The budget is a detailed financial plan for the coming year covering all aspects of a

councils operations, and should reflect the resources generated by way of revenue and the

resources consumed by way of expenditure. (Education and Training Unit, 2003). A realistic

budget can be an effective instrument to improve the economic, political and social situations in

the municipality, especially its contribution to national development. 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 (Local Government Code, 1991). The local government unit shall

therefore endeavor to have a balanced budget in its fiscal year of operation. In other words,

disbursement of expenditures should not exceed the aggregate income realized or collected.

A public budget has four basic dimensions. First, it is a political instrument that allocates

scarce public resources among the social and economic needs of the jurisdiction. Second, a

budget is a managerial or administrative instrument; it specifies the ways and means of providing

public programs and services. Third, government budgets are an economic instrument that can

direct a jurisdictions economic growth and development. And fourth, a budget is an accounting

instrument that holds government officials responsible for the expenditure of the funds which

they have been entrusted (Shafritz, Russell & Borick, 2009).

Budgeting is a complex structure which needs some sort of multiple evaluation in order

to ascertain how effective it can be improved or sustained (Ungani, 2015). It is the process of

expressing the predicted costs and resources for a planned course of action over a specified time

period. It can be drawn up for business units, departments, products, teams or the entire

organization. The purposes of budgeting relate to planning and control, and supporting the

achievement of strategic plans by: translating the long-term plan into an annual work

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programmed, coordinating the various departments of the organization to ensure they are

working in harmony (Ross, 2008).

The budgetary system involves a lot of information process systems and involvement of

several resources management accounting system accumulates, classify, summarize and report

information that will assist employees within an organization in their decision making, planning

control and performance measurement activities (Drury, 2008). The effectiveness of budgetary

system is not a new concept in any organization. It is a necessary phenomenon as each

organization depends on it for effective operation.

Governments allocate scarce resources to programs and services through the budget

process. As a result, it is one of the most important activities undertaken by governments. As the

focal point for key resource decisions, the budget process is a powerful tool. The quality of

decisions resulting from the budget process and the level of their acceptance depends on the

characteristics of the budget process that is used (Government Finance Officers Association

[GFOA], 2000).

Rationale

As of the year 2010, there are 144 cities and 1490 municipalities. In the case of

municipalities as for the dignitaries are the position mayor, the vice mayor as well as the

members of the municipal legislative council (Philippine Statistics Authority [PSA], 2010).

The current economic, political and social situations of a local government unit demands

immediate solutions with vision and creativity to achieve a sense of decisive direction. It calls for

a close cooperation, coordination, total commitment and mutual effort of all the municipal

officials, heads of offices and rank and file employees. Under these circumstances, it is essential

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to create and implement a realistic budget which is conducive to the development of the locality

and the nation as a whole.

The Filipinos nowadays deserve a meaningful development, economically, socially and

politically. At this point, it appears more pertinent to approach the problem of government from

the level of local government administration where all the officials and employees would act

collectively towards a unified goal through a proper and effective system of budgeting to serve

as the core of the never-ending financial activities of the government.

Based on the above abstraction and in the name of peace and development, the

researchers deemed it imperative to conduct a study on the budgetary system of the Municipality

of Baliwag, Bulacan, the problem attendant to it and the extent of its contributions towards

effective local governance. It was believed that the results of the study would be useful in

ascertaining the municipalitys growth and development, on the premise that an effective

budgetary system could be a tool to sustain sound financial administration as a foundation for

more developed locality.

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 Figure 1. Map of Baliwag

Baliwag is a first class urban municipality in the Province of Bulacan, Philippines.

According to the latest census, it has a population of 149,954 inhabitants in 28,700 households.

Baliwag was founded on 1732 by Augustinian friars and was incorporated by the Spanish

Governor-General on 1733. The town was a part of Quingwa (now Plaridel) before. Through the

years of Spanish domination, Baliwag was predominantly agricultural. People had to depend on

rice farming for main source of livelihood. Orchards and tumanas yielded fruits and vegetables,

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which were sold in the public market. Commerce and industry also played important

contributions to the economy of the people.

Buntal hat weaving in Baliwag together with silk weaving popularly known in the world

as Thai silk; the manufacturer of cigar cases, pia fibers, petates (mats) and Sillas de Bejucos

(cane chairs) all of fine quality became known in many parts of the world. The local market also

grew. During the early part of the 19th century Baliwag was already considered one of the most

progressive and richest town of Bulacan. The growth of the public market has significantly

changed the mode of economy of the town. Baliwag is the major commerce, transportation,

entertainment and educational center of Northern Bulacan. With the continuous expansion of

Metro Manila, the municipality is now part of Manilas built up area which reaches San

Ildefonso in its northernmost part.

1.1 Significance of the Study

The researchers contend that this study is valuable for the municipal officials, heads of

offices, rank and file employees, local governments and future researchers. For the municipal

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. For the

local governments, this study would help them improve the budgetary system according to the

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needs inside and outside the organization and to be able to adapt to changes that can affect the

budget. 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 status, problems encountered, and benefits derived by the

budgeting system and practices of the municipality of Baliwag, Bulacan as perceived by the

municipal officials, the heads of offices, and the municipal employees.

It was limited to the perceptions of the municipal 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 included to those who will be the respondents of the study as they might

not be aware of the variables involved due to their short and limited years of service. 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 limiting factor 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 that the

respondents would gain from the findings, thus gaining their support and cooperation.