Government Budgeting In The Philippines

Chapter 2
THEORETICAL BACKGROUND
Review of Related Literature
Historical Background

The history of government budgeting in the Philippines began on the first two years of the 20th century when the Second Philippine Commission acted as the legislative body who are the main proponents for the measurement of the annual expenditures of the government. This legislation was in accordance with the Philippine Bill 1902, which stated that the disbursements from the National Treasury were to be authorized only in the pursuance of appropriations made by law.
The Philippine Legislative was made up of two chambers: the Philippine Senate and the House of Representatives, this was in accordance to the implementation of the Jones Law in 1916. The annual

292, according to the 1987 Constitution, provided for major organizational subdivisions of the Department of Budget and Management.
During the administration of Fidel V. Ramos in 1992, the government budgeting targeted to form the national budget for instrument for breaking the boom and bust cycle that had defined the Philippine economy in the past. Keeping up the operations of the government and its project, the budget became and a way to disseminate the gains of economic development.
During the start of Joseph Estrada's presidency, the country's economic policies and strategies were reviewed through the Asian financial crisis that characterized the period prompted the national leadership. The government had to increase the domestic demand by allowing expenditures and pump-priming the areas of public infrastructure and social services to maintain macroeconomic stability in light of the effects of the economic turmoil. It had to embrace an expansionary fiscal policy by permitting a logical level of cyclical deficit to be financed largely through the foreign borrowing while offsetting the negative result of deficit by introducing structural reforms in the budget

It is a complex process that focuses more on the authority of public sector than the private side as it is legal basis for any financial transaction and is conditional in a legal sense. Budgeting is comprised of five different functions, namely, short-term planning, short-term authorization, medium to long-term planning, control and budget reporting. Under short-term planning, the next budget period of one year is considered. When the multi-year period is discussed, short-term planning is applied. It is the most detailed form of financial planning as it includes expenses, revenues, investments and finance transactions. It is presented under the budget statement of financial performance and in the budget cash flow statement. Short-term planning