Midterm Exam Flashcards
What consists of Public Finance in the Philippine Setting?
• Economics
• Government
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
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
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
influences the level of money supply in the economy.
Monetary Policy
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
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
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
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
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
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
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
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
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
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
Public officials and employees shall provide service to everyone without unfair discrimination and regardless of party affiliation or preference.
Political Neutrality
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
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
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
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
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
In the performance of their duties, all public officials and employees are under obligation to:
Section 5. Duties of Public Officials and Employees
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
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
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
