PUBLIC FINANCE

R E V E N U E S O U R C E S A N D E X P E N D I T U R E
P A T T E R N O F T H E P H I L I P P I N E G O V E R N M E N T

F M P R E L E C 1 0 5

Course Outcome:
At the end of the course, you will be able to:
CO1: Trace the Revenue Sources and Expenditures of the Philippine

At the end of the discussion, you will be able to:

Topic  Identify the fund sources of the Philippine Government
Learning  Categorize expenditures of the Philippine Government
 Create a concept map on the revenue sources and expenditures of
Outcomes: the Philippine Government
MODULE 1

WHAT’S
INSIDE?

Introduction 1
Definition , Scope & 3
Functions of Public
Finance
Objectives of Fiscal 4
Operations This photo is captured by Ramon Kagie

This module will help you understand the basic principles and patterns of government financing. It dis-
Private versus Pub- 4
lic Finance cusses the systems of budgeting and expenditures, borrowings , allocation of resources and various
Modern Trends in
types of taxation. Various learning activities are given to enhance your learning engagement. Together,
5
Public Finance let us embrace the changes and enjoy the teaching and learning process.

Major Sources of
Funds to Finance
National Budget
6
Introduction
Public Finance is the field of economics that stud- at all levels—national, state and local—provide
Structure of the 7 ies government activities and the alternative the public with desired services and how they
Philippine Govern- means of financing government expenditures. As secure the financial resources to pay for these
ment Expenditure you study public finance, you will learn about the services. Public finance deals with the finances
Patterns and 7 economic basis for government activities. A crucial of public bodies –national, State or Local – for
Trends of Expendi- objective of the analysis is to understand the im- the performance of their functions. The perfor-
pact of government expenditures, regulations, tax- mance of these functions leads to expenditure.
Expenditures and 8- es, and borrowing on incentives to work, invest, The expenditure is incurred from funds raised
Functions 12 and spend income. This will develop principles for through taxes, fees, sale of goods and services
understanding the role of government in the econ- and loans. The different sources constitute the
omy and its impact on resource use and well-being revenue of the public authorities. Public finance
of citizens. studies the manner in which revenue is raised;
Key concepts: public finance,
the expenditure is incurred upon different items
revenue, expenditures
Specifically, public finance is concerned with how etc. Thus, public finance deals with the income
a government raises money, how that money is and expenditure of public authorities and princi-
spent and the effects of these activities on the ples, problems and policies relating to these
economy and society. It studies how governments matters.
 PAGE 2

Hi! Tell Me About the Pictures

Create small groups of 3 to 5 persons to
work together to connect the pictures
and try to guess what the topic will be
about. You may contact your classmates
via SMS or group chat. Write your output
in the attached sheet in this module.
Kindly check the rubric for your format-
ting of your answers.

RUBRIC FOR PICTURE DESCRIPTION

Let’s have self-assessment

on the topic. Kindly read the
statements and give your
response as approve or not.
This will help us gauge your
preparedness for the learn-
1. I can explain the basic concepts of Public Finance.
ing process.
2. I can differentiate private and public finances.
3. I can classify the sources of finances of the government.
4. I can identify some government expenditures.
5. I can name some of the government sources.
6. I know some of the current government secretaries.
 PAGE 3
Definitions of Public Finance
According to Dalton tioning of the govern- public finance studies
“Public Finance is con- ment. the manner in which
cerned with the income Professor Richard Mus- the state through its
and expenditure of public grave defined Public Fi- organ, the government,
authorities and with the nance as, “The complex raises and spends the
adjustment of the one to of problems that centers resources required.
"Public Finance is nothing else
the other. The economics on the revenue- Public Finance is thus
than a sophisticated discussion of public finance is funda- expenditure process of concerned with the
of the relationship between the mentally concerned with Government is referred operation and policies
individual and the state. There
the process of rising and to traditionally as public of the fiscal public
disbursement of funds finance.” treasury.
is no better school of training
collection of revenue and
than public finance." - Vaclav its spending for the func- According to Taylor,
Klaus (Former Czech Republic
Prime Minister)

Scope of Public Finance

Prof. Dalton categories the scope of public ture), causes of growth and effects of
finance into four areas which includes public public expenditure.
income, Public expenditure public debt and (c) Public debts: The study of public
financial administration. debt forms a very important part of
public finance in modern times as gov-
(a) Public revenue: The study of various ernments are increasingly resorting to
sources of government’s income, the debt to meet the growing needs of the
principles guiding the raising of income people. Public finance studies the
(e.g. canons of taxation), their relatives’ sources, burden and impact of public
merits and demerits and their effects on debt.
the economy (e.g. impact and incidence (d) Financial administration: This in-
of taxation). cludes the study of the preparation,
(b) Public expenditure: The study of the passing and implementation of the
manner in which public expenditure is budget, budgetary policies and their
classified, the principles guiding public socio-economic impact, inter -
expenditure (canons of public expendi- governmental financial relations, fiscal
management and fiscal responsibility.

Functions of Public Finance

The functions of public finance all activi- market failure, achieve growth equity
ties with regard to collection of revenue and maximize social welfare.
and expenditure on various activities. 2) Functional Finance. The govern-
Earlier theories public finance narrow ment should maintain a reasonable
definition of the functions to be carried level of aggregate demand at all times
out by public authorities. It is clear that by using the budget. Most developed
the area of state activity has enlarged over economies followed functional fi-
the past two decades which increased the nance policies in order to control
functions and scope of public finance. trade cycles. Developing countries
1. Economic activities of the state. The followed such policies to promote
scope of public finance was confined to economic growth.
the traditional functions of the state, that 3) Fiscal Operations. The scope of
is, provision of defense, law and order, public finance includes fiscal opera-
justice and civic amenities. But with the tions and their objectives. Fiscal op-
emergence of welfare states the scope of erations refer to raising public reve-
public finance was broadened public fi- nue, spending to achieve certain
nance now includes the use of the budget goals and financial administration.
This photo is captured by as a tool to correct distortion in the econ- For such operations, the government
omy, to mobilize resources, to maintain uses fiscal tools like taxation, public
Rico Zamudio
price stability create employment prevent expenditure and public debt.
 FMPR ELEC 105 PAGE 4

Objectives of Fiscal Operations This photo is cap-

tured by JC Gellidon

(a) Allocation of resources. The business cy-

most important objectives of fiscal operations is to de- cles. Economic stability implies absence of
termine how the Country’s resources will be allocated sharp cyclical movements in the form of booms
to different sectors of the economy in order to achieve and depressions. To bring about such stability,
predetermined goals. The national budget determines countercyclical fiscal operations are adopted. To
how funds are allocated to different heads of expenses. counter depression and recession, government
The policy of public expenditure is used by the govern- expenditure is increased to generate employ-
ment to directly undertake resource allocation for dif- ment and taxes are reduced to encourage con-
ferent sectors. On the other hand, the government can sumption and investment. During inflation,
use taxation and subsidies to indirectly influence re- public expenditure is reduced and taxes are
source allocation. raised.
(b) Distribution. Fiscal operations can be effectively (d) Economic growth. In developing and under-
used affect the distribution of national income and re- developed economies, the objectives of fiscal op-
source Taxation and public expenditure policies are erations are more promotional in nature. The
used by the government to reduce inequalities. Progres- basic focus of fiscal operations in such econo-
sive direct taxation impose heavier burden on the rich mies is the use of budgetary operations to
than the poor. Public expenditure on social infrastruc- achieve growth and development. This is done
ture and subsidies on food housing, health and educa- by encouraging capital formation and invest-
tion help reduce income inequality. ments through public expenditure and tax in-
(c) Stabilization. Developed economies experience centives to private sectors.

ness and success of measures

Private versus Public Finance adopted by private and public
almost on a continuous basis from in-
ternal and external sources. They can
sector depends on the adminis- borrow from the people, the central
Public finance deals with study of trative machinery. If the administra- bank, Commercial banks and other fi-
income, expenditure, borrowing and tive machinery is inefficient and cor- nancial institutions as well from exter-
financial administration of the gov- rupt it will lead to losses and wastag- nal sources.
ernment. Private finance is the es. 5. Motive: In case of public finance,
study of income, expenditure, bor- DIFFERENCES: the decisions are reached through polit-
rowing and financial administration 1. Magnitude: The most significant ical and administrative procedure and
of individual or private companies. difference between the two types of based on common social objectives.
Both public and private finance are finances is in terms of size and mag- Private finance is governed by profit
fundamentally similar in nature but nitude. Households and businesses motive for businesses or satisfaction of
different from each other on various have relatively smaller amount of wants of individuals and households.
operational aspects. resources available to them and 6. Time dimension: Both private and
SIMILARITIES: hence their budgets are smaller in public financial activities try to balance
1. Objective: Satisfaction of hu- size as compared to those of govern- between the immediate objectives and
man wants is the main objective of ments. future goals. But private economic
both public and private finance. The 2. Public Scrutiny: Personal budg- units, especially households, are pri-
main aim of public finance is to sat- ets of households are a private affair marily focused on fulfillment of present
isfy social wants and that of private and not made public. In case of busi- and immediate wants. In case of public
finance to satisfy individual wants. ness finance, the budget is made authorities, the focus is on both pre-
2. Principles: The principle of max- known to the stakeholders and Gen- sent and future.
imum social benefits is the guiding eral public for information and scru- 7. Income Expenditure adjustment:
principle followed by the govern- tiny. In case of public finance, every Generally, while a private economic
ment while spending its income. budgetary decision has to be made unit adjust its expenditure to income,
Individuals also follow the principle known to the people of the nation. public bodies adjust income to expendi-
of maximum satisfaction when 3. Source of revenue: Private eco- ture. Private finance will try and adjust
spending out his given income. nomic units earn their income by expenditure according to income and in
3. Income, Expenditure and bor- using assets owned by them. Their order to do so may even forego fulfill-
rowing: The resources or the in- sources of income are salaries, wag- ment of certain wants. On the other
come for both government and the es, interest, rent and profits which hand, Government are guided by wel-
individuals are limited. In case of arise out of transactions. In case of fare and growth consideration for which
shortage, borrowing can be done for governments, the source of income expenditure have to be predetermined.
both and both are under obligation are taxes and non-tax revenues. In Since they have the power to raise fund
to repay the borrowed money. case of taxes, fees, fines, fines there through taxation, borrowing, deficit
4. Policies: Both the private and in an element of compulsion. financing, they try to adjust their reve-
public finances adopt policies for 4. Sources of borrowing: Private nues to the predetermined expenditure
maximizing welfare. In Private fi- economic units may borrow from in- requirements.
nances as well as in public finance formal sources like friends, Relatives, 8. Assessment of outcomes: It is
only sound policies will enable max- moneylenders as well as from formal much easier to measure and evaluate
imization of welfare and benefits. sources like banks and financial in- the outcome of private financial activi-
5. Administration: The effective- stitution. Public bodies can borrow ties than the outcome of public finan-
 PAGE 5
Modern Trends in Public Finance
cial activities. In case of
Classical economists be- In such a system, the small and the budget
private economic units,
lieved that the less the role of the government should balance. These
the outcome may be
government interfered in was expected to be re- beliefs form the basis of
measured by profits of
the economy the better it stricted to traditional the principle of sound
business, fulfillments of
is. This belief, along with areas like defense, law finance.
wants of households. In
private ownership of fac- and order, justice, provi-
case of public finance, the
tors of production, was sion of civic amenities The following are some
outcome has to measured
the foundation of Laissez and therefore most gov- of the features of sound
and evaluated in terms of
faire capitalism, which is ernment spending was finance:
multiple parameters.
a system where econom- expected to be restricted
These are social welfare,
ic transactions are large- to these areas. 1. Says Law
economic growth, securi-
ly between private own- 2. Full Employment
ty, Productivity and effi-
ers of factors of produc- The role of the budget 3. Invisible Hand
ciency.
tion and such transac- and fiscal policy did not 4. Taxation
9. Nature of the budget:
tions are free from gov- extend beyond raising 5. Public Expenditure
Private economic units
ernment restrictions, funds through taxation 6. Balanced Budget
aim at surplus budget.
taxation and subsidies. and spending on tradi- 7. Market Efficiency
Having a surplus is con-
Laissez faire policy advo- tional functions. The 8. Ricardian Equiva-
sidered economically pru-
cates market mechanism primary belief was that lence Theorem
dent. This is not the case
should be left tee of any the size of the govern- 9. Political View
with government budgets.
government interference. ment’s budget should be
In countries that need to
grow and develop rapidly,
deficit budgets need to be 1. Say’s Law: Like many others classical principles, the principle of sound finance is
followed. A long term sur- also based on Say’s Law, that is, “Supply creates its own demand.” Since one man’s
plus budget indicates that expenditure is another man’s income, aggregate demand will always be equal to aggre-
the government may not gate supply. This belief forms the base of the argument on which classical economists
be fulfilling some of its argued in favor of sound finance.
obligation. 2. Full employment: The economy cannot suffer from fluctuations like unemploy-
ment and inflation. Driven by profit motive, the private sector will ensure optimum use
of resources. Therefore, there will be full employment in the economy. Only voluntary
and frictional unemployment may exist.

3. Invisible hand: Private owners of factors of production will always achieve maxi-
mum level of efficiency in their use of resources, as they are driven by self-interest and
profit motive. The concept of Adam Smith’s ‘invisible hand’ is used to explain how pri-
vate self-interest will result in collective social good.
4. Taxation: According to the classical school of thoughts, taxes are harmful be-
cause they adversely affect willingness and ability to work, save and invest. Taxation
was expected to be kept at a minimal limit. High progressive taxation will lead to slow
economic progress. Redistributive effects of taxation were ignored.
5. Public expenditure: Government spending was expected to be in the traditional
areas like defense, law and order, justice, provision of civic amenities. Since govern-
ment budget was not expected to be large in size, government spending was not large
relative to total spending in the economy. Therefore, it was believed that government
spending would not have any significant impact on the economy.

6. Balanced Budget: In laissez faire capitalism, since all factors of production are
normally owned and used by private individuals, the government can make use of
such factors only by depriving the private sector. Therefore, there is no justification
for the government to expand its expenditure beyond revenue and incur deficit budg-
et. Budget should always balance except during wartime when government will have
to expand expenditure to fight war. The state should not take up business activities
because the private sector is considered to be most efficient.
7. Market efficiency: The market mechanism is assumed to achieve maximum
level of efficiency. Market failures are only temporary and the market is fully capable
of correcting itself. Therefore, there is no justification of any government regulation
and restrictions on the market. The use of the budget to correct market failures was
not considered.
PUBLIC FINANCE
8. Ricardian Equivalence Theorem: Budget deficits are uneconomical, harmful
and socially undesirable. They lead to inflation and harm economic progress. This
belief was based on Ricardian Equivalence Theorem. Deficits will have to be later
 PAGE 6
“The time to repair the
met by raising taxes. This is known to the people and they will increase their savings to roof is when the sun
pay higher taxes later. As their savings increase, they will not increase consumption
and therefore, increased public expenditure will not be able to boost demand, produc- is shining.” President
tion and stimulate growth. John F. Kennedy

9. Political View: Sound finance is compatible with a political system that supports private ownership and
minimizes government’s role. Generally, ideologically the conservative parties believe in the principle of
sound finance while the more liberal parties support functional finance. However, in practice most govern-
ments have been observed to follow functional finance.

Major Sources of Funds to Finance National Budget

The national budget is fi- fer of real or personal proper- Bank for Reconstruction Develop-
nanced form the following ty. ment (IBRD), Overseas Economic Co-
fund sources: c) Taxes on domestic goods and operation Fund (OECF), etc. Foreign
1) Revenues from both tax services - are imposed on the borrowings can be obtained through
and non-tax sources; use or sale of locally manufac- loans secured from foreign financial
2) 2) Borrowings from both tured goods as well as local institutions or through the flotation
domestic and foreign services availed of within the of government securities in the inter-
sources; and, domestic territory. national market.
3) Others d) Taxes on international trade
and transactions - include im- The government borrows from any of
1. Revenues refer to all cash port and customs duties, and the following reasons:
inflows of the national gov- other international trade- • To finance national government
ernment treasury which related collections of the gov- deficits;
are collected to support ernment.  To obtain foreign exchange;
government expenditures e) Other sources - taxes primari-  To secure financing at more
but do not increase the ly include collections from the
favorable terms than the
liability of the NG. Reve- motor vehicles tax, immigra-
opportunity cost of revenues;
nues consist of tax and tion tax and forest charges.
non-tax collections.  To take advantage of bene
fits attached to the funds, e.g.
A tax is a compulsory contri- Non-tax revenues refer to all oth-
technology; and,
bution mandated by law and er impositions or collections of
exacted by the government for the government in exchange for  To balance the timing of re
a public purpose. The major services rendered, assets con- sources with the project
tax collecting agencies of the veyed, penalties imposed, etc. gestation and repayment of
national government are the benefit.
Bureau of Internal Revenue 2. Borrowings refer to funds ob-
and the Bureau of Customs. tained from repayable sources, 3. Others – include Subsidies,
such as loans secured by the gov- grants, and other social benefits in-
The major classes of tax reve- ernment from financial institu- clude all unrequited, non-repayable
nue are: tions and other sources, both do- transfers on current account to pri-
mestic and foreign, to finance vate and public enterprises; grants to
a) Taxes on income and prof- various government projects and foreign governments, international
its - are imposed on all activities. organizations, and other government
taxable income earned or units; and social security, social as-
received by a taxpayer, Domestic borrowings are funds sistance benefits, and employer so-
whether as an individual, obtained from sources within the cial benefits in cash and in kind.
as a partnership, or as a country. Domestic borrowings of
corporation, during a par- the national government are usu-
ticular period of time, usu- ally made through the auction of
ally lasting one year. treasury bills, notes and bonds to
b) Taxes on property - are the public. Foreign borrowings,
imposed on the ownership on the other hand, are funds ob-
of wealth or immovable tained from sources outside the
property levied at regular country, such as Asian Develop-
intervals and on the trans- ment Bank (ADB), International
 PAGE 7
Structure of the Philippine Government Expenditure
Government expenditure is ters. Others examples one area of an economy
a term used to describe mon- include programs such as to another. As a govern-
ey that a government spends. health care and housing ment receives wealth
Expenditure occurs on every assistance for disabled or through taxes and loans,
level of government, from lo- severely low-income citi- it has the opportunity to
cal city councils to national zens. Public education funnel some of that mon-
organizations. There are sev- and public transportation ey into focused programs
eral different types of govern- infrastructure are other for certain segments of
ment expenditure, including main categories of this the population. Some gov-
the purchase and provision of form of government ex- ernment offered financial
goods and services, invest- penditure. aid, such as student
ments, and money transfers. loans, may be considered
In a free market economy, not Another form of govern- a transfer payment. Gov-
all basic needs are generally ment expenditure is akin ernment retirement
met by the private sector. to investing, though for- funds, such as social se-
Some goods or services may mally referred to as gross curity, are also consid-
not be produced at all, while fixed capital formation. ered transfer expendi-
others may be not being pro- This involves the creation tures.
duced in enough quantity or and support of systems Government expenditure
at an affordable rate for all and institutions that are is financed through a va-
citizens. Much of government seen as assets to the pro- riety of methods. Most
expenditure is involved in the ducing value of the coun- often, governments use
creation and implementation try. Subsidization of taxes to fund programs
of these goods and services. farms is one of the major and expenditures, but
This type of government forms of this type of ex- this is far from the only
spending is referred to as gov- penditure, since by pro- means of creating assets
ernment final consumption. ducing food, farms pro- for spending. Many gov-
Some examples of government vide for one of the largest ernments engage in defi-
final consumption include the needs of any society. The cit spending, where gov-
creation and maintenance of building of new road sys- ernment may borrow
the military, police, emergen- tems, bridges, and air- based on future projected
cy, and fire fighting organiza- ports are also major are- budgets in order to fund
tions. These are funded by as of this type of spend- programs. Governments
national and local govern- ing. may also choose to take
ments, in order to provide for Transfer payments refer loans from foreign coun-
both the safety of the country to expenditures that in tries to finance expendi-
from attack, and the safety of effect move money from ture.
citizens from crime and disas-

Patterns and Trends of Expenditures

T h e level of expendi- cation, employment, and are:
tures of the Philippine govern- health to the country’s
The growth in popula-
ment has increased apprecia- rapidly expanding popula-
tion
bly through the years. It is tion, or the imperative
Inflation (or increase
not only the average rate of need for improving the
in the prices of
growth of public expenditures standard of living of the
goods and services
which is high but, more im- people. In effect, these ex-
purchased by the
portant, the pace of such penditures are all directed
government)
growth has been faster in to the harnessing and ex-
The increasing de-
years. The increasing demand ploitation of available re-
mand for econom-
of people for more and better sources for speedy growth.
ic and social de-
government services, the ur-
In this country, the major velopment pro-
gent necessity of providing
factors affecting the in- jects.
food, clothing, housing, edu-
creasing expenditure trend

DSWD’s Social Ameliora-

tion Program

Ctto Department of Budget and Management

PUBLIC
FMPR ELEC 105 PAGE 8

Expenditures and Functions

Economic Services
(Kagawaran ng Ugnayang Panlabas) is the executive department of the Philippine
government tasked to contribute to the enhancement of national security and the
protection of the territorial integrity and national sovereignty, to participate in the
national endeavor of sustaining development and enhancing the Philippines' compet-
itive edge, to protect the rights and promote the welfare of Filipinos overseas and to
mobilize them as partners in national development, to project a positive image of the
DEPARTMENT OF Philippines, and to increase international understanding of Philippine culture for
AGRICULTURE mutually-beneficial relations with other countries.

(Kagawaran ng Repormang Pansakahan), abbreviated as DAR, is the executive de-

partment of the Philippine government responsible for all land reform programs in
the country.
It is is the lead government agency that holds and implements comprehensive and
genuine agrarian reform which actualizes equitable land distribution, ownership,
agricultural productivity, and tenurial security for, of and with the tillers of the land
DEPARTMENT OF
towards the improvement of their quality of life.
AGRARIAN REFORM

(Kagawaran ng Agham at Teknolohiya), abbreviated as the DOST, is the executive

department of the Philippine Government responsible for the coordination of sci-
ence and technology-related projects in the Philippines and to formulate policies
and projects in the fields of science and technology in support of national develop-
ment.

DEPARTMENT OF
SCIENCE & TECHNOLOGY
 PAGE 9
Economic Services (continuation)
(Kagawaran ng Kapaligiran
(Kagawaran ng Kalakalan at In-
at Likas na Yaman) is the
dustriya), abbreviated as DTI is
executive department of the
the executive department of the
Philippine government re-
Philippine Government tasked to
sponsible for governing and
expand Philippine trade, indus-
supervising the exploration,
tries and investments as the
development, utilization,
DEPARTMENT OF means to generate jobs and
and conservation of the
ENVIRONMENT & NATURAL country's natural resources. DEPARTMENT OF raise incomes for Filipinos .
RESOURCES TRADE & INDUSTRY

(Kagawaran ng Enerhiya), abbreviat-

(Kagawaran ng Turismo) is the ed as DOE is the executive depart-
executive department of the Phil- ment of the Philippine Government
ippine government responsible responsible for preparing, integrat-
for the regulation of the Philip- ing, coordinating, supervising and
pine tourism industry and the controlling all plans, programs, pro-
promotion of the Philippines as jects and activities of the Govern-
a tourist destination. ment relative to energy exploration,
DEPARTMENT OF DEPARTMENT OF development, utilization, distribution
TOURISM ENERGY and conservation.

(Kagawaran ng Pagawaing (Kagawaran ng Teknolohiyang Pang

Bayan at Lansangan), abbrevi- -Impormasyon at Komunikasyon),
ated as DPWH, is the executive abbreviated as DICT is
department of the Philippine the executive department of
government responsible for all the Philippine govern-
safety of projects in the field of ment responsible for the planning,
public works. It is also responsi- DEPARTMENT OF development and promotion of the
DEPARTMENT OF ble for the maintenance of the country's information and commu-
INFORMATION &
Philippine road network and nications technology (ICT) agenda
PUBLIC WORKS & COMMUNICATIONS
irrigation system. in support of national development.
HIGHWAYS TECHNOLOGY

Social Services
(Kagawaran ng Paggawa at Empleyo)
(Kagawaran ng Edukasyon), is the (commonly abbreviated to "DOLE") is
executive department of the Philip- the executive department of the Philip-
pine government responsible for pine Government mandated to formu-
the management and governing of late policies, implement programs and
the Philippine system of basic edu- services, and serve as the policy-
cation. It is the chief formulator of coordinating arm of the Executive
Philippine educational policy and Branch in the field of labor and em-
is responsible for the Philippine ployment. It is tasked with the en-
DEPARTMENT OF DEPARTMENT OF
primary and secondary school forcement of the provisions of the
EDUCATION system. LABOR & EMPLOYMENT
Labor Code.

(Kagawaran ng Kalusugan) is the

principal health agency in the Philip-
pines. It is the executive department (Kagawaran ng Kagalingang Pan-
of the Philippine Government re- lipunan at Pagpapaunlad) is the ex-
sponsible for ensuring access to ecutive department of the Philippine
basic public health services to all Government responsible for the pro-
Filipinos through the provision of tection of the social welfare rights of
quality health care and the regula- DEPARTMENT OF Filipinos and to promote social de-
DEPARTMENT OF tion of providers of health goods and SOCIAL WELFARE & velopment.
HEALTH services. DEVELOPMENT
FMPR ELEC 105 PAGE 10

(Kagawaran ng Katarungan,
abbreviated as DOJ) is under It is also known by its acronym
the executive department of SUC refers to any public institu-
the Philippine govern- tions of higher learning that were
STATE
ment responsible for upholding
the rule of law in the Philip- UNIVERSITIES AND created it by an act passed by the
Philippine Congress, and is fully
pines. It is the government's COLLEGES subsidized by the national govern-
principal law agency, serving as ment. An SUC is also considered
DEPARTMENT OF its legal counsel and prosecu-
JUSTICE tion arm.

DEFENSE
(Kagawaran ng Tanggulang Pambansa) (KTP) is the executive department of the Philippine gov-
ernment responsible for guarding against external and internal threats to peace and security in
the country.
1. DND Proper (Office of the Secretary) - It is headed by the Secretary of National Defense,
who is a member of the President's cabinet.
2. Armed Forces of the Philippines – (Sandatahang Lakas ng Pilipinas) is composed of the Phil-
ippine Army, Philippine Navy and Philippine Air Force. The AFP is a volunteer force and has
a total active strength of 125,000 with more than 130,000 personnel in reserve service.
i. General Headquarters, AFP & AFP Wide Service Support Units (AFPWSSUS)
ii. Philippine Air Force (Air Force)
iii. Philippine Army (Land Forces)
DEPARTMENT OF iv. Philippine Navy (Naval Forces)
NATIONAL 3. Government Arsenal - is an agency of the Philippine government under the Department of
DEFENSE National Defense, responsible for the production of basic weaponry and ammunition for
the Armed Forces of the Philippines (AFP), and the Philippine National Police
(PNP), among others, and for the sale and export of products in excess of AFP/PNP
requirements.

GENERAL PUBLIC SERVICES

(Kongreso ng Pilipinas) is the national legislature of the Republic of the Philippines. It is a bi-
cameral body consisting of the Senate (upper chamber), and the House of Representatives
(lower chamber) although commonly in the Philippines the term congress refers to the lat-
ter.The Senate is composed of 24 senators half of which are elected every three years. Each
senator, therefore, serves a total of six years. The House of Representatives is composed of a
maximum of 250 congressmen. There are two types of congressmen: the district and the sec-
toral representatives. The district congressmen represent a particular geographical district of
the country. The sectoral congressmen represent the minority sectors of the population. Also
CONGRESS OF THE known as party-list representatives, sectoral congressmen represent labor unions, rights
PHILIPPINES groups, and other organizations.

(Pangalawang Pangulo ng Pilipinas,

(Pangulo ng Pilipinas) is the head of informally, "Ang Pangalawang Pangu-
state and head of government of the lo" or "Bise Presidente" derived from
Philippines. The president leads the Spanish. It is the second-highest exec-
executive branch of the Philippine utive official of the government of the
government and is the commander- Philippines, after the President. The
in-chief of the Armed Forces of the official residence and office of the Vice
Philippines. Office of the President of the Philippines is the
Office of the
Coconut Palace, CCP Complex, Pasay.
President Vice-President
 PAGE 11

(Kagawaran ng Ugnayang Panlabas) is the execu-

(Kagawaran ng Pagbabadyet at Pa-
tive department of the Philippine government
mamahala) is an executive body tasked to contribute to the enhancement of nation-
under the Office of the President of al security and the protection of the territorial
the Philippines. It is responsible for integrity and national sovereignty, to participate in
the sound and efficient use of gov- the national endeavor of sustaining development
ernment resources for national de- and enhancing the Philippines' competitive edge, to
velopment and also as an instru- protect the rights and promote the welfare of Filipi-
nos overseas and to mobilize them as partners in
DEPARTMENT OF ment for the meeting of national
socio-economic and political devel- DEPARTMENT OF national development, to project a positive image of
BUDGET & the Philippines, and to increase international un-
opment goals. FOREIGN
MANAGEMENT derstanding of Philippine culture for mutually-
AFFAIRS beneficial relations with other countries

(Kagawaran ng Pananalapi) is the executive

department of the Philippine government re-
sponsible for the formulation, institutionaliza-
tion and administration of fiscal policies, man-
agement of the financial resources of the gov-
ernment, supervision of the revenue operations
of all local government units, the review, ap-
proval and management of all public sector
DEPARTMENT debt, and the rationalization, privatization and
public accountability of corporations and as-
OF sets owned, controlled or acquired by the gov-
FINANCE ernment.

(Kawanihan ng Adwana) is a bureau of the

Philippines' Department of Finance in charge of
imports, exports, and foreign trade. BoC is
(Kawanihan ng Rentas Internas) is an specifically mandated to 1) assess and collect
attached agency of Department of lawful revenues; 2) prevent smuggling and oth-
Finance. BIR collects more than one- er frauds; 3) control vessels and aircrafts en-
gaged in foreign trade; 4) enforce tariff and
half of the total revenues of the gov-
customs laws; 5) control the handling of for-
ernment.
BUREAU OF eign mails for revenues and prevention pur-
BUREAU OF poses; 6) control import and export cargoes;
INTERNAL
CUSTOMS and lastly, 6)it is given jurisdiction over forfei-
REVENUE ture and seizure cases.

It is one of the bureaus under the Philippines' Department of Finance. The

BTr is mandated to 1) assist in the formulation of policies on borrowing,
investment and capital market development; 2) formulate adequate opera-
tional guidelines for fiscal and financial policies; 3) assist in the preparation
by government agencies concerned of an annual program, for revenue and
expenditure targets, borrowing levels and cash balances of National Govern-
ment; 4) maintain books of accounts of the NG cash transactions; 5) man-
age cash resources of NG, collect advances made, and guarantee and for-
BUREAU OF ward cover fees due NG; 6) control and service NG public debt, both foreign
TREASURY and domestic; 7) issue, service, redeem government securities for account of
NG as may be authorized by the President pursuant to law.

(Kagawaran ng Ugnayang Panlabas) is the execu-

tive department of the Philippine government
tasked to contribute to the enhancement of na-
tional security and the protection of the territorial (Kagawaran ng Interyor at Pamaha-
integrity and national sovereignty, to participate in laang Lokal) is the executive depart-
the national endeavor of sustaining development ment of the Philippine Government
and enhancing the Philippines' competitive edge, responsible for promoting peace and
to protect the rights and promote the welfare of order, ensuring public safety, and
Filipinos overseas and to mobilize them as part- DEPARTMENT OF
DEPARTMENT strengthening the capabilities of local
ners in national development, to project a positive
INTERIOR & government units. It is also responsible
OF FOREIGN image of the Philippines, and to increase interna-
tional understanding of Philippine culture for LOCAL for the Philippine National Police.
AFFAIRS mutually-beneficial relations with other countries. GOVERNMENT
FMPR ELEC 105 PAGE 12
Social Services (continuation)
It is in charge of disseminating the govern-
ment’s message to private media entities. It
exercises supervision and control over state
(Pambansang Pangasiwaan sa -owned media entities, to ensure the proper
Kabuhayan at Pagpapaunlad), ab- and effective dissemination of the official
breviated as NEDA, is an independ- messages in accordance with the Commu-
ent cabinet-level agency of the Phil- nications Plan. It is responsible for the
ippine government responsible for accreditation and authentication of the
NATIONAL PRESIDENTIAL credentials of foreign media correspond-
ECONOMIC & economic development and plan-
COMMUNICATIONS ents, in line with its primary task to culti-
ning.
DEVELOPMENT OPERATIONS vate relations and provide the necessary
assistance to private media entities.
AUTHORITY OFFICE

It is a government agency that is con- It is an independent constitutional

stituted by legislature to regulate the commission established by the Con-
employment and working conditions stitution of the Philippines. It has the
of civil servants, oversee hiring and primary function to examine, audit
promotions, and promote the values and settle all accounts and expendi-
of the public service. Its role is rough- tures of the funds and properties of
ly analogous to that of the human the Philippine government.
CIVIL SERVICE resources department in corporations. COMMISSION
COMMISSION ON AUDIT

It is an independent Constitutional
It is the system of courts that inter-
Commission mandated to give life and
prets and applies the law in the name
meaning to the basic principle that
of the state. The judiciary also pro-
"sovereignty resides in the people and
vides a mechanism for the resolution
all government authority emanates
of disputes.
from them."
COMMISSION ON THE JUDICIARY
ELECTIONS

DEBT SERVICING

Debt service - refers to the sum of debt amortization and interest payments on foreign and domestic
borrowings of the national government or the public sector. Debt services must, therefore, be limited
to an amount commensurate with our capacity to pay; what our economy can afford without sacrific-
ing in any manner the larger concern - the raising of our people’s standard of life and living, the allevi-
ation of poverty, generation of more productive employment, promotion of Equity and Social justice
and attainment of sustainable economic growth.
 PAGE 13
LET’S LEARN
AND PLAY

WORD SEARCH
A D T V L O G O D L E
Search for the
following terms: B B O B F P O V S O X
P U B L I C U B O V P
Public P D S W N O O I C E E
Finance
Budget L G C T A X A T I O N
Social A E E N N L I M A L D
Taxation
Expenditure N T N O C O J V L A I
Act E N D D E B T I B L T
Debt G A A B O I L E R E U
GAA
Private M C I U Q W R S I D R
P T L O P R I V A T E

LET’S GET IT
DONE

Create a Concept Map on the

Revenue Sources and
Expenditures

What’s a concept map? Read this paragraph and look at the sam-
ple concept map and get ready to create your own Concept Map on
the Revenue Sources and Expenditures of the

A concept map is a visual organization and repre-

sentation of knowledge. It shows concepts and ide-
as and the relationships among them. You create a
concept map by writing key words (sometimes en-
closed in shapes such as circles, boxes, triangles,
etc.) and then drawing arrows between the ideas
that are related. Then you add a short explanation
by the arrow to explain how the concepts are relat-
ed.
 PAGE 14

RUBRIC FOR CONCEPT MAP

LET’S REIN-
Create a Reflective essay on the Budget Priorities of FORCE YOUR
GAA 2020 and the proposed Budget for 2021. Please LEARNING
check the attached file on the next pages.

RUBRIC FOR REFLECTIVE ESSAY

https://www.rcampus.com/rubricshowc.cfm?
PAGE 15
PAGE 16
PAGE 17
PAGE 18
 PAGE 19

REFERENCES
Hyman, D. (2010). Public Finance: A Contemporary Application of Theory to Policy, 10E. North Carolina State Uni-
versity (Copyright 2010).

DBM, (2020). General Appropriations Act. Retrieved from https://dbm.gov.ph/index.php/dbm-publications/

general-appropriations-act-gaa

DBM, (2020). Briefer on the 2020 budget priorities framework. Retrieved from https://www.dbm.gov.ph/
index.php/budget-documents/2020/2020-budget-priorities-framework

DBM, (2021). Briefer on the 2021 budget priorities framework. Retrieved from https://www.dbm.gov.ph/
index.php/budget-documents/2021/2021-budget-priorities-framework

The Learner Center (2020). Concept Maps. University of North Carolina at Chapel Hill. Retrieved from https://
learningcenter.unc.edu/tips-and-tools/using-concept-maps/