Midterm Exam Flashcards by King David Ostan

What consists of Public Finance in the Philippine Setting?

• Economics
• Government

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refers to the income and expense of the government in the pursuit of national objectives. It involves the inflow of financial resources in the form of taxes and other revenues, and the outflow of such resources in the form of expenditure to finance goods and services.

Public Finance

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What is the process of Public Finance in the Philippines?

Formulation of fiscal and monetary policy
Generation of revenue from taxation and other sources
Expenditure of funds through the national budget
Public borrowings
Accountability

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refers to policies on taxation and other revenue, expenditure, and borrowings that are intended to promote the stabilization and development of the economy.

Fiscal Policy

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influences the level of money supply in the economy.

Monetary Policy

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refers to all cash inflows of the national government (NG) treasury which are collected to support government expenditures but do not increase the liability of the NG

Revenue

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which is considered the main source of the national budget is a compulsory contribution mandated by law and exacted by the government for a public purpose. The major tax collecting agencies of the national government are the Bureau of Internal Revenue and the Bureau of Customs.

Tax

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Expenditure of funds shall be in accordance with the budgetary procedures which include preparation and presentation, authorization, execution, and budget accountability. This phase covers the estimation, determination and translation of government revenues, priorities and activities.
Government entities prepare their budgets for the year to be submitted to the Department of Budget and Management (DBM) for review. The DBM then consolidates all budgets to form a government wide budgeting estimate, the “National Budget”. This shall be submitted to the president for final approval.

Expenditure of Funds through the national budget

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The funds obtained from repayable sources such as loans secured by the government from financial institutions and other sources, both domestic and foreign, to finance various government projects and activities considered as?

Public Borrowings

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a condition in which individuals who exercise power are constrained by external means and by internal norms. It refers to the institution of checks and balances in an organization thru which an administrator accounts for his stewardship of resources or authority.

Accountability

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The accountability of public officers and employees is enshrined in this law which states:

Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives.

1987 Constitution, Article 11, Section 1

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AN ACT ESTABLISHING A CODE OF CONDUCT AND ETHICAL STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES, TO UPHOLD THE TIME-HONORED PRINCIPLE OF PUBLIC OFFICE BEING A PUBLIC TRUST, GRANTING INCENTIVES AND REWARDS FOR EXEMPLARY SERVICE, ENUMERATING PROHIBITED ACTS AND TRANSACTIONS AND PROVIDING PENALTIES FOR VIOLATIONS THEREOF AND FOR OTHER PURPOSES

REPUBLIC ACT NO. 6713
Code of Conduct and Ethical Standards for Public Officials and Employees

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Public officials and employees shall always uphold the public interest over and above personal interest. All government resources and powers of their respective offices must be employed and used efficiently, effectively, honestly and economically, particularly to avoid wastage in public funds and revenues.

Commitment to Public Interest

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Public officials and employees shall perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill. They shall enter public service with utmost devotion and dedication to duty. They shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of undue patronage.

Professional

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Public officials and employees shall remain true to the people at all times. They must act with this and shall not discriminate against anyone, especially the poor and the underprivileged. They shall at all times respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest. They shall not dispense or extend undue favors on account of their office to their relatives whether by consanguinity or affinity except with respect to appointments of such relatives to positions considered strictly confidential or as members of their personal staff whose terms are coterminous with theirs.

Justness and Sincerity

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Public officials and employees shall provide service to everyone without unfair discrimination and regardless of party affiliation or preference.

Political Neutrality

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Public officials and employees shall extend prompt, courteous, and adequate service to the public. Unless otherwise provided by law or when required by the public interest, public officials and employees shall provide information of their policies and procedures in clear and understandable language, ensure openness of information, public consultations and hearings whenever appropriate, encourage suggestions, simplify and systematize policy, rules and procedures, avoid red tape and develop an understanding and appreciation of the socioeconomic conditions prevailing in the country, especially in the depressed rural and urban areas.

Responsiveness to the Public

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Public officials and employees shall at all times be loyal to the Republic and to the Filipino people, promote the use of locally produced goods, resources and technology and encourage appreciation and pride of country and people. They shall endeavor to maintain and defend Philippine sovereignty against foreign intrusion

Nationalism and Patriotism

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Public officials and employees shall commit themselves to the democratic way of life and values, maintain the principle of public accountability, and manifest by deeds the supremacy of civilian authority over the military. They shall at all times uphold the Constitution and put loyalty to country above loyalty to persons or party

Commitment to democracy

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Public officials and employees and their families shall lead modest lives appropriate to their positions and income. They shall not indulge in extravagant or ostentatious display of wealth in any form

Simple Living

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Every public official and employee shall observe the following as standards of personal conduct in the discharge and execution of official duties:

Section 4. Norms of Conduct of Public Officials and Employees

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In the performance of their duties, all public officials and employees are under obligation to:

Section 5. Duties of Public Officials and Employees

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All public officials and employees shall, within fifteen (15) working days from receipt thereof, respond to letters, telegrams or other means of communications sent by the public. The reply must contain the action taken on the request.

Act Promptly on letters and request

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All heads or other responsible officers of offices and agencies of the government and of government-owned or controlled corporations shall, within forty-five (45) working days from the end of the year, render a performance report of the agency or office or corporation concerned. Such report shall be open and available to the public within regular office hours

Submit annual performance reports

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All official papers and documents must be processed and completed within a reasonable time from the preparation thereof and must contain, as far as practicable, not more than three (3) signatories therein. In the absence of duly authorized signatories, the official next-in-rank or officer-in-charge shall sign for and in their behalf.

Process documents and papers expeditiously

All public officials and employees must attend to anyone who wants to avail himself of the services of their offices and must, at all times, act promptly and expeditiously.

Act immediately on the public's personal transactions

All public documents must be made accessible to, and readily available for inspection by, the public within reasonable working hours.

Make documents accessible to the public

is the act of managing incoming and outgoing monetary transactions and budgets for governments, educational institutions, non-profit organizations, and other public service entities.

Fiscal Administration

refers to the measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals. - is the government's policy on the generation of its resources through taxation and/or borrowing, as well as the setting of the level and allocation of expenditures.

Fiscal Policy

What are the components of Fiscal Policy?

• Revenue policy • Expenditure policy • Debt management policy

Revenue is defined as cash flow which does not increase the liability of the government. Revenues of the government include both domestic and external revenue, and borrowings. Government's policy in raising revenues is rooted on the "ability to pay" concept. Revenue generation must be equitable and efficient. It must be administratively feasible to implement, and projections should be realistic.

Revenue Policy

are compulsory charges or levies imposed by government on goods, services, transactions, individuals, entities, and others, arising from the sovereign power of state. Examples of these are the income tax, sales tax, and import duties.

Tax Revenues

These are collected from sources other than compulsory tax levies, including those collected for direct services rendered by government agencies to the public. They can also arise from the government's regulatory and investment activities. Examples cover fees and charges, Treasury income, privatization proceeds and foreign grants.

Non-Tax Revenues

The government views expenditures as a tool for effectively implementing public policy. Funds are disbursed for the efficient delivery of services to the public and to help in economic growth by supporting priority sectors. The government allocates funds in the most efficient and effective way to ensure rational and equitable resource allocation.

Expenditure Policy

It is the policy of the government to attain a manageable debt level. This is one where the country can afford to pay its maturing liabilities as scheduled. Borrowings are incurred to finance development projects. The government also incurs borrowing to fund priority programs and projects.

Debt Management Policy

This reflects the government's financial condition for the year. This summarizes total revenue collections and expenditures, and the resulting surplus or deficit. This may result in a balanced budget, a budgetary surplus or a budgetary deficit.

Fiscal Position of the Government

This composed of the national government, the local governments, the Bangko Sentral ng Pilipinas, the social security institutions and the government owned and/or controlled corporations. These sectors complement each other, and they collectively employ their capabilities to speed up development. In preparing the fiscal program, all the financial transactions of these sectors are summed up to generate the consolidated public sector resources.

Public Sector

The fiscal policies and program are formulated and implemented by the following:

• Development Budget Coordination Committee • Implementing agencies • Congress • Commission on Audit

It's the Committee tasked to estimate revenues and recommend sources of financing. It determines and recommends the annual government expenditure program and the sectoral and activity ceilings, including the allocation between operating and capital outlay expenditures. As a fiscal body, it formulates policies governing revenues, expenditures, and debt management.

Task of Development Budget Coordination Committee (DBCC)

The DBCC is composed of?

• NEDA Director General • Representative from the office of President • Governor of BSP • Secretaries of Finance and Budget and Management. (Serves as chairman)

Recommend for Presidential approval the level of the annual government expenditure program and the ceiling of government spending for economic and social development, national defense, general government and debt service; Recommend to the President the proper allocation of expenditures for each development activity between current operating expenditures and capital outlay; and Recommend to the President the amount set to be allocated for capital outlay under each development activity for various capital or infrastructure projects.

Functions of the DBCC

What is the responsibilities of DBM, DOF, NEDA, AND Office of the President as members of DBCC?

DBM - resource allocation and management DOF – revenue generation and debt management NEDA - overall macroeconomic policy OP - Presidential oversight

This is primarily responsible for policy direction over money, banking, and credit. It provides controls in the supply of and demand for money through bonds and borrowings. It promotes and maintains monetary stability and the convertibility of the peso. Moreover, they supervise the operations of banks and exercises regulatory powers pursuant to RA No. 7653.

Bangko Sentral ng Pilipinas

a government institution that formulates fiscal policy. Carrying out its basic function of revenue generation to ensure adequate financing for the needs of the country has led to an expansion of their role over time.

Department of Finance

Below are the Bureaus, Agencies and Government Corporations under the supervision of DOF

• PHILIPPINE TAX ACADEMY (PTA) • BUREAU OF INTERNAL REVENUE (BIR) • BUREAU OF CUSTOMS (BOC) • BUREAU OF TREASURY (BTR) • BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF) • INSURANCE COMMISSION (IC) • NATIONAL TAX RESEARCH CENTER (NTRC) • CENTRAL BOARD OF ASSESSMENT APPEAL (CBAA) • PHILIPPINE GUARANTEE CORPORATION (PHILGUARANTEE) • PRIVATIZATION AND MANAGEMENT OFFICE (PMO) • SECURITIES AND EXCHANGE COMMISSION (SEC)

It's the principal custodian of all national government funds. It manages the cash resources and services public debts from domestic or foreign sources, among others.

Bureau of Treasury

responsible for formulating and implementing the national budget and ensuring the efficient and sound utilization of government funds and resources.

Department of Budget and Management

It's the planning agency of the government. It is responsible for formulating annual and medium-term public investment programs. It programs official development assistance in the form of grants and concessional loans from foreign governments and multilateral agencies.

National Economic and Development Authority (NEDA)

What is the role of Bureau of Internal Revenue, Bureau of Customs, Land Registration Commission, and other regulatory offices in Fiscal Policy Setting?

Mandated to raise revenues

What is the role of Bureau of Treasury In the Fiscal Policy Setting?

Mandated to manage debt

What is the role of the rest of agencies in the Fiscal Policy Setting?

Mandated to implement expenditure policies

They provide the legal framework for the implementation of fiscal policies. They ensure that fiscal policy is not only sound but also implementable and realistic. They see to it that the level of macroeconomic indicators and parameters are achievable given present economic conditions.

Role of Congress in the Fiscal Policy Setting

ensures that agencies abide with the generally accepted rules and regulations in implementing their functions. They are also the agency that prepares the annual financial report of the government.

Role of the Commission on Audit (COA)

What is the section 1 title?

Local Government code of 1991

It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the local government units.

Section 2. Declaration of Policy

It is also the policy of the State to ensure the accountability of local government units through the institution of effective mechanisms of recall, initiative and referendum.

It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, nongovernmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions.

The provisions herein shall govern the exercise by provinces, cities, municipalities, and barangays of their taxing and other revenue-raising powers.

Section 128. Scope

Each local government unit shall exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government units.

Section 129. Power to create sources of revenue

Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows: (a) On the first year of the effectivity of this Code, thirty percent (30%); (b) On the second year, thirty-five percent (35%); and (c) On the third year and thereafter, forty percent (40%).

Allotment of Internal Revenue Taxes.

The share of local government units in the internal revenue allotment shall be allocated in the following manner: (a) Provinces - Twenty-three percent (23%); (b) Cities - Twenty-three percent (23%); (c) Municipalities - Thirty-four percent (34%); and (d) Barangays - Twenty percent (20%)

SECTION 285. Allocation to Local Government Units

What is the title 1?

Basic Principles

What is the title 3?

Shares of Local Government Units in the Proceeds of National Taxes

What is the title 5?

Local Fiscal Administration

The financial affairs, transactions, and operations of local government units shall be governed by the following fundamental principles:

Section 305. Fundamental Principles

(a) No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law;

Under section 305. READ THIS

(b) Local government funds and monies shall be spent solely for public purposes;

Under section 305. READ THIS

(c) Local revenue is generated only from sources expressly authorized by law or ordinance, and collection thereof shall at all times be acknowledged properly;

Under section 305. READ THIS

(d) All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law;

Under section 305. READ THIS

Trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for which the trust was created or the funds received;

Under section 305. READ THIS

(f) Every officer of the local government unit whose duties permit or require the possession or custody of local funds shall be properly bonded, and such officer shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law;

Under section 305. READ THIS

(g) Local governments shall formulate sound financial plans, and local budgets shall be based on functions, activities, and projects, in terms of expected results;

Under section 305. READ THIS

Local budget plans and goals shall, as far as practicable, be harmonized with national development plans, goals, and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources;

Under section 305. READ THIS

(i) Local budgets shall operationalize approved local development plans

Under section 305. READ THIS

(j) Local government units shall ensure that their respective budgets incorporate the requirements of their component units and provide for equitable allocation of resources among these component units:

Under section 305. READ THIS

(k) National planning shall be based on local planning to ensure that the needs and aspirations of the people as articulated by the local government units in their respective local development plans are considered in the formulation of budgets of national line agencies or offices;

Under section 305. READ THIS

(I) Fiscal responsibility shall be shared by all those exercising authority over the financial affairs, transactions, and operations of the local government units; and

Under section 305. READ THIS

(m) The local government unit shall endeavor to have a balanced budget in each fiscal year of operation.

Under section 305. READ THIS

refers to a financial plan embodying the estimates of income and expenditures for one (1) fiscal year;

Annual Budget

refers to an authorization made by ordinance, directing the payment of goods and services from local government funds under specified conditions or for specific purposes;

Appropriation

refers to the instrument used by the local chief executive to present a comprehensive financial plan to the sanggunian concerned;

Budget Document

refers to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the local government unit concerned, including investments in public utilities such as public markets and slaughterhouses;

Capital Outlays

refers to an appropriation available to support obligations for a specified purpose or projects, such as those for the construction of physical structures or for the acquisition of real property or equipment, even when these obligations are incurred beyond the budget year:

Continuing Appropriation

refers to appropriations for the purchase of goods and services for the conduct of normal local government operations within the fiscal year, including goods and services that will be used or consumed during the budget year;

Current Operating Expenditures

refers to the services, products, or benefits that shall accrue to the public, estimated in terms of performance measures or physical targets;

Expected Results

refers to a sum of money, or other assets convertible to cash, set aside for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations, and constitutes an independent fiscal and accounting entity,

Fund

refers to all revenues and receipts collected or received forming the gross accretions of funds of the local government unit;

Income

refers to an amount committed to be paid by the local government unit for any lawful act made by an accountable officer for and in behalf of the local government unit concerned;

Obligations

refers to appropriations for the payment of salaries, wages and other compensation of permanent, temporary, contractual, and casual employees of the local government unit;

Personal Services

refers to income realized from operations and activities of the local government or are received by it in the exercise of its corporate functions, consisting of charges for services rendered, conveniences furnished, or the price of a commodity sold, as well as loans, contributions or aids from other entities, except provisional advances for budgetary purposes;

Receipts

refers to income derived from the regular system of taxation enforced under authority of law or ordinance, and, as such, accrue more or less regularly every year.

Revenue

refers to the conduct and management of financial affairs, transactions, and operations of provinces, cities, municipalities and barangays. referred to as Local Fiscal Administration.

Local Public Finance

• All aspects of local taxation • Loan and its management • Operation of public enterprises • Revenue enhancement measures • Revenue planning, forecasting and accounting

Revenue Generation

Synchronized planning and budgeting system and processes Accounting and auditing of expenditures

Revenue Allocation and Utilization

• Property and supply management • Internal Control in all fiscal functions Organization • Computerization of systems related to public finance

Other Aspects

it can be the town or city mayor and the provincial governor - along with members of their respective local law- making bodies, the local finance committees and the local development councils, they are the officials tasked with the responsibility of raising, spending and managing local public funds and resources. members of law-making bodies, are directly elected by local voters (and therefore accountable to them), many more are merely appointed by the elected officials.

Local Chief Executive

approves the Annual Budget and supplemental budgets of the LGU. It also approves the local government's development and investment plans, which serve as guidelines in the preparation of the annual budget. is the local government's sole taxing authority.

Local Sanggunian

comes up with the estimates and targets for both income and expenditures that go into the preparation of the draft local government budget that is debated and approved by the Local Sanggunian. It plays such an important role that the Local Government Code mandated all LGUs to create a local finance committee. It is composed of the local planning and development officer, the local budget officer and the local treasurer.

Local Finance Committee

Local governments as political and territorial subdivisions of the State Provinces, cities, and municipalities are directly headed by a local chief executive (Governor for provinces, and Mayor for cities and municipalities) and a vice (Vice Governor; Vice Mayor) Each local government has a local legislative council called "Sanggunian" (Provincial Board; City/Municipal/Barangay Council) composed of councilors, with the Vice Governor/Vice Mayor/Punong Barangay serving as Presiding Officer Barangays are headed by a Chairman

Administrative Structure

Collects taxes, fees, charges, and other impositions of the L.GU; takes custody and exercises proper management of the funds of the LGU; takes charge of disbursing all LGU funds and such other funds that may be entrusted to him/her by law or other competent authority

Treasurer

Exercises the functions of appraisal and assessment, primarily for laxation purposes of all real properties in the LGU concerned

Assessor

Takes charge of the accounting and internal audit services of the LGU

Accountant

Provides budget administration services to the LGU

Budget Officer

Analyzes income & expenditure patterns,formulates and recommends fiscal plans & policies for consideration of the finance committee of the LGU

PLANNING & DEVELOPMENT OFFICER

• Members of the Sanguniang Barangay • Representatives organizalions (NGO) of non-govemment • Representative of the Congressman

Barangay

• All Barangay Chairman of the LGU • Chairman of the Committee of the Appropriations of the Sanggunian • Congressman or his/her representative Representatives of NGOs

City/Municipality

• All Mayors of components cities and municipalities • Chairman of the Committee on appropriation of the provincial sanggunian • Congressmen or their representatives • Representative of NGOs

Province

Midterm Exam Flashcards

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