This page contains terms commonly used in public finance. Use the Table of Contents above to go straight to the term you are looking for. We update this page regularly.
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.
Prior Year’s Accounts Payable are those accounts payable which have been incurred and remained unpaid as of the end of the preceding year.
Current Year’s Accounts Payable are those accounts payable which have been incurred during the current year and remain unpaid before the end of the current year.
Activity
A recurring work process that contributes to the implementation of a program or sub-program.
Advice/Authority to Debit Account (ADA)
Refers to the accountable disbursement document which serves as notice to the Modified Disbursement System- Government Servicing Bank (MDS- GSB) to debit the agency’s MDS sub- account for payment of due and demandable A/Ps.
Agency Performance Review
The process of determining the level of accomplishment of each agency in terms of outputs, income generated, and actual expenditures incurred in the production/delivery of goods and services to the public vis-à-vis the targets/budgets for the same period
Allotment
Authorization issued by the Department of Budget and Management (DBM) to an agency, permitting the agency to commit/incur obligation and/or pay out funds within a specified period of time within the amount specified through General Appropriations Act as an Allotment Order (GAAAO), General Allotment Release Order (GARO), and Special Allotment Release Order (SARO).
Annual Cash-Based Appropriation
Annual appropriations that limit incurring obligations and disbursing payments for goods delivered and services rendered, inspected and accepted within the current fiscal year. Payments of these obligations shall be made until the Extended Payment Period or within three (3) months immediately succeeding the end of the preceding fiscal year.
A cash-based appropriations give authority to make cash payments over limited period of time, generally corresponding to the fiscal year while an obligation-based appropriations give rights to make commitments and to make cash payments according to these commitments, without a predetermined time limit. Such appropriations have their own life cycle and are not limited to one year.
Appropriation
An authorization pursuant to laws or other legislative enactment, hence, required Congressional action, directing the spending of public funds for a specific purpose, up to a specified amount under specified conditions.
There are four (4) kinds of appropriations in Philippine budgeting: 1) Automatic Appropriations, 2) New General Appropriations, 3) Unprogrammed Appropriations, and 4) Supplemental Appropriations.
Automatic Appropriations
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 the Congress of the Philippines, and need not be included in the legislation of annual appropriations such as debt services, net lending, and special accounts.
Balance of Payments (BOP)
A summary of the economic transactions of a country with the rest of the world for a specific period. It serves as an accounting statement on economic dealings between residents of the country and non- residents.
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. Borrowings may either be from domestic or foreign sources.
Budget
The budget is the government’s plan for a year. It is a table/schedule of expenditures, based on either obligations or cash concepts and the corresponding sources of financing, either from revenues, borrowings, or cash drawdown.
Ultimately, it is a tool that enables government to achieve its development agenda.
Budget and Financial Accountability Reports (BFARs)
Harmonized reports on the agencies’ actual financial and physical accomplishment/performance for a given period prescribed by the oversight agencies, i.e., DBM and Commission on Audit (COA) to effectively report, monitor and/or evaluate agency performance versus plans and targets which shall serve as basis for sound policy decisions.
Go to Reports menu to check on the common reports prepared in public finance in the Philippines.
Budget Balance
Derived as the difference between revenues collected and disbursements made (excluding debt repayments and payments on non- budgetary accounts) by the NG during a given year.
In the context of government budgeting, when revenues and disbursements are equal, the budget is balanced. A budget surplus exists when revenues exceed disbursements. A budget deficit is incurred if revenues are less than disbursements.
Budget Call
A budget document issued by the DBM at the start of the budget preparation phase. This document contains the Budget Priorities Framework, which sets budget priorities, macroeconomic assumptions, and fiscal parameters for the Proposed Budget; and Guidelines, procedures, and prescribed forms in formulating budget proposals.
A separate Corporate Budget Call is issued for government corporations and Local Budget Memorandum for LGUs.
Budget Execution Documents (BEDs)
Annual documents required at the onset of the budget execution phase, which contain the agencies’ targets and plans, physical as well as financial, for the current year.
