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The Budgetary System of the Municipality of Baliwag Bulacan, 2017:

Implications to Local Government Administration

Submitted by:
Bautista, Jemverick D.S.
Bautista, Maricris P.
Dolleno, Florence Louise N.
Estrella, Katherine Joy C.
Manangu, Steven Mark D.
Santos, Ysa Ayen B.
Tuazon, Justine Y.

Submitted to:
Mr. Luisito V. Correa, CPA, CAT, MBA


This chapter discussed the nature of the Budgetary System of Municipality of Baliwag,
Bulacan. These include the background of the study, significance and scope and delimitations.

1.1 Background of the Study

The formal budgeting in the national government first began during the Commonwealth
Regime with the approval of Commonwealth Act No. 246, on December 17, 1936. As originally
conceived, the national budget is a management control for government expenditures and
receipts. The national government adopted performance budgeting in June, 1954 with the
enactment of Republic Act 992. Basically, the budgeting system in the Philippines follows the
performance budgeting approach. The innovations introduced by Presidential Decree No. 1177,
Budget Reform Decree of 1977 dated July 30, 1977, such zero-base budget analysis, long term
and medium term budgets, national resource budget, and others are approaches that have been
developed to achieve a more effective allocation of resources.
Although performance budgeting was introduced in the Philippines as early as 1954, the
government has not been able to fully implement it. The budget documents of past years
contained many features which belonged to the line budget system. The 1978 budget is the first
purely performance budget of the national government. The budget process of local government
units is undertaken by the local government units themselves under the concept of local
autonomy. Presidential Decree No. 447, the Decree on Local Fiscal Administration, signed on
June 3, 1974, governs the process and provides Ministry of Finance Review of Local Budgets.
This review process was transferred to the Ministry Budget by virtue of P.D. 1375 issued May
16, 1978, thus concentrating in one office all budget-related functions of government units and
thus representing the realization of the national budget concept.
Under P.D. 1405, issued on June 11, 1978, the Budget Commission was converted into
the Ministry of Budget, headed by the Minister of the Budget. Again on July 28, 1981, by virtue
of Executive Order No. 711 of the President of the Philippines, the Ministry of the Budget was
renamed Office of the Budget and Management. In the local government, there is direct linkage
of planning with budgeting. It can be observed in the following activities in the various phases in
the budgeting process. First, the plan is used to determine expenditure ceilings, to formulate the
function, project and activities and to determine cost estimates. Secondly, the plan is used to
verify consistency of the budget with the approved activities, goals and objectives. Then finally,
the plan is the basis for determining the activities to be undertaken during the period. This plan
sets the standards against which performance is measured.
Budgets are the link between resources and objectives, and are monetary records of the
goals to be achieved and the resources allocated to accomplish them. Municipal budgeting is a
highly complex enterprise that calls for simplification (Ibrahim and Proctor, 2012). In this era of
plunging municipal revenues, it has become imperative for municipal governments to use their
financial resources effectively and efficiently. Available municipal resources must be channeled
towards satisfying the critical needs of citizens as efficiently as possible; proper budgeting and
its effective implementation can play a vital role in this endeavor. Municipal budgeting requires
spending public monies based on decisions made by individuals in their roles as mayor, council
or board member, administrator, finance director, head of an operational department, and
(sometimes) citizens. These actors may also have personal agendas, which could lead to conflicts
of interest and the ensuing problematic issues of information asymmetry and moral hazard.
A budget is a detailed financial progress in which anticipated expenditures and
anticipated revenues, including receipts from borrowings, are itemized and exactly balanced. It is
prepared in advance of the fiscal year to which it applies. The local government unit must have a
sound financial administration for it to develop. It is through the systems of budgeting that a
municipality can exercise proper allocation of its resources to the unlimited programs, projects
and activities by prioritizing then according to need, thus enabling the local government unit to
control expenditures within its realized income.

1.2 Significance of the Study

The researchers contend that this study is valuable for the local officials and heads of
offices, rank and file employees, national government and future researchers. For the local
officials and heads of offices, this study would serve as a basis for planning and conceptualizing
problems geared towards the successful operation of the government of Baliwag, Bulacan and to
effect stronger coordination of their duties and responsibilities in structuring a more effective,
functional and realistic budget. For the rank and file employees, this study would serve as an
incentive for them to acquire more knowledge of the status of the municipality and a clearer
insight into its organization and operation that would create better understanding of, enthusiasm
in and commitment to the undertakings of the local government of which they are a part. And
lastly for the future researchers, this study would serve as imminent source for parallel matter of
study. It can help them to improve their future researches that may include variables that are the
same with of this research and updated references.

1.3 Scope and Delimitation

This study was focused on the statues, problems, and benefits of the budgeting system
and procedures of the municipality of Baliwag, Bulacan as perceived by the local officials, the
heads of offices, and the municipal employees.

It was limited to the perceptions of the local officials, heads of offices and employees of
the municipal government because they were the very people who know the inner working of the
government machinery. The contractual and provisional employees of the municipality were not
also included to those who will be the respondents of the study. It was also limited to the
calendar year 2017 to provide recent data on which to base future improvement.

The constraint that was foreseen as a deterrent to the success of the investigation was the
indifference of the subjects towards accomplishing a questionnaire for a study of this nature for
fear of probable repercussions. This was however averted by securing the official permit for the
conduct of the study from the Municipal Mayor. This enabled the researchers to explain the
purpose and importance of the study to the subjects and the benefits they would gain from the
findings, thus gaining their support and cooperation.