction plans.
A consultative process that provides an avenue for local basic sector organizations (BSOs),
civil society organizations (CSOs), and other stakeholders to work hand in hand with their
city or municipal governments in the crafting of the Local Poverty Reduction Plan (LRPAP).
Projects identified under the plan are included in the National Budget.
Gross Domestic Product (GDP). The measure of the total output within the geographic
boundaries of the country, regardless of the nationality of the entities producing the output.
The measure of the market value of the output of final goods and services produced by a
national economy during a specific period of time, usually a year.
The measure of the total amount of goods and services produced within a countrys
geographic borders.
The GDP is used as a major indicator in determining the macroeconomic targets and
assumptions by the Development Budget Coordinating Committee in preparing the
national budget.
Gross National Income (GNI). Consists of the total value of goods and services produced
within a country (i.e. GDP) together with its income receive from other countries (notably
interests and dividends), less similar repayments made to other countries (net income from
international assets and gross exports less gross imports and indirect business taxes). NGI
is equal to GDP less primary incomes payable to non-resident units plus primary incomes
receivable from non-resident units. In other words, GNI is equal to GDP less taxes (less
subsidies) on production and imports, compensation of employees and property income
payable to the rest of the world plus the corresponding items receivable from the rest of the
world.
Gross National Product (GNP). The measure of the total market value of all final goods and
services produced in an economy in a given year. It takes into account everything produced
by Philippine nationals or companies within or without the country and includes remittances
by Overseas Filipino Workers (OFWs).
The GNP is used as a major indicator in determining the macroeconomic targets and
assumptions by the Development Budget Coordinating Committee (DBCC) in the
preparation of the national budget.
Guaranteed Obligations. Debt obligations for which a juridical entity assumes secondary
liability as guarantor. If the primary obligor fails to pay, the guarantor becomes liable for the
amount due.

I
Informing power. The power and responsibility of the president to render his or her
accomplishment report and to outline priority programs, plans and agenda of the
government. The information he or she gives serves as the basis for the legislative
enactment of laws including the national budget.
Implementing Agency. A unit of government that implements development projects. An
implementing agency can be the Office of the Secretary of a department, an agency attached
to a department, a line bureau or a government owned or controlled corporation.
Imports. These are data on import arrivals which essentially include all goods entering any
of the seaports or airports of entry of the Philippines properly cleared through customs or
remaining under customs control.
Import Duties and Taxes. Taxes and levies, generally in ad valorem form, imposed on
goods that enter the country, for the purpose of protecting locally manufactured goods of
similar nature, or for the purpose of generating revenues under the Tariff and Custom Code.
Includes specific taxes on imported goods, advance sales tax and compensating tax on
imported goods.
Income from Public Enterprises and Investments. Receipts paid to the government from
all properties and investments income such as dividends, interest, rent and royalties.
Indirect Tax. Tax levied on the sale of, use of or expenditure on goods and services, such
as excise tax, sales tax, VAT, import duties, export tax, documentary and stamp taxes, forest
charges, and others.
Inflation. Refers to the persistent upward movement in the general price level resulting in
the diminishing purchasing power of a given nominal sum of money. The inflation rate is the
annual rate of change in the general price level often measured by the Consumer Price Index.
Infrastructure Outlays. Expenditures for roads, bridges, airports, and other similar capital
goods which have productive benefits that extend the fiscal year.
Internal Revenue Allotment. The account created under PD 144, as amended, representing
the portion of total national government revenues which accrue to the local governments.
Includes the local government share in the specific tax on oil products authorized by PD 436,
as amended. This share has been revised under the Local Government Code of 1991 and is
now termed as internal revenue allotment.
International Commitments Fund. Refers to expenditure support to government
commitments to international organizations, such as membership contributions and the
hosting of international conferences. All requests are submitted to the Department of
Foreign Affairs and approved by the President.
Interest. Charges imposed as a consequence in the use of money. It is deemed synonymous
with discount when applied to government securities.
In-Year Reports. Periodic reports that provide a snapshot of the budget implementation
during the budget year, as defined by the Open Budget Index. It includes the following:
Agency Budget Accountability Reports are submitted by agencies to report on how their
funds are spent alongside their accomplishments. Agencies must publish these in their
respective website via their Transparency Seals.

Budget Reports by the DBM, published on its website, and includes Status of Allotment
Releases, Statement of Allotments, Obligations and Balances, Reports on the Utilization
of Cash Allocation, National Government Fiscal Reports published by the Department of
Finance and the DBM on a regular basis to report on the status of governments revenue
collection, expenditures, deficits, and debt including, Reports by the DoF that include
monthly Cash Operations Report (BTr), reports on collections (BIR and BoC) and Outstanding
Debt (BTr), and Assessment of Disbursements published monthly by the DBM providing a
more detailed reporting on governments disbursement performance.
Itemized Positions. Approved positions in the regular personnel plantilla of all agencies of
the national government.

J
Judiciary Development Fund. Created by Presidential Decree No. 1949; a fund sourced
from legal fees to augment the allowances of the members and personnel of the Judiciary
and to finance the acquisition, maintenance, and repair of office equipment and facilities.

K
Key Result Area. The part in the Strategic Objectives in the GAA that states the specific and
concise objectives of the agency or department.
Key Positions. Refers to executive, managerial, chief of division or equivalent position in a
department or agency.

L
Line Item Veto. The power of the president or other elected executive to reject individual
provisions of a bill.
Loan Availments/Proceeds. Amount drawn, in cash or in kind, against existing or new loan
commitments.
Locally-Funded Projects. Projects financed out of revenue collections and domestic
borrowings.
London Interbank Offered Rate (LIBOR). This is the rate offered to prime borrowers in the
internal capital market based in London, which serves as the basis for most foreign interest
rate quotations.

M
Maintenance and Other Operating Expenses (MOOE). Outlays for the purchase of
goods and services (e.g. supplies, materials, transportation and travel, utilities, repairs,
professional services, etc) in order to conduct normal government operations and to
implement its programs.
Major Final Outputs (MFOs). Goods and services that a department or agency are mandated
to deliver to external clients through the implementation of programs, activities and projects.
It is also the quantification of the targets and key result areas and is the basis for the analyses of
the performance of each agency and department.
Mandate. The part in the section of the Strategic Objectives that describes the legal character,
mandate and functions of a particular agency or department.
Medium Term Philippine Development Program (MTPDP). The countrys economic
blueprint for the attainment of the economic growth and development goals and targets.
Also called the Philippine Development Plan, the MTPDP usually encompasses a six-year
time frame.
Medium Term Expenditure Framework (MTEF). A planning budgeting framework of the
government which provides a medium term three year perspective to decision making
process during budget preparation.
Mid-year Report. A new report by the Development Budget Coordination Committee
(DBCC) on the macroeconomic environment and revenue and expenditure performance
midway into the fiscal year, as well as the outlook for the remainder of the year.

Miscellaneous Income. Non-tax revenues not elsewhere classified such as proceeds from
the sale of goods or confiscated merchandise, inventory adjustments, and waste materials.
Miscellaneous Personal Services (MPBF). Appropriations for the Payment of Other
Benefits. This includes payments for deficiencies in authorized salaries, bonuses,
allowances, associated premiums and other similar benefits for National Government
employees, including Magna Carta Benefits of Public Health Workers, Scientists, Engineers
and Researchers in government.
Mission. The part in the Strategic Objectives in the GAA that states the end goals of the
agency or department.
Modified Disbursement Scheme (MDS). A procedure whereby disbursements by NG
agencies chargeable against the account of the Treasurer of the Philippines are effected
through GSBs.
Monetary Policy. The part of economic policy which regulates the level of money or liquidity
in the economy to achieve desired policy objectives, such as inflation control, improvement of
the BOP or growth of the economy.
Monthly Cash Program (MCP). The estimated monthly disbursement requirements of the
operating units (OUs) of departments/agencies.
Motor Vehicle Users Charge (MVUC). An earmarked revenue whereby fixed percentages
are automatically appropriated to the Office of the Secretary of the Department of Public
Works and Highways and the Department of Transportation and Communications.
Multi-Year Obligational Authority - (MYOA). An authority issued by the DBM to enable
an agency to enter into a multi-year contract whether for locally funded projects (LFPs) or
foreign assisted projects. (FAPs).

N
National Disaster Risk Reduction Management Fund (Calamity Fund). Refers to relief,
reconstruction and other works or services related to natural calamities, epidemics, crises
resulting from armed conflicts and other catastrophes. Releases may only be made upon
the recommendation of the National Disaster Risk Reduction and Management Council
(NDRRMC) and the approval of the president.
National Expenditure Program (NEP). The document that contains the Propose Budget in
the form of proposed legislation; contains targeted outcomes and outputs with corresponding
indicators alongside the financial plan.
This volume of the President's Budget is submitted to assist Congress in the review and
deliberation of the proposed national budget for the legislation of the annual
appropriations measures for the next fiscal year. It contains the details of the government's
proposed program and is presented into four (4) parts, namely: Part I - National Government
Budget; Part II - Budgets of the three (3) Energy Corporations; Part III - General Provisions;
and, Part IV - Detailed Annexes.
National Government budget. Refers to the totality of the budgets of various
departments of the national government including support to Local Government Units
(LGUs) and Government-Owned and/or Controlled Corporations (GOCCs). It is what the
national government plans to spend for its programs and projects, and the sources of what
it to projects as funds, either from revenues or from borrowings with which to finance such
expenditures.
It also includes income, expenditures, sources of borrowings of the National Government
that are used to achieve national objectives, strategies and programs.
Negotiated Checks. Modified Disbursement Scheme or MDS checks already paid/encashed
by government servicing banks.
Net Income (Loss). The difference between revenues and expenses, reflecting the results
of operations of corporations for a given period. A positive balance indicates a net income
while a negative balance, a net loss.
Net Lending. Advances by the national government for the servicing of government
guaranteed corporate debt during the year, net of repayments on such advances. This
includes loans outlays or proceeds from program loans relent to government corporations.
In short, these are payments for debts of the private sector.
New General Appropriations. Annual appropriations for incurring obligations during a
specified budget year, as listed in the General Appropriations Act (GAA).
Non-Budgetary Accounts. Trust liabilities, securities unloaded or purchased, sinking fund,
and other accounts not included in the NG budget.
Non-Cash Availment Authority. Authority granted by DBM to government agency to
account for the cash equivalent of loan proceeds availed of through suppliers credit/
constructive cash.
Non-Fiscal Transaction. Items that represent expenditures that are non-fiscal in character
but have been carried in the expenditure program of the national government over the last
four years. These include debt payments on assumed liabilities, interest payment on CB open
market support transactions, the debt reduction program, and the subsidy for the Oil Price
Stabilization Fund.

Non-NCA Expenditures. Budgetary accounts which are paid without requiring the issuance
of notices of cash allocation during the budget year in consideration.
Non-Tax Revenues. Revenues collected from sources other than compulsory tax levies.
Includes those collected in exchange for direct services rendered by government agencies
to the public, or those arising from the government's regulatory and investment activities.
These includes Bureau of Treasury's income derived from investment activities particularly
on interests on bond holdings, gain on foreign exchange, interests on deposits and other
proprietary government ventures.
Non-tax revenues also include inputs from foreign grants and income derived from privatization
of government utilities.
Examples of collecting agencies for non-tax revenues are Presidents Offices, CICT,
National Computer Center, National Commission on Indigenous Peoples, Agricultural
Training Institute, others.
Notice of Cash Allocation (NCA). Cash authority issued quarterly by the DBM to central,
regional and provincial offices and operating units to cover the cash requirements of the
agencies.

O
Obligations. Liabilities legally incurred and committed to be paid for by the government
either immediately or in the future.
Refers to an amount committed to be paid by the Government for any lawful act made by an
authorized officer for and in behalf of the government.
Obligation Budget. Programmed amount out of total appropriations to enable the national
government to contract delivery of goods and services in a given fiscal period.
Off-Budget Items. Any expenditure item which is not part of the National Expenditure
Program. Principal repayments are considered off-budget items.
Off-Budget Funds. Refer to receipts for expenditure items that are not part of the National
Expenditure Program, and which are authorized for depositing in governmental financial
institutions. These are categorized into: Retained Income/Receipts and Revolving Funds.
One-Fund Concept. The policy enunciated through Presidential Decree No. 1177 which
requires that all income and revenues must accrue to the General Fund and thus can be
freely allocated to fund programs and projects of the government as prioritized.
Open Market Operations. The most important instrument of a central bank or monetary
authority for controlling the supply of money and credit in the economy through the
purchase or sale of government securities in the open market.
Open Market Support. The assistance provided by the national government to the Central
Bank through the flotation of national government debt instruments, the proceeds of which
are deposited with the Central Bank. The timing and magnitude of the flotations are used to
control the liquidity of the financial system.
Operating and Service Income. Nontax revenues generated in the exercise of the
administrative and regulatory functions by the national government. Includes hospital
income, tuition fees of government schools and admission fees to government museums
and parks. Also includes revenues realized by government agencies from their business
undertakings called for by the nature of their functions, and those income generated by
social security agencies in the form of premiums earned from life and non-life insurance.
Operating Expenditures. Costs incurred by Government in the exercise of its administrative,
regulatory, or service functions.
Operating Program. The portion of the expenditure program for a given fiscal year used
for the delivery of goods and services. This includes Personal Services (PS), Maintenance and
Other Operating Expenses (MOOE), and Capital Outlays (CO).
Operating Revenues. Receipts from the conduct of regular business operations.
Operating Units. Organization entities charged with carrying out specific substantive
functions or with directly implementing programs/projects of a department or agency, such
as line bureaus and field units.
For budget and accounting purposes, these are organizational units under a Department or
an Agency which may be:
1. Directly receiving budgets from DBM, including SUCs
2. Recipients of fund transfers from higher level OUs, and/or
3. Authorized to collect revenues.

Operations. Consist of programs and corresponding expenditures which relate to the main
purpose for which an agency has been created. It involves direct production of goods or
delivery of services or direct engagement in regulations.
Organizational Outcome. The part in the Strategic Objectives in the GAA that describes the
expected or targeted performance of a department or agency.
Organizational Performance Indicator Framework (OPIF). An approach to expenditure
management that directs resources towards results or major final outputs and measures
agency performance by key quality and quantity indicators.
OPIF Logical Framework. A planning tool which provides a graphical presentation of the
linkage among societal and sectoral goals, organizational outcomes, major final outputs, and
the programs, activities, and projects undertaken to produce or deliver goods and services.
Other Executive Offices (OEOs). Agencies, GOCCs, offices that are directly under the Office
of the President that were created by law or executive order as special bodies to carry out the
mandate of the executive department and implement a specific function.
Outstanding Checks / Check Floats. Checks issued by agencies (in the current or previous
year) which are not yet presented by the payee to the bank for payment.
Outstanding Debt. Unpaid Obligations

P
Paid-in Capital. The amount paid for the subscription of capital stock.
Paris Club. The major forum within which debtor countries negotiate the restructuring of
debts owed to foreign government or their export agencies including the U.S., Great Britain,
Japan, and European countries.
Performance Indicator. Characteristic of performance such as quality, quantity, timeliness
and cost that measures how efficiently a department or agency delivers its Major Final Outputs
(MFOs).
Pension and Gratuity Fund. Refers to payment of pensions of police, military and other
uniformed personnel that are fully subsidized by the national government; retirement
and terminal leave benefits; separation benefits and incentives; and monetization of leave
credits.
Performance Indicator. A predetermined measure of the results of an activity against a
standard of performance required to achieve a set of policy objectives within a given period.
Performance Target. A predetermined level of quantity, quality, timeliness and cost of
outputs.
Personal Services. Also called Personnel Services. Provisions for the payment of
salaries, wages and other compensation (e.g., merit, salary increase, cost-of-living-allowances,
honoraria and commutable allowances) of permanent, temporary, contractual, and casual
employees of the government.
Peso-Denominated Transactions. Involves cash obligations and receipts expressed in the
local currency.
Philippine Inter Bank Offered Rate (PHIBOR). An interest rate reference that is expected
to replace the Treasury Bill yield as the basis for the lending and pricing commercial papers.
Planning-programming-budgeting system (PPBS). A concept that stresses the
importance of establishing a strong linkage between planning and budgeting. It
emanates from the policy of the government to formulate and implement a national
budget taht is an instrument of national development, reflective of national objectives,
strategies and plans. Under the PPBS concept, the budget is anchored on the degree by
which the accomplishment of economic plans and the attainment of target contained in
the Medium-Term Philippine Development Plan (MTPDP) and the Medium-Term Public
Investment Program (MTPIP) are supported.
Presidents Budget Message. The budget document where the President explains to
Congress the rationale behind the proposed Budget.
Presidents Veto Message. The budget document where the President signals his approval
of the general appropriations act and his disapproval, if any, of line items contained therein.
Principal Payment. The sum of the first component of debt amortization, i.e., principal
repayments for loans payable in regular installments and actual releases out of the sinking
fund for the eventual payment of debt. These are the cash outlays from the BTr in payment of
principal amounts of foreign and domestic borrowings.
Priority Development Assistance Fund. Allocation for projects and programs nominated
by legislators for the benefit of their constituents. Also known as pork barrel, this fund was
declared unconstitutional by the Supreme Court.

Productive Efficiency. Efficiency achieved through increased accountability of local

governments to citizes, fewer levels of bureaucracy and better knowledge of local costs.
Program. A homogeneous group of activities necessary for the performance of a major
purpose for which a government agency is established, for the basic maintenance of the
agencys administrative operations or for the provisions of staff support to the agencys
administrative operations or for the provisions of staff support to the agencys line functions.
Refers to the functions and activities necessary for the performance of a major purpose for
which a government agency is established.
Programs are basically composed of three line items: General Administration and Support,
Support to Operations and Operations.
Program Loan. A multi-purpose foreign loan not used to finance a specific project but is
conditioned on basic changes in economic, monetary or fiscal policies, among others.
Program/Project Assessment. A review of accomplishments against target objectives.
Programmed Appropriations. Appropriations supported by corresponding resources, that
is, they already have definite funding sources and are readily implementable.
Total appropriations available for release during the year.
Project Cost. The total amount necessary to implement and complete a project over a given
period of time.
Project Loan. A foreign loan obtained to finance a specific project.
Projection. Data which approximates future event, derived from statistics/econometric tool.
Project(s). Refers to a component of a program covering a homogenous group of activities
that results in the accomplishment of an identifiable output.
Special agency undertakings which are to be carried out within a definite time frame and
which are intended to result some pre-determined measure of goods and services.
Projects are classified into locally-funded projects and foreign-assisted projects.
Projects are deemed terminated with the completion of the project or the lack of feasibility
or probability of attaining said objectives.
Property Taxes or Taxes on Property. Taxes on the ownership of wealth or immovable
properties levied at a regular intervals and on transfer of real or personal properties.
Public Debt. Includes the total indebtedness of the National Government, local
government and government corporations or financial institutions from industries,
corporations or financial institutions, whether private or government, foreign or domestic,
which are fully supported and guaranteed by NG.
Public Sector Borrowing Requirement (PSBR). The deficit of the national government
and the 14 monitored government corporations less the budgetary assistance to the
monitored corporations in the form of equity contributions and net lending. This is one of the
performance criteria being monitored by the International Monetary Fund.

R
Receipts. The sum of revenues and gross borrowings for a given period.
Receipts Automatically Appropriated. Receipts from grants, donations, insurance
proceeds, and other sources which by law may be immediately used by the agency without
undergoing the usual legislative process.
Regional Development Council (RDC). It is the primary institution that coordinates and
sets the direction of the regions economic and social development effort It serves as a forum
to relate and integrate local efforts with national development activities. It serves as NEDA
Boards counterpart at the regional level.
The RDC was established on December 31, 1972 based on Letter of Instruction (LOI) no. 22 as
part of the 1972 Integrated Reorganization Plan.
Regional Office. An organizational subdivision, headed by a Regional Director, that is
responsible for the performance of an entitys functions within a region. In effect, an RO is
a miniature department or agency and is responsible for all activities in the area under its
jurisdiction.
Regular Budget. The line item budgets of thirty-four line departments and agencies
covering all the line agencies of the Executive, Judiciary, Legislative branches of government
including the independent commissions.
Refers to the current expenditures and the capital outlay for the operation and implementation
of programs and projects of various government departments and agencies
Relent Loans. Loans directly contracted by the NG, the proceeds of which are relent to
GOCCs, GFIs, LGUs, or the private sector.
Reserve Control Account.
Resources. In budgeting, a term frequently used to refer to revenues, gross borrowings, and
free or unencumbered cash balances.
Retained Income/Funds. Collections that are authorized by law to used directly by agencies
for their operation or specific purposes. These include but are not limited to receipts from:
State Universities and Colleges (SUCs) tuition and matriculation fees and other internally
generated receipts;
Department of Health hospital income such as hospital fees; medical, dental and
laboratory fees; rent income from the use of hospital equipment and facilities; proceeds
from sale of hospital therapeutic products, prosthetic appliances and other medical devices;
diagnostic examination fees; donations in cash from individuals or non-governmental
organizations satisfied with hospital services.
Retirement and Life Insurance Premiums. The share of the national government in
the premium payments to Government Service Insurance System (GSIS), for the life
insurance and retirement benefit fund of government employees as well as pensions of
former presidents and widows of former presidents as mandated by R.A. 2087 and R.A. No.
5059.
Revenue. A cash inflow which does not increase the liability of the government.

Revenue Program. Target collections by tax and non-tax accounts of collecting agencies.
Revolving Fund. Receipts derived from business-type activities of departments/agencies as
authorized by law, and which are deposited in an authorized government depository bank.
These funds shall be self-liquidating. All obligations and expenditures incurred because of
these business-type activities shal be charged against the Revolving Fund.

S
Salary Standardization Scheme. Application of the principle of equal pay for
substantially equal work which effectively abolished existing pay differentials among
government agencies and standardize compensation of all comparable positions.
Savings. Refer to portions or balances of any programmed appropriation in this Act free
from any obligation or encumbrance which are: (i) still available after the completion
or final discontinuance or abandonment of the work, activity or purpose for which the
appropriation is authorized; (ii) from appropriation balances arising from unpaid
compensation and related costs pertaining to vacant positions and leaves of absence
without pay; and (iii) from appropriation balances realized from the implementation of
measures resulting in improved systems and efficiencies and thus enabled agencies to meet
and deliver the required or planned targets, programs and services approved in the General
Appropriations Act at a lesser cost.
School Building Program (SBP). Also known as the DepEd School Building Program, is an
item under the Special Purpose Funds (SPF).
Sector Outcome. The part in the Strategic Objectives in the GAA that expresses quantifiable
objectives of an agency or department for the fiscal year.
Selective Taxes on Services. Taxes imposed on persons and entities engage in
providing services to the customers such as millers tax imposed on proprietors or
operators of rope factories, coconut oil mills and desiccated coconut factories; the
contractors tax imposed on contractors, proprietors of dockyards, general
construction and the like; the percentage tax on hotels, motels, restaurants, caterers
and others; percentage tax on common carriers whether by air, land or water services
and keepers of garages; taxes on stock, real state commercial, customs and immigration
brokers or cinematographic film owners, lessors or distributors; and taxes on dealers of
securities and lending investors. Also includes taxes imposed on gross receipts by all banks
and financial institutions; taxes imposed on premiums received by insurance companies;
and amusement taxes.
Senate Committee on Finance. The Committee of the Senate that has jurisdiction over All
matters relating to funds for expenditures of the National Government and for the payment
of public indebtedness, auditing of accounts and expenditures of the National Government,
claims against the government, inter-governmental revenue sharing, and in general all
matters relating to public expenditures.
Simplified Fund Release System (SFRS).
A standardized system of releasing
allotments based on a predetermined categorization or disaggregation of agency budgets.
Under this system, the category of the expenditure item determines the timing and the
magnitude of the release of agency allotments. Releases, in turn, are made in accordance
with a prioritization scheme consistent with governments overall development policy.
Sinking Fund. A fund that is established for the purpose of repaying a debt with a lumpy
maturity schedule. Payment to a sinking fund are generally vested in safe securities until the
debt reaches maturity. By this time, the cumulative payments to the sinking fund and its
interest earnings should match the amount of principal to be paid.
Special Accounts in the General Fund (SAGF). A fund whereby proceeds of specific
revenue measures and grants earmarked by law for specific priority projects are recorded.
These sources are automatically appropriated.

Special Allotment Release Order (SARO). A specific authority issued to identified

agencies to incur obligations not exceeding a given amount during a specified period for the
purpose indicated. It shall cover expenditures the release of which is subject to
compliance with specific laws or regulations, or is subject to separate approval or clearance
by competent authority.
Special Allowance for the Judiciary. Created by Law (RA 9227), granting additional
compensation in the form of special allowances for justices, judges and all other positions
in the judiciary with the equivalent rank of justices of the court of appeals and judges of the
regional trial court equivalent to 100 percent of the basic monthly specified for their
respective salary grades; sourced from from legal fees.
Special Drawing Rights (SDR). Unconditional reserve assets that are created by the
International Monetary Fund to supplement existing reserve assets SDRs represent asset
that have no corresponding liability.
Special Provisions. The part of the GAA that pertains to the regulations, restrictions and
limitations on the use of funds to particular appropriations of each department and agency.
Special Purpose Funds. Appropriations in the GAA provided to cover expenditures for
specific purposes for which recipient agencies/departments have not yet been
identified during budget preparation. These shall be available for allocation to agencies/
departments in addition to built-in appropriations, during budget execution, pursuant
to special conditions per SPF. Among such SPFs are Calamity Fund, Contingent Fund,
E-Government Fund, International Commitments Fund, Priority Development Fund, Pension
and Gratuity Fund.
Unprogrammed SPFs, e.g. BSGC, FAPS, are provided to cover deficiencies, i.e., requirements
cannot be fully accommodated, vis-a-vis provisions in the agency specific budgets, subject
to availability of excess/unexpected inflow of revenues / financing sources.
Budget items that are non-permanent in nature, an appropriations designed to augment the
Regular Budget of selected departments and agencies, and subject to the approval of the
president.
Lump-sums included in the GAA which are not within the approved appropriations of Departments/Agencies/Lower Level Operating Units, and which are available for allocation to
any Department/Agency/Lower Level Operating Unit or Local Government Unit for a specific
purpose, as may be duly approved in accordance with special provisions on the use of these
funds.
Items in the National Budget allocated for specific purposes. They are usually lump sums in
nature, as the recipient departments only identify the specific programs and projects during
budget execution. They are released to agencies after conditions have been complied with.
Staff Bureau. A principal subdivision of a department which primarily performs policy,
program development, and advisory functions.
Staffing Summary. The document that contains a summary of the staffing complement
of each agency, including the number of positions and amounts allocated for these. The
Staffing Summary also includes Key Positions, Technical Positions, Support to Technical
Positions and Administrative Positions with corresponding salary grades.
Strategic Objectives. The set of information in the GAA that informs on the purpose of the
funds, the outputs in terms of goods and services to be produced, the intended outcomes
that these goods and services will achieve and the cost of these programs and projects.

Strategic Objectives are presented in the Mandate, Vision, Key Result Areas, Sector Outcome,
and Organizational Outcome that precede the appropriations for each department and
agency. The inclusion of Strategic Objectives in the form and structure of the GAA is one of
the changes in the national budget.
Supplemental Appropriations. All appropriation proposal shall be included and
considered in the budget preparation process. After the President shall have submitted
the Budget, no supplemental appropriation measure supported from existing revenue
measures shall be passed by the National assembly. However, supplemental or deficiency
appropriations involving the creation of new offices, programs or activities may be enacted
if accompanied and supported by new revenue sources.
Support to Operations. Consists of programs and corresponding expenditures which
provide staff, technical and/or substantial support to operations, but do not produce goods
or deliver services or directly engage in regulation.
Support to Technical Positions. Refer to those position which provide staff or technical
support functions to key and technical positions but do not have frontline service functions.
Subsidy. A grant or financial aid, usually by a government body, to some other persons or
institution for general purposes. When applied to GOCCs, it may also refer to amounts used
to cover operational expenses not supported by corporate revenues or to cover corporate
deficits and losses.
Surplus. Excess of revenues over expenditures.
Surplus Budgeting. Budget policy that encourages economic growth. The less the government borrow from the public, the lesser the pressure on interest and inflation rates and the
more funds are made available in the financial market. Such funds may be used by businessmen to build factories, hire workers, buy equipment and open more employment opportunities. By keeping more funds in the hands of the private sector rather than competing for
credit, the government helps make financing available for families who want to own homes
or support their childrens education.
The government also needs to generate a budget surplus to repay the huge debt it has accumulated over the years. The reduction of the national debt will correspondingly lessen
governments requirement for interest and principal payments.

T
Target. Goal or specific objective of a program.
Tax Expenditure Subsidy/Fund. Subsidy given to national government agencies,
government corporations and local government units in lieu of payment of taxes and
custom duties. This fund does not involve actual cash disbursement.
Tax on Property. Tax imposed on the ownership of wealth or immovable properties and on
the transfer of real or personal properties, both tangible and intangible.
Tax Remittance Advice (TRA). Document which agencies issue/file with the BIR to report
and record remittances (constructive payment) of all taxes withheld from transactions. This
serves as basis for BIR and BTr to record as income, the tax collection and deposit in their
books of accounts.
Tax Revenues. Tax revenues are the income that are gained by government through the
exercise of the sovereign power taxation.
Compulsory charges or levies imposed by government on goods, services, transactions,
individuals, entities, and others, arising from the sovereign power of state. Examples of
the collecting agencies for tax revenues are DENR, Bureau Of Customs, Bureau of Internal
Revenue, Bureau of Fire Protection, Bureau of Immigration, Land Transportation Office and
Other Executive Offices (OEOs).
Tax on Domestic Goods and Services. Tax levied on the domestic production, sale or
transfer, leasing, use or delivery of goods, and rendering of services.
Tax on Income and Profits. Tax imposed on all taxable income earned/received by a
taxpayer whether an individual, partnership, or corporation during a particular period of
time, usually one year.
Taxes on International Trade and Transactions. The sum of import and customs duties,
and other international trade-related tax collections of the national government.
Taxes on the Use of Goods or Property or Permission to Perform Activities. Taxes paid
for the privilege of engaging in business or pursuing an occupation, calling, or profession.
Includes franchise taxes, fixed annual business taxes, fixed taxes payable by manufacturers,
producers or importers engaged in business subject to percentage taxes, and miscellaneous
fixed taxes payable by brewers, distillers of spirits, manufacturers, importers, and exporters
of cigars and cigarettes.
Taxes on Income and Profits. Taxes imposed on all taxable income earned or received by a
taxpayer, whether individual, partnership, or corporation, during a particular period of time,
usually lasting one year.
Technical Positions. Refer to position directly performing the substantive and/or front-line
services or functions of the agency prescribed by its mandate.
T.O.P. Special Accounts. Deposit of the Treasurer of the Philippines (T.O.P.) with Authorized
Government Depository Banks (AGDBs) accruing from proceeds of foreign loans or grants
earmarked for special projects.
Total Resource Budget. A concept which requires the preparation of the national
government within the framework of the total impact of all government entities
on the national economy Under this concept, the National Government budget is

considered as only one component of the entire public resources. Government-Owned and/or
Controlled Corporations (GOCCs) are also considered as substantial contributors to total
public resources. GOCCs and LGUs are therefore required to prepare their budget
consistent in form and timing with that of the National Government to facilitate
comprehensive evaluation of the overall budget. In total resource budgeting, the energies
and capabilities of all public entities are harnessed in drawing up the optimal package of
goods and services that can be sustained by available resources.
Trade Balance. The difference between the values of export shipments and import arrivals.
There is a trade surplus if export shipments exceeded import arrivals and a trade deficit if the
latter exceeded the former.
Transfer Taxes. Taxes imposed on property transfers through sale, donation or inheritance.
Treasury Bills. Short-term debt instruments issued by the NG.
Treasury Bonds/Notes. Certificates of indebtedness issued by the National Government,
the maturity of which extends beyond one year.
Treasury Bills. The direct and unconditional short-term obligations of the National
Government to finance public expenditures. These are issued by the Bureau of Treasury can
carry a maturity of a year or less.
The 91-day Treasury Bill rate refers to the interest rates on the Treasury Bills maturing within
91 days issued by the National Government to general funds for general purposes including
payment of outstanding obligations of the government. It serves as a bellweather indicating
the rate of interest in the market as well as important macroeconomic indicator in preparing
the national budget.
Trust Fund. Fund which accounts for the receipts by any agency of government or by
a public officer acting as trustee, agent, or administrator for the fulfillment of some
obligations.
Trust Liabilities. An accounts used to record collections, income, or receipts of agencies
held in trust or guarantee for another agency and for a specific purpose.
Trust Receipts. Receipts that are officially in the possession of government agencies or a
public officer as trustee, agent, or administrator, or which have been received for the fulfilment of a particular obligation. These receipts may be classified as:
Inter-Agency Transferred Funds (IATF), which are receipts or fund transfers from any government-agency or Government Owned and/or Controlled Corporations (GOCC) to another
agency, and which are deposited in the National Treasury to facilitate project implementation.
Receipts deposited with the National Treasury other than IATF, which are receipts from other
sources including private persons or foreign institutions which are deposited with the
National Treasury, pursuant to E.O. No. 338, for the fulfillment of some obligations; and,
Receipts deposited with Authorized Government Depository Bank (AGDB), which are receipts from other sources that should be deposited in the AGDB for the fulfillment of some
obligations.

U
Unobligated Allotment. An allotment released by the Department of Budget and
Management through a Special Allotment Release Order but have not been awarded to a
supplier and have reached the end of their validity period.
Unprogrammed Appropriations.
corresponding resources.

Appropriations that are not yet supported by

Unreleased Appropriation. An appropriation that have not been released by the

Department of Budget and Management.
Unprogrammed Appropriations. Appropriations which provide standby authority to incur
additional agency obligations for priority programs or projects when revenue collections
exceed targets, and when additional foreign funds are generated.
Standby appropriations for priority programs or projects of the government. The
utilization of Unprogrammed Funs may be approved if any of the following conditions are
met: revenue collections for the year exceed targets, new revenues not included in the
original revenue targets are successfully generated, or foreign loan proceeds are generated
for newly approved projects covered by perfected loan agreements.
Budget appropriations that are not yet supported by corresponding resources in the GAA.
Unused Appropriations. Appropriations that have not been released by the DBM to a
department or agency and allotments released to the department or agency through a
Special Allotment Release Order but have not been awarded to a supplier and have
reached the end of their validity period. It is composed of Unreleased Appropriations and
Unobligated Allotments.

V
Veto. A constitutional right to reject a decision or proposal made by a law-making body
The refusal of the President to agree to a bill that has been approved by the legislature,
thereby depriving the bill of any legally binding effect.
Vision. The part of the Strategic Objectives in the GAA that reflects the developmental goals
of a specific agency or department. It is either a direct veto or a conditional veto.

W
Withdrawal Authorization. A written application to withdraw from a loan/grant,
accomplished by a borrower/grantee and duly authorized by a lender/donor.
Working Fund. An advanced fund or seed money from loan/grant proceeds established to
accelerate disbursements of funds and ensure efficient projects implementation.

Y
Year-End Report. A new publication by the DBCC on the macroeconomic outurn,
performance of revenues, disbursements, and debt for the whole year, as well as detailed
discussions on government expenditures and highlights on key programs.

Z
Zero-Based Budgeting (ZBB). A budgeting approach which involves a review/
evaluation of major on-going programs and projects implemented by different departments/
agencies, in order to : (a) establish the continued relevance of program objectives given
the current developments/directions; (b) assess whether the program objectives/outcomes
are being achieved; (c) ascertain alternative or more effective and efficient ways of achieving
the objectives, and ultimately; (d) guide decision makers on whether the resources for the
program/project should continue at its present level, or be increased, reduced or
discontinued.