G/Budgeting: 10+ Often Miscontrued Budgeting Terminologies

1. Appropriation vs. Allotment

Appropriation refers to an authorization made by law or legislative enactment directing payment out of government funds under specified conditions or for specific purposes.

On the other hand, allotment is an authorization issued by the DBM to an implementing agency to incur obligations for specified amounts contained in a legislative appropriation.

2. Appropriation vs. Budget

As defined above, an appropriation refers to an authorization made by law or legislative enactment directing payment out of government funds under specified conditions or for specific purposes.

On the other hand, the budget may be construed as the total amount of appropriations programmed to be spent during the budget year and that can be supported by available resources in accordance with the fiscal program to enable the national government to enter into contract for the delivery of goods and services to the public.

Related: What’s the difference between Appropriation and Allotment?

3. Obligations vs. Disbursements

Obligations are liabilities legally incurred and committed to be paid for by the government either immediately or in the future.

Disbursements refer to the actual withdrawal of cash from the Bureau of the Treasury due to the encashment of checks issued by agencies and payment of budgetary obligations.

Related: What’s the difference between Obligations and Disbursements?

4. Expenditure Program vs. Financing Program

The expenditure program refers to the ceiling on the obligation that can be incurred by the government in a given budget year. Said ceiling is supported by estimated financial resources.

The financing program pertains to the projected revenues from both existing and new measures, the payment of debt principal due, as well as the planned borrowings to finance budgetary transactions.

5. Obligation Budget vs. Cash Budget

The obligation budget is the proposed amount of commitments that the government may incur or enter into for the delivery of goods and services in a fiscal year.

On the other hand, cash budget is the aggregate of revenues, borrowings and disbursements of the National Government. It shows the actual deposits and withdrawals of cash of national government agencies from the BTR for payment of current and previous year’s obligations.

6. Programmed Appropriations vs. Unprogrammed Appropriations

Programmed appropriations are appropriations with definite/identified funding as of the time the budget is prepared while unprogrammed appropriations are those which provide standby authority to incur additional agency obligations for priority programs or projects when revenue collection exceed targets, and when additional grants or foreign funds are generated.

7. Obligation Program vs. Annual General Appropriations

The obligation program refers to a portion of total appropriations programmed for the fiscal year, unutilized prior years accounts, payments for automatic and continuing accounts that can be supported by available resources in accordance with the fiscal program.

The annual general appropriations refers to the appropriations authorized under the General Appropriations Act or the new legislative authorizations enacted and approved by Congress. This appropriation level includes Programmed and Unprogrammed Appropriations.

8. Disbursement Program vs. Cash Release Program

The disbursement program refers to the actual withdrawal of cash from the Treasury due to the encashment of checks issued by agencies and from payment of other obligations.

The cash release program refers to the program of Notice of Cash Allocation (NCA) releases to be made by the DBM based on the Agency Work and Financial Plan and the cash available in the Bureau of the Treasury. The NCA provides the authority for the maximum amount of withdrawals that an agency can make from government servicing banks for the month indicated.

9. Capital Expenditures vs. Infrastructure Expenditures

Capital expenditures refer to expenditures for capital goods or durable goods which are used for productive purposes such as the construction of roads and bridges, dams, power and irrigation works, schools and hospitals. It is also known as capital outlays, referring to the purchase of equipment and fixed assets, the benefits of which extend beyond the budget year and which add to the assets of the government.

Infrastructure expenditures, however, is a subcomponent of capital outlays which refer to spending for the construction of various basic public works, such as roads, ports, airports, water supply, irrigation and other capital investments particularly of the Department of Public Works and Highways, the Department of Transportation and Communication, the school building program of DECS and the national irrigation projects of the Department of Agriculture.

10. National Budget vs. Public Sector Budget

The national budget refers to the totality of the budget of the various departments of the national government including support to LGUs and GOCCs.

The public sector budget or the consolidated public sector budget is the aggregate of revenues, expenditures and indebtedness of all units of government, including the national government and its agencies and instrumentalities, local government units, and government-owned and/or controlled corporations.

WATCH: 9-Minute Video: Complete Guide on How the Government Prepares the National Budget

Source: Often Misconstrued Budget Terminologies | Department of Budget and Management | Download PDF File