Veto Message of President Aquino to the 16th Congress regarding the General Appropriations Act of 2015, December 23, 2014

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December 23, 2014


By the mandate vested upon me by the sovereign will of the Filipino people, I sign into law Republic Act (R.A.) No. 10651, the General Appropriations Act (GAA) for fiscal year (FY) 2015, entitled “AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY ONE, TWO THOUSAND AND FIFTEEN, AND FOR OTHER PURPOSES.”

Sa pagsasabatas natin ngayong araw sa Pambansang Gugulin para sa taong 2015, kumikilos tayo para ipagpatuloy ang laban para sa matapat at matuwid na pamamahala. Patuloy tayong naninindigan sa ating panata sa mamamayang Pilipino: siguruhin ang kaunlaran para sa lahat sa pamamagitan ng paggugol na matuwid sa kaban ng bayan.


Today marks the 5th consecutive year that the GAA is enacted before the start of the fiscal year: a feat never before seen since the restoration of democracy in 1986.

Because Congress diligently reviewed our proposed Budget for FY 2015 and promptly approved the same, it fulfilled its commitment to responsive and accountable public expenditure authorization. Once again, I laud the ladies and gentlemen of the 16th Congress. You fulfilled your Constitutional mandate not only by finally eschewing the old, corrupted regime of frequent budget reenactment, but also, and more importantly, by authorizing a Budget that supports our agenda for Inclusive Development.

This is just one of the unprecedented feats that we made possible because we held onto our collective pledge to bring our nation to greater prosperity through good governance.

Because we remained faithful to the Daang Matuwid, investors here and abroad have renewed their confidence on the strength of our economy. Independent observers have likewise lauded the pace and success of unprecedented reforms in just a short span of time. Communities across the country now have greater faith that a working democracy, hinged upon honest and effective governance, can truly bring about greater prosperity for all. They now see how good governance can help bring food on the table, create jobs and livelihood, and secure them from uncertainties of climate change.

Through our collective actions, we have been making the impossible possible.

In the last four and a half years, we translated the Daang Matuwid into Paggugol na Matuwid. We knew from the very beginning that realizing our goal of inclusive growth requires us to boldly reform public financial management: to keep our financial house in order by spending within our means; to focus scarce public resources on programs that have impact by spending on the right priorities; to deliver direct, immediate, and substantial benefits to our people through spending with measurable results.

Today, we enact a Budget that helps us build on our achievements in the last 54 months and achieve the promise of Inclusive Development: where everyone—regardless of birth, gender, or geography—benefits from the opportunities that our thriving nation has to offer. We also enact a Budget that enshrines good governance: a requisite of Inclusive Development.

By ratifying this Budget for FY 2015, you help us sustain and escalate the public financial management reforms that we have nurtured since the start of our turn.

Moreover, you, the men and women of the 16th Congress, responded to the call of the times: to put an end to pork barrel and rein in on the abuses related to it; to rationalize and shine greater daylight into the power of the Presidency and the heads of all Constitutional offices over their respective budgets; to exercise your power of the purse in a way that generates greater public accountability; to ensure that each peso truly benefits your respective constituents; ultimately, to put the people—the boss—at the center of statecraft.

To reciprocate the affirmative action of Congress in favor of Paggugol na Matuwid, my Administration commits to faithfully implement this Budget—with great urgency, with utmost openness, and, most of all, with real and lasting impact for our people. However, before budget execution begins on the 1st of January 2015, I must register the following comments and observations to the changes effected by Congress to the Budget as proposed.


Pursuant to the powers vested in me by the Constitution, I hereby directly veto the following special provisions and proviso in the FY 2015 GAA which contravene the provisions of the Constitution, and existing laws, rules and regulations:


I begin with the inclusion of Unprogrammed Fund, Special Provision No. 11, “Trade Remedies Fund”, Volume II-B, page 1512, which allows income collected in prior years sourced from special or additional duties imposed pursuant to R.A. No. 8800 (Safeguard Measures Act) to be released this year through the Unprogrammed Fund and used by the Tariff Commission, Department of Trade and Industry and/or Department of Agriculture (DA) for implementation of remedies and safeguard measures. Foremost in my consideration is the basic rule that all income of government agencies are deposited in the National Treasury as part of the General Fund to support the operations of the National Government. Thus, special or additional duties collected in prior years have already been expended as they form part of the revenue program of the National Government in the years they were collected.

Secondly, the Unprogrammed Fund is a standby authorization which is activated only when new and/or excess revenues or project loans are generated, thereby rendering the foregoing provision inoperable.


Relatedly, several special provisions allow agencies to directly use their income. Under existing budgeting laws, as a rule, all income of government agencies form part of the General Fund. The exceptions are income of agencies authorized by separate substantive laws to be used for specified purposes. This is not, however, the case for those income referred to under Department of Justice (DOJ)-Bureau of Immigration, Special Provision No. 2, “Use of Income”, Volume II-A, page 1292, and DOJ-National Bureau of Investigation, Special Provision No. 1, “Use of Income”, Volume II-A, page 1298.

Consequently, these income already form part of this year’s revenue program. Allowing said agencies to use their income over and above their appropriations will result in double programming of the same income and increase our expenditure program without the corresponding revenue sources.

Similarly, I directly veto Department of Transportation and Communication (DOTC)-Office of the Secretary (OSEC), Special Provision No. 3, “Use of Income”, Volume II-B, page 992which authorizes the Land Transportation Office to use its income for the processing of driver’s license and motor vehicle registration to pay the agency’s prior years and current obligations to its information technology provider. It must be stressed that the GAA is not the appropriate legislative medium to authorize DOTC to use such income. Moreover, the payment of valid obligations to any government agency’s service provider is always subject to existing laws, rules and regulations. Thus, the DOTC needs only to establish the validity of obligations incurred by it as well as comply with budgeting, accounting and auditing rules and regulations to effect the payment contemplated in this provision.


I am likewise compelled to veto the following special provisions authorizing government agencies to maintain a revolving fund in excess of the amount authorized under existing laws and execute the same without need for approval from the appropriate government agency:

  1. Department of Education (DepEd)-National Museum, Special Provision No. 1, “Revolving Fund for Museum Operations”, Volume II-A, page 569;
  2. Other Executive Offices (OEO)-National Historical Commission of the Philippines, Special Provision No. 2, “Revolving Fund for Projects of the National Historical Commission of the Philippines”, Volume II-B, page 1161; and
  3. OEO-National Commission for Culture and the Arts (NCCA), Special Provision No. 2, “Revolving Fund for Fabrication of Cultural Items and Printing Publications”, Volume II-B, page 1157.

The provisions of R.A. No. 8492 (National Museum Act of 1998), R.A. No. 10086 (Strengthening Peoples’ Nationalism Through Philippine History Act) and R.A. No. 7356 (Creating the National Commission for Culture and the Arts) expressly limit the amount of revolving funds that may be utilized by said agencies, the excess of which must be deposited with the National Treasury as income of the General Fund.


I am one with Congress in exploring ways to address the rise in the cost of living expenses and uplift the lives of every Filipino. This, I am certain is the motivation behind the proviso under Miscellaneous Personnel Benefits Fund (MPBF), Special Provision No. 3, “Productivity Enhancement Incentives”, Volume II-B, page 1494, to wit: “The grant of Productivity Enhancement Incentives shall be exempted from income tax.”

Pursuant to Section 25 (2) of Article VI of the 1987 Constitution, no provision or enactment shall be embraced in the general appropriations bill, unless it relates specifically to some particular appropriation therein. Hence, any grant of exemption from income tax should be provided in a legislative measure for that purpose and not in the GAA. I am confident that existing legislative proposals, which target to alleviate the tax burden particularly of the low income earners by increasing the amount of tax exemption for bonuses, properly cover the objective of this proviso.


I likewise observe the inclusion of new general and special provisions as well as revisions made in existing general and special provisions which should be placed under conditional implementation. To ensure their proper execution and consistency with existing laws, these provisions are hereby subject to specific conditions and/or the issuance of guidelines.


Allow me to emphasize that the numerous reforms we have thus far implemented, such as Early Procurement of Projects, Disaggregation of Lump Sum Funds, GAA-as-a-Release Document, and Checkless Payment System make implementation of projects not only predictable but timely, if not faster. This assures our people that government agencies are not only ready but more than ever able to efficiently implement projects and deliver public services within the current fiscal year.

With this, and in light of the need to sustain all these reforms, I hereby place General Provisions, Section 61, “Availability of Appropriations”, Volume II-B, page 1537, which provides for a two-year validity of appropriations for Maintenance and Other Operating Expenses (MOOE) and Capital Outlays in this Act, under conditional implementation. Thus, while appropriations for MOOE and Capital Outlays are valid until December 31, 2016, I hereby instruct the heads of agencies to ensure that priority socio-economic and development programs and projects as well as those intended to mitigate and address disaster-related concerns are executed within one year thereby allowing the delivery of public services at the soonest possible time.


Indeed, Congress under General Provisions, Section 70, “Meaning of Savings”, Volume II-B, page 1539 has affirmed its intention to allow the declaration of savings resulting from the final discontinuance or abandonment of an ongoing program, activity or project (P/A/P), or non-commencement of a P/A/P. Moreover, it clarified that the same should be due to causes not attributable to the fault or negligence of the agency concerned and would not make it possible for the P/A/P to be implemented during the validity of appropriations.

Once this is determined, the Constitutional officers authorized to use savings may declare the existence thereof to augment deficient items of appropriation.

For the proper implementation of this provision and discount the possibility of diverging application during budget execution, I hereby task the Department of Budget and Management (DBM) to issue rules and regulations governing this, consistent with the intent of Congress.


I note that the following special purpose funds were expressly placed under the administration of the Executive Branch in the following provisions:

  1. E-Government Fund, Special Provision No. 1, “Strategic Information and Communication Technology Projects”, Volume II-B, page 1482;
  2. International Commitments Fund, Special Provision No. 5, “Appropriations under the International Commitments Fund”, Volume II-B, page 1486;
  3. MPBF, Special Provision No. 4, “Appropriations under the Miscellaneous Personnel Benefits Fund”, Volume II-B, page 1494;
  4. National Disaster Risk Reduction and Management Fund (NDRRMF), Special Provision No. 4, “Appropriations under the National Disaster Risk Reduction and Management Fund”, Volume II-B, page 1499;
  5. Pension and Gratuity Fund, Special Provision No. 6, “Appropriations under the Pension and Gratuity Fund”, Volume II-B, page 1504; and
  6. Rehabilitation and Reconstruction Program, Special Provision No. 2, “Appropriations under the Rehabilitation and Reconstruction Program”, Volume II-B, page 1508.

As such, the Executive Branch, through the DBM, should spell out the requirements, procedure, or guidelines as may be necessary in the release and use of these special purpose funds.


I am placing under conditional implementation General Provisions, Section 48, “Authorized Deductions”, Volume II-B, page 1539 particularly on the authority of government agencies to deduct from the salaries of its employees obligations due to lending institutions mentioned under the foregoing general provision. Let me be clear, as a policy, the government should not act as collecting agents for said institutions. It is only in recognition of the practical realities and the advantage afforded to government employees by said institutions that we have acquiesced to this scheme. Consistent therewith, I hereby task all government agencies undertaking salary deductions to first and foremost protect the rights of every government employee under their employ and leverage the accommodation given to lending institutions under this provision, secure for government employees the most favorable terms possible.

Moreover, since government agencies are authorized to charge service fees for undertaking salary deductions which shall then be credited to the agency’s Provident Fund, the use thereof should be focused on providing similar protection and related benefits to covered government employees. Accordingly, the DBM shall ensure that the rules and regulations on the establishment and use of the Provident Fund are rationalized to this end.


I consider General Provisions, Section 43, “Monitoring and Evaluation Expenses”, Volume II-B, page 1533 limiting the authorized appropriations for monitoring and evaluation expenses to three percent (3%) of the costs of programs or projects to be a necessary control measure to ensure that funds go to projects, not to overhead. Thus, the need to complement this provision with rules and regulations setting the policies, standards, and components of an effective monitoring and evaluation system, including the allowable monitoring and evaluation expenses per project category not to exceed the percentage set forth herein.

Once the rules are set, agencies should strictly observe the policies, standards, conditions, limits, and such other rules prescribed by the DBM as these would ultimately determine the needed improvements on, if not the viability of, their programs and projects and will be very material in the consideration of said programs and projects in the succeeding budget cycle.


I take particular interest in a number of special provisions in this Act, which while not expressly in conflict with the provisions of the Constitution and existing laws may, nonetheless, be construed as authorizing the use of fees in contravention thereof. To prevent this, the following provisions are subject to conditional implementation, to wit:

  1. Office of the Ombudsman, Special Provision No. 3, “Use of Income”, Volume II-B, page 1374 – pending the enactment of a separate law authorizing the Office of the Ombudsman to use its income, all fees collected by said agency shall be deposited with the National Treasury as income of the General Fund;
  1. Congress of the Philippines-House of Representatives, Special Provision No. 3, “Revolving Fund for the Reproduction of Legislative Records and Sale of Publications and Products”, Volume II-A, page 11-consistent with Section 8 of the General Provisions of this Act, which authorizes revolving funds to be established and maintained only for receipts derived from business-type activities, subject to the rules issued by the Permanent Committee. The authority under this special provision will apply only to fees collected from business-type activities as determined by the Permanent Committee; and
  1. DOJ-Bureau of Immigration, Special Provision No. 1, “Collection from Shipping Companies and Vessels”, Volume II-A, page 1292, and DOJ-Office of the Government Corporate Counsel, Special Provision No. 1, “Fees from Assessments Levied by the Office of the Government Corporate Counsel”, Volume II-A, page 1301 – following Section 44,Chapter 5, Book VI of Executive Order (E.O.) No. 292, s. 1987 (Administrative Code of 1987) and Section 65 of Presidential Decree (P.D.) No. 1445 (The State Audit Code of the Philippines) fees collected by the above agencies are required to be deposited with the National Treasury. Failure to do so, shall subject the responsible officials and employees to disciplinary actions in accordance with Section 43, Chapter 5, and Section 80, Chapter 6, Book VI of E.O. No. 292, and to appropriate criminal action under existing laws.

On the other hand, Department of Environment and Natural Resources (DENR)-OSEC, Special Provision No. 1, “Integrated Protected Areas Fund”, Volume II-A, page 1022 is hereby subject to Joint DBM-DENR Circular No. 2014-1 dated September 26, 2014 to ensure its proper implementation.


In pursuance of our health reform agenda on universal health coverage, the implementation of additional beneficiaries and amounts under DOH-OSEC, Special Provision No. 7, “National Health Insurance Program for the Indigents and the Poor,” Volume II-A, page 1186 and Unprogrammed Fund, Special Provision No. 12, “Share of the Department of Health from the Incremental Revenue From Excise Tax on Alcohol and Tobacco Products”, Volume II-B, page 1512, respectively shall be limited to indigent individuals not yet covered under National Household Targeting System for Poverty Reduction, as identified by appropriate statistical method determined by the DOH and the Department of Social Welfare and Development (DSWD) in accordance with Section 19 of R.A. No. 10606 (National Health Insurance Act of 2013).

With respect, however, to senior citizen beneficiaries, the provisions of R.A. No. 10645 (Expanded Senior Citizens Act), shall be applied, taking into consideration those already covered under the National Health insurance Program (NHIP).

The additional beneficiaries authorized under these provisions shall be funded through the Unprogrammed Fund. In all instances, the implementing agencies shall ensure that no overlapping of beneficiaries under the NHIP takes place.

The DOH and DSWD shall issue the guidelines to further clarify the foregoing conditions and ensure the successful implementation of the expanded NHIP under these provisions.

Similarly, implementation of DOH-OSEC, Special Provision No. 2, “Hospital Income”, Volume II-A, page 1184 and DOH-OSEC, Special Provision No. 8, “Assistance to Indigent and Poor Patients”, Volume II-A, page 1186 shall be subject to the joint guidelines of DOH and DSWD to determine the qualified indigent beneficiaries and procedure in the implementation of the Point of Care Program.


The following provisions are likewise placed under conditional implementation to ensure the orderly implementation of the programs and projects covered thereunder:

  1. The DBM shall ensure that the farm-to-market road (FMR) projects to be implemented under DA-OSEC, Special Provision No. 5, “Implementation of Farm-to-Market Road Projects”, Volume II-A, page 93 are consistent with the FMR projects included in the master plan submitted to it by the DA and that the location of FMRs lead to arterial or secondary national roads, tourism zones, fishing ports, and key production and processing areas;
  2. The Department of Public Works and Highways (DPWH), in the implementation of the Local Infrastructure Program under DPWH-OSEC, Special Provision No. 7, “Local Infrastructure Program”, Volume II-B, pages 3-4 shall conform with the standards and requirements set for the type of infrastructures covered in this provision. This includes the preference given to the fourth to sixth class municipalities and their component barangays where the absolute number of poor families and the incidence of poverty are high as identified in the latest official poverty statistics of the Philippine Statistics Authority-National Statistical Coordination Board.
  3. The use of engineering and overhead expenses (EAO) authorized under DPWH-OSEC, Special Provision No. 15, “Engineering and Administrative Overhead Expenses”, Volume II-B, page 4 for pre-construction activities shall be limited to activities conducted after detailed engineering as expenses for the latter is already covered by the appropriations for feasibility study and detailed engineering under the DPWH-OSEC budget;
  4. As for DPWH-OSEC, Special Provision No. 26, “Project Modification”, Volume II-B, page 5, given the role of infrastructure spending in our pursuit for Inclusive Development, the project modification authority under this provision shall be undertaken only when needed and at the soonest possible time, not later than the second quarter of the current fiscal year. This assures our people that proper planning is undertaken by the DPWH and therefore projects are implemented on time, if not earlier than planned.

More important, any modification from one project category to another, which would entail augmentation of an item of appropriation, shall comply with the rules on savings and augmentation in this Act;

  1. With respect to DepEd-OSEC, Special Provision No. 4, “Provision and Maintenance of Basic Educational Facilities”, Volume II-A, page 282, the use of appropriations under the Basic Educational Facilities for EAO shall strictly be by agencies implementing infrastructure projects consistent with its nature and purpose. Thus, the DepEd can only claim to have EAO expenses when it actually implements an infrastructure project, which is not, however, sanctioned under this provision;
  1. In the acquisition of school sites under DepEd-OSEC, Special Provision No. 7, “Acquisition of School Sites”, Volume II-A, page 283, the DepEd shall prioritize urban areas where school congestion is high and in far-flung areas where local government units (LGUs) have no or limited capacity to buy new school sites;
  1. While the DepEd is given authority to use the MOOE of schools for their operational requirements, which includes procurement of supplies that would enable them to improve the delivery of educational services under DepEd-OSEC, Special Provision No. 24, “Operations of Schools”, Volume II-A, page 285, the same shall be implemented consistent with procurement, budgeting, accounting and auditing laws, rules and regulations;
  1. In accordance with the provisions of R.A. No. 10066 (National Cultural Heritage Act of 2009), the State shall conserve, promote and popularize the nation’s historical and cultural heritage and resources. To this end, DepEd-OSEC, Special Provision No. 22, “Preservation of Gabaldon School Buildings”, Volume II-A, page 285 and General Provisions, Section 19, “Protection of Built Heritage, Cultural Properties and Cultural Landscapes”, Volume II-B, page 1529 shall both be implemented within the framework of the above laws. The NCCA and other cultural agencies shall protect the State’s interest by ensuring that government properties which are deemed part of the country’s cultural heritage as cultural treasures, important cultural properties or grade III cultural properties are not altered, renovated or demolished without prior clearance from them, as the case may be;
  1. I note that the additional amount earmarked as cash awards for child-friendly municipalities and cities under DILG-OSEC, Special Provision No. 1, “Performance Based Challenge Fund”, Volume II-A, page 1226 shall be subject to the good governance criteria under the Performance-Based Challenge Fund to ensure that the primordial objectives of the Local Governance Performance Management Program are maintained and achieved. The DILG may issue guidelines necessary to this end;
  2. DILG-OSEC, Special Provision No. 5, “Housing Program for Informal Settler Families Residing in Danger Areas Within Metro Manila”, Volume II-A, page 1226, directing the DILG to implement the relocation of informal settler families during the summer vacation to prevent interruption in the studies of children shall consider other relevant factors in the relocation process. Accordingly, the relocation of informal settler families may be undertaken at such time as may be necessary taking into consideration the adequate preparation, orientation and adaptation of affected families, and with least interruption, if at all, in the studies of children affected by the relocation;
  3. To ensure that the implementation of Department of Foreign Affairs (DFA)-OSEC, Special Provision No. 11, “Legal Assistance Fund”, Volume II-A, page 1166 is align with budgeting laws, rules and regulations, the appropriations herein for the legal assistance fund shall be used in accordance with R.A. No. 10022 (An Act Amending Migrant Workers and Overseas Filipinos Act of 1995) and remain to be part of the General Fund. The creation of special funds require the identification of income sources which are then earmarked for specified purposes as provided in Section 29 (3) of the Constitution, which states that “(a)ll money collected on any tax levied for a special fund and paid out for such purpose only”. Thus, the appropriations in this Act for the legal assistance fund clearly suggest the lack of income sources to justify the creation of a special fund.

Moreover, the proviso authorizing augmentation of the amount appropriated as legal assistance fund from savings of the DFA shall be subject to the rules on savings and augmentation under this Act.

12. Finally, the National Sports Development Fund under OEO-Philippine Sports Commission, Special Provision No. 1, “National Sports Development Fund”, Volume II-B, pages 1221-1222 shall be used primarily to give assistance to member-athletes of National Sports Associations and those who will represent our country in international competitions sanctioned by the Philippine Olympic Committee. This is in pursuance of a unified vision in harnessing the potentials of our athletes and nurturing their growth and advocating the country’s sports development agenda.


I likewise subject the inclusion of all importations by the DOTC related to the maintenance, rehabilitation and capacity expansion of the Metro Rail Transit Line 3 system as non-cash transactions under General Provisions, Section 14, “National Internal Revenue Taxes and Import Duties”, Volume II-B, page 1527 to approval by the Department of Finance to ensure that only those properly treated as non-cash transactions of the National Government shall be considered as both revenue and expenditure of the government and are thus, deemed automatically appropriated.


With the ever changing climate and heightened risks and dangers associated with disasters, there is all the more reason to prepare and mitigate them through focused and purposive utilization of disaster-related appropriations. Thus, the provision for calamity insurance under NDRRMF, Special Provision No. 3, “Quick Response Fund”, Volume II-B, page 1499 shall be sourced from the NDRRMF under pre-disaster activities. It shall not cover the QRF appropriations in the budgets of government agencies as these are exclusively meant as stand-by fund in order that the situation and living conditions of people living in communities or areas stricken by calamities, epidemics, crises and catastrophes may be normalized as quickly as possible.

Relatedly, agencies procuring calamity insurance for government properties shall see to it that they get the most out of said insurance and that the proceeds thereof be exclusively used for the repair, rehabilitation, reconstruction and/or replacement of buildings and other structures covered therein.


The succeeding provisions on LGU shares are properly placed under conditional implementation to avoid conflict with existing laws and jurisprudential rules, and ensure their orderly execution.

First, Allocations to Local Government Units (ALGU)-Special Shares of LGU in the Proceeds of National Taxes, Special Provision No. 3, “Use, Allocation and Release of LGU Share in Excise Taxes from Locally Manufactured Virginia-Type Cigarettes”, Volume II-B, page 1471 ought to consider the pronouncement by the Supreme Court in Greco Antonious Beda B. Belgica et al., vs. Honorable Secretary Paquito N. Ochoa, Jr., et al., (G.R. Nos. 208566, 208493 and 209251, November 19, 2013) against any post-enactment intervention of legislators in the implementation of the Budget. Therefore, Memorandum Circular No. 91-A dated November 28, 1993, which requires legislative consultation respecting the portion given to cities or municipalities in the congressional districts of a beneficiary province, shall be supplanted by new guidelines by the DBM to cover release of the subject LGU shares.

Second, the amount of One Hundred Million Pesos (P100,000,000) under ALGU-Local Government Support Fund (LGSF), Special Provision No. 1, “Local Government Support Fund”, Volume II-B, page 1475 with a related provision under General Provisions, Section 88, “Internal Revenue Allotment of LGUs”, Volume II-B, page 1542 on the payment of deficiencies in the internal revenue allotment (IRA) share of LGUs shall pertain to those resulting from valid adjustments, changes, modifications or alterations in any of the factors affecting the IRA computation. The bases in determining any deficiency in the IRA shares of LGUs under these provisions shall be solely through the submission of the final masterlist of land area issued by the Land Management Bureau, as validated by the DILG and National Mapping and Resource Information Authority and/or presidential proclamation declaring the latest revised population count. For adjustments resulting from court decisions, the same shall be based on a final and executory judgment.

Further, given the limited appropriations provided in this Act, valid adjustments requiring more than the amount provided herein can only be recognized and implemented in the succeeding year.

The DBM shall issue guidelines for this purpose.

Third, ALGU-Special Shares of LGU in the Proceeds of National Taxes, Special Provision No. 2, “Use, Allocation and Release of LGU Share in National Wealth”, Volume II-B, page 1471, which mandates that interest earnings of national wealth shares shall accrue to the General Fund of the LGU concerned shall be harmonized with the provisions of Section 294 of R.A. No. 7160 (Local Government Code of 1991). Hence, the interest earnings from the LGU shares in the national wealth shall be used for local government and livelihood projects, with at least eighty percent (80%) thereof earmarked for projects and activities which aim to lower the cost of electricity.


Allow me to likewise note the following special provisions and express my views thereon:


As in previous years, I affirm my unwavering trust and confidence that in the implementation of Congress of the Philippines-House of Representatives, Special Provision No. 1, “Organizational Structure”, Volume II-A, page 10 and Congress of the Philippines-Senate, Special Provision No. 1 “Organizational Structure”, Volume II-A, pages 1-2, particularly in the determination of salaries, allowances and other benefits of its members, personnel and consultants, the leadership of both Houses of Congress and the institutions covered therein shall faithfully observe the Constitutional principle of salary standardization, which Congress itself enshrined as a state policy in R.A. No. 6758 (Compensation and Position Classification Act of 1989), as amended by Congress Joint Resolution No. 4, s. 2009 (Authorizing the President of the Philippines to Modify the Compensation and Position Classification System), and R.A. No. 6686 (An Act Authorizing Annual Christmas Bonus), as amended by R.A. No. 8441 (An Act Increasing the Cash Gift). Moreover, I am certain that these institutions shall remain steadfast in their commitment to the fundamental policy set forth under Section 8, Article IX-B of the 1987 Constitution, which prohibits the payment of additional compensation, and the requirements of other relevant laws.


Indeed, with the modernization of the Armed Forces of the Philippines (AFP) and our intensified fight against poverty, especially in conflict affected communities, the rationale for the establishment of the Citizen Armed Forces Geographical Units (CAFGUs) has already been served. Thus, in the implementation of AFP-Philippine Army, Special Provision No. 3, “Compensation and Separation Benefits of the Citizen Armed Forces Geographical Units”, Volume II-A, page 1400, the AFP shall ensure that no new CAFGUs shall be recruited for training and the costs attendant to the training of existing CAFGUs shall be gradually scaled down in anticipation of its eventual demobilization.


The recruitment of teachers under DepEd-OSEC, Special Provision No. 14, “Priority in the Hiring of Teachers”, Volume II-A, page 284 is understood to be done with due preference to those with higher qualifications, as in the case of contractual or volunteer teachers already in the employ of DepEd or the LGU concerned.


To be sure, it bears emphasis that the priority given to agriculture and increasing food productivity under DSWD-OSEC, Special Provision No. 11, “Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services: National Community Driven Development Project (KALAHI-CIDSS NCDDP)”, Volume II-B, page 912 is circumscribed by the provisions of the loan agreements entered into by the DSWD, with the Asian Development Bank, and with the International Bank for Reconstruction and Development.


In the spirit of responsible and accountable fiscal management, this Budget mandates that appropriations for Personnel Services (PS) in this Act shall be utilized within the current fiscal year. Thus, PS appropriations authorized for all government agencies, as well as those enjoying fiscal autonomy shall only be valid for release and obligation until December 31, 2015 consistent with the same intention and policy set under Section 1 of the General Provisions of this Act and Chapter 4, Book VI of E.O. No. 292, respectively.


As a final note, changes, increases, reductions and new budgetary items were introduced in this Act that may not have been considered in the formulation of the performance targets of agencies, which now form part of this Act. As in previous years, I hereby subject these changes, increases, reductions and new budgetary items to the issuance of guidelines by DBM to ensure that all said modifications, once implemented, should carry with them corresponding adjustments in the committed performance targets of the agencies concerned. To achieve this, the DBM shall inform the agencies of the changes in their respective appropriations and require the submission of their revised performance targets. Moreover, I direct the DBM to promulgate the approval requirements for the release of new budgetary items or appropriations affected by said, particularly for those the implementation of which will result in major shift in policies of the government, under which the Budget was crafted.


Sa mga nagdaang taon, ipinakita natin na possibleng makamit ang kaunlaran para sa lahat sa pamamagitan ng tapat at tuwid na pamamahala at paggugol sa kaban ng bayan. Ito, kung tutuusin, ang malinaw na mandato sa atin ng taumbayan—ng ating mga boss.

The Philippines has proven to the rest of the world that good governance promotes better performance of public institutions, which then lead to better, more direct, and more substantial benefits to our people, especially the poor and the marginalized. Our good performance that has shown positive impact has ultimately rebuilt public trust, which has been critical for the State to effectively and genuinely effect difficult but necessary reforms.

Ladies and gentlemen of this respected Congress, our administration was placed by history in a critical period of transition. We are in a crucial stage of transforming the bureaucracy from the status quo of ineptness, corruption, and patronage to a regime of openness, accountability, and citizen’s engagement. We are in a sweet spot that provides us with an unprecedented chance to bring about greater growth and creating ample opportunities for all. We are moving towards achieving the drastic reduction of poverty and building a robust middle class.

We are on the cusp of a new era defined by a citizenry empowered to influence the way government operates and to create greater prosperity for the nation.

Will our nation’s journey continue on the Daang Matuwid, or will we backtrack and falter on our commitment to lasting change?

The answer is obvious: we must do everything in our power to fulfil our Social Contract with the people. After all, it is by the people’s sovereign will that we are in positions of great responsibility. It is through their trust and confidence that we can break boundaries, confront powerful vested interests, and bring about bold changes in government. It is through People Power—through instituting it in the very halls of government—that our nation can prosper.

As servant of the Filipino People, I shall ensure that the government will properly, efficiently, and inclusively implement this GAA beginning January 1, 2015.

Very truly yours,

Senate of the Philippines
Pasay City