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technical studies; and councils and the National Science and Technology Plan and, in connection therewith, shall
be assisted by the Planning and Evaluation Service.
(11) Perform such other functions as may be provided by law.
Section 10. Sectoral Planning Councils. - There shall be five (5) sectoral planning
Section 4. Structural Organization. - The Department shall consist of the Office of the councils as follows:
Secretary, Undersecretaries and Assistant Secretaries, the Services, Inter-Council Review
Board, Sectoral planning Councils, Institutes and Regional Offices. The Secretary shall (1) Philippine Council for Industry and Energy Research and Development, for industry
have supervision and control of the Department except the Inter-Council Review Board and energy and mineral resources;
and the Sectoral Planning Councils over which he shall only exercise administrative
supervision. (2) Philippine Council for Health Research and Development for health;

CHAPTER 2 - Department Proper (3) Philippine Council for Agriculture, Forestry and Natural Resources Research and
Development, for agriculture and forestry resources;
Section 5. Office of the Secretary. - The Office of the Secretary shall consist of the
Secretary and his immediate staff. (4) Philippine Council for Aquatic and Marine Research and Development, for aquatic and
marine resources; and
Section 6. Undersecretaries. - The Secretary shall be assisted by three (3)
Undersecretaries, one for research and development, one for regional operations and one (5) Philippine Council for Advanced Science and Technology Research and Development,
for scientific and technical services. The Undersecretaries shall have supervision over the for advanced science and technology.
Institutes under their respective functional areas of responsibility.
Each of the councils shall be responsible, in its respective sector, for the formulation of
Section 7. Assistant Secretaries. - The Secretary shall also be assisted by three (3) strategies, policies, plans, programs and projects for science and technology development;
Assistant Secretaries. for programming and allocation of government and external funds for research and
development; for monitoring of research and development projects; and for the generation
CHAPTER 3 - Services of external funds.

Section 8. Services. - The Services of the Department shall consist of the following: Each council shall have a secretariat which shall be headed by an Executive Director who
shall be appointed by the President upon the recommendation of the Secretary.
(1) Planning and Evaluation Service, which shall be responsible for providing the
Department with efficient and effective services relating to planning, programs and project Section 11. Philippine Council for Industry and Energy Research and Development. - The
monitoring and development; Philippine Council for Industry and Energy Research and Development shall be under the
administrative supervision of the Department, and shall consist of the Secretary as
(2) Financial and Management Service, which shall be responsible for providing the Chairman and eight (8) members, as follows: Secretary of Trade and Industry, Secretary of
Department with efficient and effective staff advice and assistance on budgetary, financial, Transportation and Communications, Secretary of Public Works and Highways or their
and management improvement matters; designated Undersecretaries, and Executive Director of the Council Secretariat, and four
(4) representatives of the private sector in the field of industry and energy, who are chief
(3) Administrative and Legal Service, which shall be responsible for providing the executive officers of their respective companies in the field of industry or energy or are
Department with efficient and effective services relating to personnel, information, acknowledged leaders in their professions to be appointed by the President, in their
records, supplies, equipment collections, disbursement, security and custodial work, and personal capacity, upon recommendation of the Secretary, each of whom shall be for a
all legal matters. term of two (2) years; Provided, however, that the tenure of the members first appointed
by the President shall be as follows: two (2) for one (1) year and two (2) for two (2) years,
CHAPTER 4 - Board, Councils and Institutes as fixed in their respective appointments. The members shall serve and continue to hold
office until their respective successors shall have been duly appointed and qualified.
Section 9. Inter-Council Review Board. - There shall be an Inter-Council Review Board, Appointment to any vacancy in the Council shall be by the President and shall only be for
composed of the Secretaries or their designated Undersecretaries who are members of the the unexpired portion of the term of the predecessor.
sectoral planning councils under Sections 10, 11, 12, 13, 14, and 15, and shall be chaired Section 12. Philippine Council for Agriculture and Forestry Research and Development. -
by the Secretary of Science and Technology. The Philippine Council for Agriculture and Forestry Research and Development shall be
under the administrative supervision of the Department, and shall consist of the Secretary
The main function of the Board shall be to review the plans of the sectoral planning as Chairman and eight (8) members, as follows: Secretary of Agriculture and Food,
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Secretary of Natural Resources or their designated Undersecretaries, Chancellor of the Development. - The Philippine Council for Advanced Science and Technology Research
University of the Philippines at Los Baños, Administrator of the National Food Authority and Development shall be under the Administrative supervision of the Department and
and Executive Director of the Council Secretariat and three (3) representatives of the shall consist of the Secretary as Chairman and eight (8) members, as follows: Secretary of
private sector in the fields of agriculture or forestry, who are chief executive officers of Education, Culture and Sports or his designated Undersecretary, President of the
their respective companies in the field of agriculture or forestry or are acknowledged University of the Philippines System, two (2) representatives from the government sector,
leaders in their professions to be appointed by the President, in their personal capacity, and four (4) representatives from the private sector in the field of advanced science
upon recommendation of the Secretary, each of whom shall be for a term of two (2) years; research, all of whom shall be appointed by the President, in their personal capacity, upon
Provided, however, that the tenure of the members first appointed by the President shall be recommendation of the Secretary, each of whom shall serve for a term of two (2) years.
as follows: one (1) for one (1) year and two (2) for two (2) years, as fixed in their
respective appointments. The members shall serve and continue to hold office until their Section 16. Institutes. - The Institutes of the Department are the following, which shall be
successors shall have been duly appointed and qualified. Appointment to any vacancy in line in character: Industrial Technology Development Institute; Philippine Nuclear
the Council shall be by the President and shall only be for the unexpired portion of the Research Institute; Food and Nutrition Research Institute; Forest Products Research and
term of the predecessor. Development Institute; Philippine Textile Research Institute; Advanced Science and
Technology Institute; Science Education Institute; Science and Technology Information
Section 13. Philippine Council for Health Research and Development. - The Philippine Institute; and Technology Application Promotion Institute; Philippine Atmospheric,
Council for Health Research and Development shall be under the administrative Geophysical and Astronomical Services Administration, and Philippine Institute of
supervision of the Department, and shall consist of the Secretary as Chairman and eight Volcanology and Seismology. Each Institute shall be headed by a Director, who shall be
(8) members, as follows: Secretary of Health or his designated Undersecretary, Chancellor appointed by the President upon the recommendation of the Secretary and shall be assisted
of the University of the Philippines of Manila, Executive Director of the National by one or more Deputy Directors as may be necessary.
Nutrition Council, Executive Director of the Council Secretariat, and four (4)
representatives of the private sector in the field of health, who are chief executive officers Section 17. Industrial Technology Development Institute. - The Industrial Technology
of their respective companies in the field of health or are acknowledged leaders in their Development Institute shall have the following functions:
professions to be appointed by the President, in their personal capacity, upon
recommendation of the Secretary, each of whom shall be for a term of two (2) years; (1) Undertake applied research and development to develop technologies and
however, that the tenure of the members first appointed by the President shall be as technological innovations in the field of industrial manufacturing, mineral processing and
follows: two (2) for one (1) year and two (2) for two (2) years, as fixed in their respective energy;
appointments. The members shall serve and continue to hold office until their successors
shall have been duly appointed and qualified. Appointment to any vacancy in the Council (2) Undertake the transfer of research results directly to end-users or preferably via linkage
shall be by the President and shall only be for the unexpired portion of the term of the units of other government agencies;
predecessor.
(3) Undertake technical services, such as but not limited to, standards, analytical and
Section 14. Philippine Council for Aquatic and Marine Research and Development. - The calibration services mandated by law or as needed by industry; and
Philippine Council for Aquatic and Marine Research and Development shall be under the
administrative supervision of the Department, and shall consist of the Secretary as (4) Conduct training and provide technical advisory and consultancy services to industry
Chairman, and eight (8) members as follows: Secretary of Agriculture and Food, Secretary clientele and end-users.
of Natural Resources or their designated Undersecretaries, Executive Director of the
Council Secretariat, two (2) representatives from the academic/research institution and Section 18. Philippine Nuclear Research Institute. - The Philippine Nuclear Research
three (3) representatives from the private sector who are chief executive officers of their Institute shall have the following functions:
respective companies in the field of aquaculture or marine research or development or are
acknowledged leaders of their professions to be appointed by the President, in their (1) Conduct research and development on the application of radiation and nuclear
personal capacity, upon recommendation of the Secretary, each of whom shall be for a materials, processes and techniques in agriculture, food, health, nutrition and medicine and
term of two (2) years; Provided, however, that the terms of the members first appointed by in industrial or commercial enterprises;
the President shall be as follows: two (2) for one (1) year and the other three (3) for two
(2) years, as fixed in their respective appointments. The members shall serve and continue (2) Undertake the transfer of research reactors and other radiation facilities; and
to hold office until their successors shall have been duly appointed and qualified.
Appointment to any vacancy in the Council shall be by the President and shall only be for (3) License and regulate activities relative to production, transfer, and utilization of
the unexpired portion of the term of the predecessor. nuclear and radioactive substances.

Section 15. Philippine Council for Advanced Science and Technology Research and Section 19. Food Nutrition Research Institute. - The Food Nutrition Research Institute
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shall have the following functions: (1) Undertake science education and training;
(2) Administer scholarships, awards and grants;
(1) Undertake research that defines the citizenry's nutritional status, with reference (3) Undertake science and technology manpower development; and
particularly to the malnutrition problem, its causes and effects, and identify alternative (4) Formulate plans and establish programs and projects for the promotion and
solutions to them; development of science and technology education and training in coordination with
the Department of Education, Culture and Sports, and other institutions of learning
(2) Develop and recommend policy options, strategies, programs and projects, which in the field of science and technology.
address the malnutrition problem for implementation by the appropriate agencies; and
Section 24. Science and Technology Information Institute. - The Science and Technology
(3) Disseminate research findings and recommendations to the relevant end-users. Information Institute shall have the following functions:

Section 20. Forest Products Research and Development Institute. - The Forest Products (1) Establish a science and technology databank and library;
Research and Development Institute shall have the following functions: (2) Disseminate science and technology information; and
(3) Undertake training on science and technology information.
(1) Conduct applied research and development in secondary and tertiary processing for the
forest-based industry to generate information and technology which can improve the Section 25. Technology Application and Promotion Institute. - The Technology
utility value of wood and other forest products; Application and Promotion Institute (TAPI) whose primary responsibility is to serve as the
implementing arm of the Department in promoting the commercialization of technologies
(2) Undertake the transfer or completed researches directly to the end-users or via linkage and in marketing the services of the other operating units in the Department shall have the
units of other government agencies; following functions:

(3) Undertake technical services and provide training programs. (1) Undertake contract research, particularly at the pilot plant and semi-commercial stage;

Section 21. Philippine Textile Research Institute. - The Philippine Textile Research (2) Provide technical consultancy including engineering design services, patenting and
Institute shall have the following functions: licensing services; and

(1) Conduct applied research and development for the textile industry sector; (3) Provide grants and/or venture-financing for new and/or emerging projects.

(2) Undertake the transfer of completed researches to end-users or via linkage units for Section 26. Philippine Atmospheric, Geophysical and Astronomical Services
other government agencies; and Administration. - The Philippine Atmospheric, Geophysical and Astronomical Services
Administration shall have the following functions:
(3) Undertake technical services and provide training programs.
(1) Maintain a nationwide network pertaining to observation and forecasting of weather
Section 22. Advanced Science and Technology Institute. - The Advanced Science and and other climatological conditions affecting national safety, welfare and economy;
Technology Institute shall have the following functions:
(2) Undertake activities relative to observation, collection, assessment and processing of
(1) Undertake long-term researches to strengthen and modernize science and technology atmospheric and allied data for the benefit of agriculture, commerce and industry;
infrastructure;
(3) Engage in studies of geophysical and astronomical phenomena essential to the safety
(2) Conduct research and development work in the advanced fields of studies including and welfare of the people;
biotechnology and microelectronics; and
(4) Undertake researches on the structure, development and motion of typhoons and
(3) Complement the overall endeavor in the scientific field with intensive activities in the formulate measures for their moderation; and
computer and information technologies.
(5) Maintain effective linkages with scientific organizations here and abroad, and promote
Section 23. Science Education Institute. - The Science Education Institute shall have the exchange of scientific information and cooperation among personnel engaged in
following functions: atmospheric, geophysical and astronomical studies.

Section 27. Philippine Institute of Volcanology and Seismology. - The Philippine Institute
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of Volcanology and Seismology shall have the following functions: and in the application of these sciences to engineering, agriculture, medicine, and other
useful arts, with the object of increasing knowledge and of contributing in other ways to
(1) Predict the occurrence of volcanic eruptions and earthquakes and their the public welfare;
geotectonic phenomena;
(2) Determine how eruptions and earthquakes shall occur and the likely areas to be (2) To give encouragement to individual initiative in research as fundamentally important
affected; to the advancement of science; and
(3) Exploit the positive aspects of volcanoes and volcanic terrain in furtherance of
the socio-economic development efforts of the government; (3) To gather and collate scientific and technical information at home and abroad, in
(4) Generate sufficient data for forecasting volcanic eruptions and earthquakes; cooperation with governmental and other agencies and to render such information
(5) Formulate appropriate disaster-preparedness plans; and available to duly accredited persons.
(6) Mitigate hazards of volcanic activities through appropriate detection, forecast,
and warning systems. Section 32. Powers of the Philippine National Science Society. - The Philippine National
Science Society shall have the power to:
CHAPTER 5 - Regional Offices
(1) Make its own organization, including its Constitution, by-laws and rules and
Section 28. Regional Offices. - The Department is authorized to establish, operate and regulations;
maintain a Regional Office, whenever appropriate, in each of the administrative regions of
the country, to be headed by a Regional Director who shall report and be subject to the (2) Fill all vacancies created by death, resignation or otherwise;
supervision of, the Undersecretary for Regional Operations. A Regional Office shall have,
within its administrative region, the following functions: (3) Provide for the election of members, division into classes, and for all other matters
needful or usual in such institution;
(1) Implement laws, rules, regulations, policies, plans, programs and projects of the
Department; (4) Receive bequests and donations and hold the same in trust, to be applied in aid of
scientific investigations according to the will of the donors;
(2) Provide efficient and effective service to the people;
(5) Be exempt from the payment of all internal-revenue taxes, fees, assessments and other
(3) Coordinate with regional offices of other departments, offices and agencies in the charges of the Government in carrying out its aims, functions, and powers;
administrative region;
(6) Submit an annual report to the Congress and to the President of the Philippines an
(4) Coordinate with local government units; and accurate account of its work and activities during the corresponding fiscal year; and

(5) Perform such other functions as may be provided by law. (7) Perform such powers as may be provided by law or necessary to carry out its purposes
and functions.
Section 29. Department Offices in Other Countries. - The Department may also have such
offices and representatives in other countries in places where its presence is considered Section 33. The National Academy of Science and Technology. - The National Academy of
necessary, subject to the approval of the President for each of them. Science and Technology shall be composed of outstanding scientists to serve as reservoir
of competent and technological manpower for the country. The total membership of the
CHAPTER 6 - Attached Agencies Academy shall not exceed fifty (50) at any one time; however, this number may be
increased by a two-thirds vote of all the members and approval thereof by the President.
Section 30. Attached Agencies. - The following agencies shall be attached to the
Department: the Philippine National Science Society, the National Academy of Science The Academy shall have its own Secretariat/Administrative staff and shall have the
and Technology, the Philippine Science High School, and the Metals Industry Research following functions; and powers:
and Development Center.
(1) Provide its members the following benefits and privileges:
Section 31. The Philippine National Science Society. - The Philippine National Science (a) free publications of scientific and technological works:
Society shall be a corporate body composed of prominent scientists and technical men and (b) travel support for attendance and participation in international conference; and
shall have the following functions: (c) such other incentives, financial or otherwise designed to promote a scientific and
technological effort and achievement.
(1) To stimulate research in the mathematical, physical, biological and other basic sciences
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BOOK V
(2) Recommend annually for Presidential awards not more than ten (10) scientists for
distinguished individual or collaborative achievement in science or technology who shall Title I - CONSITUTIONAL COMMISSIONS
be accorded by the President the rank and title of "National Scientists." Said "National
Scientists" shall each be given gratuity in such amount to be fixed by the Academy and Subtitle A - Civil Service Commission
entitled to other privileges as enjoyed by the National Artists.
CHAPTER 1 - General Provisions
(3) Engage in other projects and programs designed to recognize outstanding
achievements in science to promote scientific productivity. Section 1. Declaration of Policy. - The State shall insure and promote the Constitutional
mandate that appointments in the Civil Service shall be made only according to merit and
Section 34. The Philippine Science High School. - The Philippine Science High School fitness; that the Civil Service Commission, as the central personnel agency of the
shall offer on a free scholarship basis a secondary course with special emphasis on subject Government shall establish a career service, adopt measures to promote morale, efficiency,
pertaining to the sciences with the end view of preparing its students for a science career. integrity, responsiveness, and courtesy in the civil service, strengthen the merit and
The exercise of its corporate powers is vested exclusively in the Board of Trustees and in rewards system, integrate all human resources development programs for all levels and
the Director of the High School insofar as authorized by said Board. The Board of Trustees ranks, and institutionalize a management climate conducive to public accountability; that
shall be composed of the Secretary of Science and Technology, who shall be ex officio public office is a public trust and public officers and employees must at all times be
Chairman of the Board, the Secretary of Education, who shall be ex officio Vice- accountable to the people; and that personnel functions shall be decentralized, delegating
Chairman, and the following members: the President of the University of the Philippines, the corresponding authority to the departments, offices and agencies where such functions
the Chairman of the UNESCO National Commission of the Philippines, the Director of the can be effectively performed.
Philippine Science High School, all ex officio members, a representative from the
American-Philippine Science Foundation, Inc., to be designated by the President, one Section 2. Duties and Responsibilities of Public Officers and Employees. - Public Officers
representative from the Philippine National Science Society, one representative from the and employees shall have the duties, responsibilities, and accountability provided in
National Academy of Science and Technology, one member representing industry, and one Chapter 9, Book I of this Code.
member representing agriculture.
The members of the Board representing the Philippine National Science Society, the Section 3. Terms and Conditions of Employment. - The terms and conditions of
National Academy of Science and Technology, Industry and Agriculture shall be appointed employment of all government employees, including those in government-owned or
by the President of the Philippines upon the recommendation of the Secretary of Science controlled corporations with original charters, shall be fixed by law. The terms and
and Technology. conditions of employment which are not fixed by law may be the subject of negotiation
between duly recognized employees' organizations and appropriate government
Section 35. The Metal Industry and Research Development Center. - The Metals Industry authorities.
and Research Development Center shall be non profit research and technological
institution which shall provide both the government and the private sector with Section 4. Compensation. - The Congress shall provide for the standardization of
professional management and technical expertise on such vital activities for the compensation of government officials and employees including those in government-
development of the industry as training of engineers and technicians, information owned or controlled corporations with original charters, taking into account the nature of
exchange, trade accreditation service, quality control and testing of metal products, the responsibilities pertaining to, and the qualifications required for the position
research and business economic advisory services. concerned.

The Administration of the Center and the exercise of its corporate powers are vested Section 5. Definitions of Terms. - As used in this title, the following shall be construed
exclusively in the Board of Trustees which shall be composed of the Secretary of Science thus:
and Technology, who shall be ex officio Chairman, the Secretary of Trade and Industry,
who shall be ex officio Co-Chairman, and the following members: the Executive Director (1) Agency means any bureau, office, commission, administration, board, committee,
of the Philippine Council for Industry and Energy Research and Development, a institute, corporation with original charter, whether performing governmental or
representative each from the Department of Natural Resources, the National Economic proprietary function, or any other unit of the National Government, as well as provincial,
and Development Authority, the Metal Industry Research and Development Center and city or municipal government, except as hereinafter otherwise provided.
three representatives from the metals, engineering and allied industries sub-sector to be
appointed by the Secretary of Science and Technology. (2) Appointing officer is the person or body authorized by law to make appointments in
the Philippine Civil Service.
The Center shall have the powers and functions assigned to it by law.
(3) Class includes all positions in the government service that are sufficiently similar as to
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duties and responsibilities and require similar qualifications that can be given the same Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional
title and salary and for all administrative and compensation purposes, be treated alike. Director, Chief of Department Service and other officers of equivalent rank as may be
identified by the Career Executive Service Board, all of whom are appointed by the
(4) Commission refers to the Civil Service Commission. President;

(5) Chairman refers to the Chairman of the Commission. (4) Career officers, other than those in the Career Executive Service, who are appointed by
the President, such as the Foreign Service Officers in the Department of Foreign Affairs;
(6) Commissioner refers to either of the two other members of the Commission.
(5) Commissioned officers and enlisted men of the Armed Forces which shall maintain a
(7) Department includes any of the executive departments or entities having the category separate merit system;
of a department including the judiciary, Commission on Elections and Commission on
Audit. (6) Personnel of government-owned or controlled corporations, whether performing
governmental or proprietary functions, who do not fall under the non-career service; and
(8) Eligible refers to a person who obtains a passing grade in a civil service examination or
is granted a civil service eligibility and whose name is entered in the register of eligibles. (7) Permanent laborers, whether skilled, semi-skilled, or unskilled.

(9) Examination refers to a civil service examination conducted by the Commission and its Section 8. Classes of Positions in the Career Service. - (1) Classes of positions in the
regional offices or by other departments or agencies with the assistance of the career service appointment to which requires examinations shall be grouped into three
Commission, or in coordination or jointly with it, and those that it may delegate to major levels as follows:
departments and agencies pursuant to this Title, or those that may have been delegated by
law. (a) The first level shall include clerical, trades, crafts, and custodial service positions
which involve non-professional or subprofessional work in a non-supervisory or
(10) Form refers to those prescribed by the Civil Service Commission. supervisory capacity requiring less than four years of collegiate studies;

CHAPTER 2 - Coverage of the Civil Service (b) The second level shall include professional, technical, and scientific positions which
involve professional, technical, or scientific work in a non-supervisory or supervisory
Section 6. Scope of the Civil Service. - (1) The Civil Service embraces all branches, capacity requiring at least four years of college work up to Division Chief level; and
subdivisions, instrumentalities, and agencies of the Government, including government-
owned or controlled corporations with original charters. (c) The third level shall cover positions in the Career Executive Service.

(2) Positions in the Civil Service shall be classified into career service and non-career (2) Except as herein otherwise provided, entrance to the first two levels shall be through
service. competitive examinations, which shall be open to those inside and outside the service who
meet the minimum qualification requirements. Entrance to a higher level does not require
Section 7. Career Service. - The Career Service shall be characterized by (1) entrance previous qualification in the lower level. Entrance to the third level shall be prescribed by
based on merit and fitness to be determined as far as practicable by competitive the Career Executive Service Board.
examination, or based on highly technical qualifications; (2) opportunity for advancement
to higher career positions; and (3) security of tenure. (3) Within the same level, no civil service examination shall be required for promotion to a
higher position in one or more related occupation groups. A candidate for promotion
The Career Service shall include: should, however, have previously passed the examination for that level.

(1) Open Career positions for appointment to which prior qualification in an appropriate Section 9. Non-Career Service. - The Non-Career Service shall be characterized by (1)
examination is required; entrance on bases other than those of the usual tests of merit and fitness utilized for the
career service; and (2) tenure which is limited to a period specified by law, or which is
(2) Closed Career positions which are scientific, or highly technical in nature; these coterminous with that of the appointing authority or subject to his pleasure, or which is
include the faculty and academic staff of state colleges and universities, and scientific and limited to the duration of a particular project for which purpose employment was made.
technical positions in scientific or research institutions which shall establish and maintain
their own merit systems; The Non-Career Service shall include:

(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, (1) Elective officials and their personal or confidential staff;
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(6) Appoint and discipline its officials and employees in accordance with law and exercise
(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure control and supervision over the activities of the Commission;
of the President and their personal or confidential staff(s);
(7) Control, supervise and coordinate Civil Service examinations. Any entity or official in
(3) Chairman and members of commissions and boards with fixed terms of office and their government may be called upon by the Commission to assist in the preparation and
personal or confidential staff; conduct of said examinations including security, use of buildings and facilities as well as
(4) Contractual personnel or those whose employment in the government is in accordance personnel and transportation of examination materials which shall be exempt from
with a special contract to undertake a specific work or job, requiring special or technical inspection regulations;
skills not available in the employing agency, to be accomplished within a specific period,
which in no case shall exceed one year, and performs or accomplishes the specific work or (8) Prescribe all forms for Civil Service examinations, appointments, reports and such
job, under his own responsibility with a minimum of direction and supervision from the other forms as may be required by law, rules and regulations:
hiring agency; and
(9) Declare positions in the Civil Service as may properly be primarily confidential, highly
(5) Emergency and seasonal personnel. technical or policy determining;

CHAPTER 3 - Organixation and Functions of the Civil Service Commission (10) Formulate, administer and evaluate programs relative to the development and
retention of qualified and competent work force in the public service;
Section 10. Composition. - The Commission shall be composed of a Chairman and two
Commissioners who shall be natural born citizens of the Philippines and, at the time of (11) Hear and decide administrative cases instituted by or brought before it directly or on
their appointment, at least thirty-five years of age, with proven capacity for public appeal, including contested appointments, and review decisions and actions of its offices
administration, and must not have been candidates for any elective position in the and of the agencies attached to it. Officials and employees who fail to comply with such
elections immediately preceding their appointment. decisions, orders, or rulings shall be liable for contempt of the Commission. Its decisions,
orders, or rulings shall be final and executory. Such decisions, orders, or rulings may be
Section 11. Appointment of Chairman and Commissioners. - The Chairman and the brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days
Commissioners shall be appointed by the President with the consent of the Commission on from receipt of a copy thereof;
Appointments for a term of seven years without reappointment. Of the first appointed, the
Chairman shall hold office for seven years, a Commissioner for five years, and another (12) Issue subpoena and subpoena duces tecum for the production of documents and
Commissioner for three years, without reappointment. Appointment to any vacancy shall records pertinent to investigation and inquiries conducted by it in accordance with its
be only for the unexpired term of the predecessor. In no case shall any Member be authority conferred by the Constitution and pertinent laws;
appointed or designated in a temporary or acting capacity.
(13) Advise the President on all matters involving personnel management in the
Section 12. Powers and Functions. - The Commission shall have the following powers and government service and submit to the President an annual report on the personnel
functions: programs;
(1) Administer and enforce the constitutional and statutory provisions on the merit system
for all levels and ranks in the Civil Service; (14) Take appropriate action on all appointments and other personnel matters in the Civil
Service including extension of Service beyond retirement age;
(2) Prescribe, amend and enforce rules and regulations for carrying into effect the
provisions of the Civil Service Law and other pertinent laws; (15) Inspect and audit the personnel actions and programs of the departments, agencies,
bureaus, offices, local government units and other instrumentalities of the government
(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and including government-owned or controlled corporations; conduct periodic review of the
programs to promote economical, efficient and effective personnel administration in the decisions and actions of offices or officials to whom authority has been delegated by the
government; Commission as well as the conduct of the officials and the employees in these offices and
apply appropriate sanctions when necessary;
(4) Formulate policies and regulations for the administration, maintenance and
implementation of position classification and compensation and set standards for the (16) Delegate authority for the performance of any function to departments, agencies and
establishment, allocation and reallocation of pay scales, classes and positions; offices where such functions may be effectively performed;
(5) Render opinion and rulings on all personnel and other Civil Service matters which
shall be binding on all heads of departments, offices and agencies and which may be (17) Administer the retirement program for government officials and employees, and
brought to the Supreme Court on certiorari; accredit government services and evaluate qualifications for retirement;
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(b) Hear and decide cases brought before it on appeal by officials and employees who feel
(18) Keep and maintain personnel records of all officials and employees in the Civil aggrieved by the determination of appointing authorities involving personnel actions and
Service; and violations of the merit system. The decision of the Board shall be final except those
involving division chiefs or officials of higher ranks which may be appealed to the
(19) Perform all functions properly belonging to a central personnel agency and such other Commission;
functions as may be provided by law.
(c) Directly take cognizance of complaints affecting functions of the Commission, those
Section 13. Duties and Responsibilities of the Chairman. - Subject to policies and rules which are unacted upon by the agencies, and such other complaints which require direct
adopted by the Commission, the Chairman shall: action of the Board in the interest of justice;

(1) Direct all operations of the Commission; (d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any
(2) Establish procedures for the effective operations of the Commission; investigation or inquiry, punish for contempt in accordance with the same procedures and
(3) Transmit to the President rules and regulations, and other guidelines adopted by penalties prescribed in the Rules of Court; and
the Chairman which require Presidential attention including annual and other
periodic reports; (e) Promulgate rules and regulations to carry out the functions of the Board subject to the
(4) Issue appointments to, and enforce decisions on administrative discipline approval of the Commission.
involving officials and employees of the Commission;
(5) Delegate authority for the performance of any function to officials and employees (3) The Office of Legal Affairs shall provide the Chairman with legal advice and
of the Commission; assistance; render counselling services; undertake legal studies and researches; prepare
(6) Approve and submit the annual and supplemental budget of the Commission; and opinions and rulings in the interpretation and application of the Civil Service law, rules
(7) Perform such other functions as may be provided by law. and regulations; prosecute violations of such law, rules and regulations; and represent the
Commission before any Court or tribunal.
Section 14. Membership of the Chairman in Boards. - The Chairman shall be a member of
the Board of Directors or of other governing bodies of government entities whose (4) The Office of Planning and Management shall formulate development plans, programs
functions affect the career development, employment status, rights, privileges, and welfare and projects; undertake research and studies on the different aspects of public personnel
of government officials and employees, such as the Government Service Insurance management; administer management improvement programs; and provide fiscal and
System, Foreign Service Board, Foreign Trade Service Board, National Board for budgetary services.
Teachers, and such other similar boards as may be created by law.
Section 15. Duties and Responsibilities of the Members of the Commission. - Jointly with (5) The Central Administrative Office shall provide the Commission with personnel,
the Chairman, the two (2) Commissioners shall be responsible for the effective exercise of financial, logistics and other basic support services.
the rule-making and adjudicative functions of the Commission. They shall likewise
perform such functions as may be delegated by the Commission. In case of the absence of (6) The Office of Central Personnel Records shall formulate and implement policies,
the Chairman owing to illness or other cause, the senior member shall perform the standards, rules and regulations pertaining to personnel records maintenance, security,
functions of the Chairman. control and disposal; provide storage and extension services; and provide and maintain
library services.
Section 16. Offices in the Commission. - The Commission shall have the following offices:
(1) The Office of the Executive Director headed by an Executive Director, with a Deputy (7) The Office of Position Classification and Compensation shall formulate and implement
Executive Director shall implement policies, standards, rules and regulations promulgated policies, standards, rules and regulations relative to the administration of position
by the Commission; coordinate the programs of the offices of the Commission and render classification and compensation.
periodic reports on their operations, and perform such other functions as may be assigned
by the Commission. (8) The Office of Recruitment, Examination and Placement shall provide leadership and
assistance in developing and implementing the overall Commission programs relating to
(2) The Merit System Protection Board composed of a Chairman and two (2) members recruitment, examination and placement, and formulate policies, standards, rules and
shall have the following functions: regulations for the proper implementation of the Commission's examination and placement
programs.
(a) Hear and decide on appeal administrative cases involving officials and employees of
the Civil Service. Its decision shall be final except those involving dismissal or separation (9) The Office of Career Systems and Standards shall provide leadership and assistance in
from the service which may be appealed to the Commission; the formulation and evaluation of personnel systems and standards relative to performance
appraisal, merit promotion, and employee incentive benefits and awards.
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shall be in accordance with the provision relating to civil service embodied in the
(10) The Office of Human Resource Development shall provide leadership and assistance Constitution, this Title and the rules, principles, standards, guidelines and regulations
in the development and retention of qualified and efficient work force in the Civil Service; established by the Commission. The Civil Service Commission shall, whenever it deems it
formulate standards for training and staff development; administer service-wide in the interest of the public service, organize in each department, office, agency,
scholarship programs; develop training literature and materials; coordinate and integrate government-owned or controlled corporation, and provincial and city government a Civil
all training activities and evaluate training programs. Service Staff which shall be headed by an officer of the Commission. The necessary staff
personnel and office facilities and equipment shall be provided by the department,
(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules government-owned or controlled corporation or local government where the staff is
and regulations for the effective conduct or inspection and audit of personnel and established but the Commission may augment these with its own. The Staff shall serve as
personnel management programs and the exercise of delegated authority; provide the principal liaison between the Civil Service and Department concerned and shall
technical and advisory services to civil Service Regional Offices and government agencies perform the following specific functions and those functions which may hereafter be
in the implementation of their personnel programs and evaluation systems. assigned to it by the Commission.

(12) The Office of Personnel Relations shall provide leadership and assistance in the (1) Provide technical assistance in all aspects of personnel management;
development and implementation of policies, standards, rules and regulations in the
accreditation of employee associations or organizations and in the adjustment and (2) Monitor and audit periodically the personnel practices and performance of the
settlement of employee grievances and management of employee disputes. Department or agency concerned as well as those of public officers and employees thereat;

(13) The Office of Corporate Affairs shall formulate and implement policies, standards, (3) Determine agency compliance with Civil Service Law and rules; and
rules and regulations governing corporate officials and employees in the areas of
recruitment, examination, placement, career development, merit and awards systems, (4) In the performance of these functions, the staff shall welcome and receive from the
position classification and compensation, performing appraisal, employee welfare and public any suggestions, observations and complaints pertaining to the conduct of public
benefits, discipline and other aspects of personnel management on the basis of comparable officers and employees.
industry practices. In the performance of their functions, the units so organized shall avail of the technical
assistance and guidelines of the Civil Service Commission.
(14) The Office of Retirement Administration shall be responsible for the enforcement of
the constitutional and statutory provisions, relative to retirement and the regulation for the Section 19. Council of Personnel Officers. - There shall be a Council of Personnel Officers
effective implementation of the retirement of government officials and employees. to be composed of Chief personnel officers of the different executive departments and of
agencies with the category of department that the Chairman of the Commission shall select
(15) The Regional and Field Offices. - The Commission shall have not less than thirteen for membership. Except for its Executive Officer who shall be designated by the Chairman
(13) Regional offices each to be headed by a Director, and such field offices as may be from among the appropriate officials in the Civil Service Commission, the Council is
needed, each to be headed by an official with at least the rank of an Assistant Director. authorized to elect such other officers from among its members and to fix its own rules or
Each Regional Office shall have the following functions: procedures concerning attendance at meetings, approval of policy declaration, and other
(a) Enforce Civil Service law and rules, policies, standards on personnel management business matters. Provisions for necessary facilities and clerical assistance for the Council
within their respective jurisdiction; shall be made in the annual budget of the Commission.
(b) Provide technical advice and assistance to government offices and agencies regarding
personnel administration; and The Council shall have the following functions:
(c) Perform such other functions as may be delegated by the Commission. (1) Offer advice, upon request of the Secretary of a Department or the Commission, in
developing constructive policies, standards, procedures, and programs as well as on
Section 17. Organizational Structure. - Each office of the Commission shall be headed by matters relating to the improvement of personnel methods and to the solution of personnel
a Director with at least one (1) Assistant Director, and may have such divisions as are problems confronting the various departments and agencies of the government;
necessary to carry out their respective functions. As an independent constitutional body, (2) Promote among the departments and agencies, through study and discussion, uniform
the Commission may effect changes in the organization as the need arises. and consistent interpretation and application of personnel policies; and
(3) Serve as a clearing house of information and stimulate the use of methods of personnel
CHAPTER 4 - Interdepartment Relations management that will contribute most to good government.
Section 20. Inspection and Audit. - The Commission, through its designated
Section 18. Civil Service Assistance to Department and Agencies. - Each Secretary or head representatives, shall conduct a periodic inspection and audit of the personnel management
of office, agency, government-owned or controlled corporation with original charter and program of each department, agency, province or city, in order to: (a) determine
local government shall be responsible for personnel administration in his office which compliance with the Civil Service law, rules and standards; (b) review discharge of
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delegated authority; (c) make an adequate evaluation of the progress made and problems this Section, "qualified next-in-rank" refers to an employee appointed on a permanent
encountered in the conduct of the merit system in the national and local governments; (d) basis to a position previously determined to be next-in-rank and who meets the
give advice and provide assistance in developing constructive policies, standards and requirements for appointment thereto as previously determined by the appointing authority
procedures, and (e) stimulate improvement in all areas of personnel management. and approved by the Commission.
Periodic inspection and audit will include an appraisal of personnel management
operations and activities relative to: (a) formulation and issuance of personnel policy; (b) (7) Qualification in an appropriate examination shall be required for appointment to
recruitment and selection of employees; (c) personnel action and employment status; (d) positions in the first and second levels in the career service in accordance with the Civil
career and employee development; (e) performance evaluation system; (f) employee Service rules, except as otherwise provided in this Title: Provided, That whenever there is
suggestions and incentive award; (g) employee relations and services; (h) discipline; (i) a civil service eligible actually available for appointment, no person who is not such an
personnel records and reporting; and (j) programs evaluation. eligible shall be appointed even in a temporary capacity to any vacant position in the
career service in the government or in any government-owned or controlled corporation
CHAPTER 5 - Personnel Policies and Standards with original charter, except when the immediate filling of the vacancy is urgently
required in the public interest, or when the vacancy is not permanent, in which cases
Section 21. Recruitment and Selection of Employees. - (1) Opportunity for government temporary appointments of non-eligibles may be made in the absence of eligibles actually
employment shall be open to all qualified citizens and positive efforts shall be exerted to and immediately available.
attract the best qualified to enter the service. Employees shall be selected on the basis of
fitness to perform the duties and assume the responsibilities of the positions. (8) The appropriate examinations herein referred to shall be those given by the
Commission and the different agencies: Provided, however, That nothing herein shall
(2) When a vacancy occurs in a position in the first level of the Career Service as defined affect those eligibilities acquired prior to the effectivity of this Civil Service Law:
in Section 6, the employees in the department who occupy the next lower positions in the Provided, further, That a person with a civil service eligibility acquired by successfully
occupational group under which the vacant position is classified, and in other functionally passing an examination shall be qualified for a position requiring a lower eligibility if he
related occupational groups and who are competent, qualified and with the appropriate possesses the other requirements for appointments to such position.
civil service eligibility shall be considered for promotion.
Section 22. Qualification Standards. - (1) A qualification standard expresses the minimum
(3) When a vacancy occurs in a position in the second level of the Career Service as requirements for a class of positions in terms of education, training and experience, civil
defined in Section 8, the employees in the government service who occupy the next lower service eligibility, physical fitness, and other qualities required for successful performance.
positions in the occupational group under which the vacant position is classified and in The degree of qualifications of an officer or employee shall be determined by the
other functionally related occupational groups and who are competent, qualified and with appointing authority on the basis of the qualification standard for the particular position.
the appropriate civil service eligibility shall be considered for promotion.
Qualification standards shall be used as basis for civil service examinations for positions
(4) For purposes of this Section, each department or agency shall evolve its own screening in the career service, as guides in appointment and other personnel actions, in the
process, which may include tests of fitness, in accordance with standards and guidelines adjudication of protested appointments, in determining training needs, and as aid in the
set by the Commission. Promotion boards shall be formed to formulate criteria for inspection and audit of the agencies personnel work programs.
evaluation, conduct tests or interviews, and make systematic assessment of training
experience. It shall be administered in such manner as to continually provide incentives to officers and
employees towards professional growth and foster the career system in the government
(5) If the vacancy is not filled by promotion as provided herein the same shall be filled by service.
transfer of present employees in the government service, by reinstatement, by re- (2) The establishment, administration and maintenance of qualification standards shall be
employment of persons separated through reduction in force, or by appointment of persons the responsibility of the department or agency, with the assistance and approval of the
with the civil service eligibility appropriate to the positions. Civil Service Commission and in consultation with the Wage and Position Classification
Office.
(6) A qualified next-in-rank employee shall have the right to appeal initially to the
Secretaries or heads of agencies or instrumentalities including government-owned or Section 23. Release of Examination Results. - The results of any particular civil service
controlled corporations with original charters, then to the Merit System Protection Board, examination held in a number of places on the same date shall be released simultaneously.
and finally to the Civil Service Commission an appointment made in favor of another
employee if the appellant is not satisfied with the written special reason or reason given by Section 24. Register of Eligibles. - The names of the competitors who pass an examination
the appointing authority for such appointment; Provided, however, that the decision of the shall be entered in a register of eligibles arranged in the order of their general ratings and
Civil Service Commission may be reviewed on certiorari only by the Supreme Court containing such information as the Commission may deem necessary.
within thirty (30) days from receipt of the decision of the aggrieved party. For purposes of
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Section 25. Cultural Communities. - In line with the national policy to facilitate the (5) Reemployment. Names of persons who have been appointed permanently to positions
integration of the members of cultural communities and accelerate the development of the in the career service and who have been separated as a result of reduction in force or
areas occupied by them, the Commission shall give special civil service examinations to reorganization, shall be entered in a list from which selection for reemployment shall be
qualify them for appointment in the civil service. made.

Section 26. Personnel Actions. - All appointments in the career service shall be made only (6) Detail. A detail is the movement of an employee from one agency to another without
according to merit and fitness, to be determined as far as practicable by competitive the issuance of an appointment and shall be allowed, only for a limited period in the case
examinations. A non-eligible shall not be appointed to any position in the civil service of employees occupying professional, technical and scientific positions. If the employee
whenever there is a civil service eligible actually available for and ready to accept believes that there is no justification for the detail, he may appeal his case to the
appointment. Commission. Pending appeal, the decision to detail the employee shall be executory unless
otherwise ordered by the Commission.
As used in this Title, any action denoting the movement or progress of personnel in the
civil service shall be known as personnel action. Such action shall include appointment (7) Reassignment. An employee may be reassigned from one organizational unit to another
through certification, promotion, transfer, reinstatement, re-employment, detail, in the same agency: Provided, That such reassignment shall not involve a reduction in
reassignment, demotion, and separation. All personnel actions shall be in accordance with rank, status or salary.
such rules, standards, and regulations as may be promulgated by the Commission.
Section 27. Employment Status. - Appointment in the career service shall be permanent or
(1) Appointment through certification. An appointment through certification to a position temporary.
in the civil service, except as herein otherwise provided, shall be issued to a person who
has been selected from a list of qualified persons certified by the Commission from an (1) Permanent status. A permanent appointment shall be issued to a person who meets all
appropriate register of eligibles, and who meets all the other requirements of the position. the requirements for the positions to which he is being appointed, including the
appropriate eligibility prescribed, in accordance with the provisions of law, rules and
All such persons must serve a probationary period of six months following their original standards promulgated in pursuance thereof.
appointment and shall undergo a thorough character investigation in order to acquire
permanent civil service status. A probationer may be dropped from the service for (2) Temporary appointment. In the absence of appropriate eligibles and it becomes
unsatisfactory conduct or want of capacity any time before the expiration of the necessary in the public interest to fill a vacancy, a temporary appointment shall be issued
probationary period: Provided, That such action is appealable to the Commission. to a person who meets all the requirements for the position to which he is being appointed
except the appropriate civil service eligibility: Provided, That such temporary appointment
(2) Promotion. A promotion is a movement from one position to another with an increase shall not exceed twelve months, but the appointee may be replaced sooner if a qualified
in duties and responsibilities as authorized by law and usually accompanied by an increase civil service eligible becomes available.
in pay. The movement may be from one department or agency to another, or from one
organizational unit to another in the same department or agency. Section 28. Salary increase or Adjustment. - Adjustments in salaries as a result of increase
in pay levels or upgrading of positions which do not involve a change in qualification
(3) Transfer. A transfer is a movement from one position to another which is of equivalent requirements shall not require new appointments except that copies of the salary
rank, level, or salary without break in service involving the issuance of an appointment. adjustment notices shall be submitted to the Commission for record purposes.

It shall not be considered disciplinary when made in the interest of public service, in Section 29. Reduction in Force. - Whenever it becomes necessary because of lack of work
which case, the employee concerned shall be informed of the reasons therefor. If the or funds or due to a change in the scope or nature of an agency's program, or as a result of
employee believes that there is no justification for the transfer, he may appeal his case to reorganization, to reduce the staff of any department or agency, those in the same group or
the Commission. class of positions in one or more agencies within the particular department or agency
wherein the reduction is to be effected, shall be reasonably compared in terms of relative
The transfer may be from one department or agency to another or from one organizational fitness, efficiency and length of service, and those found to be least qualified for the
unit to another in the same department or agency: Provided, however, That any movement remaining positions shall be laid off.
from the non-career service to the career service shall not be considered a transfer.
Section 30. Career and Personnel Development. - The development and retention of a
(4) Reinstatement. Any person who has been permanently appointed to a position in the competent and efficient work force in the public service is a primary concern of
career service and who has, through no delinquence or misconduct, been separated government. It shall be the policy of the government that a continuing program of career
therefrom, may be reinstated to a position in the same level for which he is qualified. and personnel development be established for all government employees at all levels. An
integrated national plan for career and personnel development shall serve as the basis for
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all career and personnel development activities in the government. agencies along their respective functional areas of specialization.

Section 31. Career and Personnel Development Plans. - Each department or agency shall (3) In coordination with the Commission, the Department of Local Government and
prepare a career and personnel development plan which shall be integrated into a national Community Development shall undertake local government training programs.
plan by the Commission. Such career and personnel development plans which shall
include provisions on merit promotions, performance evaluation, in-service training, (4) In coordination with the Commission, each department or agency, province or city
including overseas and local scholarships and training grants, job rotation, suggestions and shall establish, maintain and promote a systematic plan of action for personnel training at
incentive award systems, and such other provisions for employees' health, welfare, all levels in accordance with standards laid down by the Commission. It shall maintain
counseling, recreation and similar services. appropriate training staffs and make full use of available training facilities.

Section 32. Merit Promotion Plans. - Each department or agency shall establish promotion Whenever it deems it necessary, the Commission shall take the initiative in undertaking
plans which shall be administered in accordance with the provisions of the Civil Service programs for personnel development.
law and the rules, regulations and standards to be promulgated by the Commission. Such
plans shall include provisions for a definite screening process, which may include tests of Section 35. Employee Suggestions and incentive Award System. - There shall be
fitness, in accordance with standards and guidelines set by the Commission. Promotion established a government-wide employee suggestions and incentive awards system which
Boards may be organized subject to criteria drawn by the Commission. shall be administered under such rules, regulations, and standards as may be promulgated
by the Commission.
Section 33. Performance Evaluation System. - There shall be established a performance In accordance with rules, regulations, and standards promulgated by the Commission, the
evaluation system, which shall be administered in accordance with rules, regulations and President or the head of each department or agency is authorized to incur whatever
standards, promulgated by the Commission for all officers and employees in the career necessary expenses involved in the honorary recognition of subordinate officers and
service. Such performance evaluation system shall be administered in such manner as to employees of the government who by their suggestions, inventions, superior
continually foster the improvement of individual employee efficiency and organizational accomplishment, and other personal efforts contribute to the efficiency, economy, or other
effectiveness. improvement of government operations, or who perform such other extraordinary acts or
services in the public interest in connection with, or in relation to, their official
Each department or agency may, after consultation with the Commission, establish and use employment.
one or more performance evaluation plans appropriate to the various groups of positions in
the department or agency concerned. No performance evaluation shall be given, or used as Section 36. Personnel Relations. - (1) It shall be the concern of the Commission to provide
a basis for personnel action, except under an approved performance evaluation plan: leadership and assistance in developing employee relations programs in the department or
Provided, That each employee shall be informed periodically by his supervisor of his agencies.
performance evaluation. (2) Every Secretary or head of agency shall take all proper steps toward the creation of an
atmosphere conducive to good supervisor-employee relations and the improvement of
Section 34. Responsibility for Training. - The Commission shall be responsible for the employee morale.
coordination and integration of a continuing program of personnel development for all
government personnel in the first and second levels. Section 37. Complaints and Grievances. - Employees shall have the right to present their
complaints or grievances to management and have them adjudicated as expeditiously as
Central staff agencies and specialized institutes shall conduct continuing centralized possible in the best interest of the agency, the government as a whole, and the employee
training for staff specialists from the different agencies. However, in those cases where concerned. Such complaint or grievances shall be resolved at the lowest possible level in
there is sufficient number of participants to warrant training at department or agency or the department or agency, as the case may be, and the employee shall have the right to
local government levels, such central staff agencies and specialized institutes shall render appeal such decision to higher authorities.
the necessary assistance, and consultative services. Each department or agency shall promulgate rules and regulations governing expeditious,
To avoid duplication of effort and overlapping of training functions, the following fair and equitable adjustment of employees' complaints or grievances in accordance with
functional responsibilities are assigned: the policies enunciated by the Commission.

(1) Public and private colleges and universities and similar institutions shall be encouraged In case any dispute remains unresolved after exhausting all the available remedies under
to organize and carry out continuing programs of executive development. existing laws and procedures, the parties may jointly refer the dispute to the Public Sector
Labor Management Council constituted under section 46, for appropriate action.
(2) The Commission, the Commission on Audit, the Department of Budget and
Management, the General Services Administration, and other central staff agencies shall CHAPTER 6 - Right to Self - Organization
conduct centralized training and assist in the training program of the Departments or
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Section 38. Coverage. - (1) All government employees, including those in government- (2) A duly registered employees' organization shall be accorded voluntary recognition
owned or controlled corporations with original charters, can form, join or assist upon a showing that no other employees' organization is registered or is seeking
employees' organizations of their own choosing for the furtherance and protection of their registration, based on the records of the Bureau of Labor Relations, and that the said
interests. They can also form, in conjunction with appropriate government authorities, organization has the majority support of the rank-and-file employees in the organizational
labor-management committees, work councils and other forms of workers' participation unit.
schemes to achieve the same objectives.
(3) Where there are two or more duly registered employees' organizations in the
(2) The provisions of this Chapter shall not apply to the members of the Armed Forces of appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order
the Philippines, including police officers, policemen, firemen and jail guards. the conduct of a certification election and shall certify the winner as the exclusive
representative of the rank-and-file employees in said organizational unit.
Section 39. Ineligibility of High-Level Employees to Join Rank-and-File Employees'
Organization. - High-level employees whose functions are normally considered as policy- Section 45. The Public Sector Labor-Management Council. - A Public Sector Labor-
making or managerial or whose duties are of a highly confidential nature shall not be Management Council is hereby constituted to be composed of the following: The
eligible to join the organization of rank-and-file government employees. Chairman of the Civil Service Commission, as Chairman; the Secretary of Labor and
Employment, as Vice-Chairman; and the Secretary of Finance, the Secretary of Justice and
Section 40. Protection of the Right to Organize. - (1) Government employees shall not be the Secretary of Budget and Management, as members.
discriminated against in respect of their employment by reason of their membership in
employees' organizations or participation in the normal activities of their organizations. The Council shall implement and administer the provisions of this Chapter. For this
Their employment shall not be subject to the condition that they shall not join or shall purpose, the Council shall promulgate the necessary rules and regulations to implement
relinquish their membership in the employees' organizations. this Chapter.
Section 46. Discipline: General Provisions. -
(2) Government authorities shall not interfere in the establishment, functioning or
administration of government employees' organizations through acts designed to place (a) No officer or employee in the Civil Service shall be suspended or dismissed except for
such organizations under the control of government authority. cause as provided by law and after due process.
(b) The following shall be grounds for disciplinary action:
Section 41. Registration of Employees' Organization. - Government employees' (1) Dishonesty;
organizations shall register with the Civil Service Commission and the Department of (2) Oppression;
Labor and Employment. The application shall be filed with the Bureau of Labor Relations (3) Neglect of duty;
of the Department which shall process the same in accordance with the provisions of the (4) Misconduct;
Labor Code of the Philippines. Applications may also be filed with the Regional Offices of (5) Disgraceful and immoral conduct;
the Department of Labor and Employment which shall immediately transmit the said (6) Being notoriously undesirable;
applications to the Bureau of Labor Relations within three (3) days from receipt thereof. (7) Discourtesy in the course of official duties;
(8) Inefficiency and incompetence in the performance of official duties;
Section 42. Certificate of Registration. - Upon arrival of the application, a registration (9) Receiving for personal use of a fee, gift or other valuable thing in the course of official
certificate shall be issued to the organization recognizing it as a legitimate employees' duties or in connection therewith when such fee, gift, or other valuable thing is given by
organization with the right to represent its members and undertake activities to further and any person in the hope or expectation of receiving favor or better treatment than that
defend its interests. The corresponding certificates of registration shall be jointly approved accorded other persons, or committing acts punishable under the anti-graft laws;
by the Chairman of the Civil Service Commission and the Secretary of Labor and (10) Conviction of a crime involving moral turpitude;
Employment. (11) Improper or unauthorized solicitation of contributions from subordinate employees
and by teachers or school officials from school children;
Section 43. Appropriate Organizational Unit. - The appropriate organizational unit shall (12) Violation of existing Civil Service Law and rules or reasonable office regulations;
be the employer's unit consisting of rank-and-file employees unless circumstances (13) Falsification of official document;
otherwise require. (14) Frequent unauthorized absences or tardiness in reporting for duty, loafing or
frequently unauthorized absence from duty during regular office hours;
Section 44. Sole and Exclusive Employees' Representatives. - (1) The duly registered (15) Habitual drunkenness;
employees' organization having the support of the majority of the employees in the (16) Gambling prohibited by law;
appropriate organizational unit shall be designated as the sole and exclusive representative (17) Refusal to perform official duty or render overtime service;
of the employees. (18) Disgraceful, immoral or dishonest conduct prior to entering the service;
(19) Physical or mental incapacity or disability due to immoral or vicious habits;
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(20) Borrowing money by superior officers from subordinates or lending by subordinates (4) An appeal shall not stop the decision from being executory, and in case the penalty is
to superior officers; suspension or removal, the respondent shall be considered as having been under
(21) Lending money at usurious rates or interest; preventive suspension during the pendency of the appeal in the event he wins an appeal.
(22) Willful failure to pay just debts or willful failure to pay taxes due to the government;
(23) Contracting loans of money or other property from persons with whom the office of Section 48. Procedure in Administrative Cases Against Non-Presidential Appointees. -
the employee concerned has business relations; (1) Administrative proceedings may be commenced against a subordinate officer or
(24) Pursuit of private business, vocation or profession without the permission required by employee by the Secretary or head of office of equivalent rank, or head of local
Civil Service rules and regulations; government, or chiefs of agencies, or regional directors, or upon sworn, written complaint
(25) Insubordination; of any other person.
(26) Engaging directly or indirectly in partisan political activities by one holding a non- (2) In the case of a complaint filed by any other persons, the complainant shall submit
political office; sworn statements covering his testimony and those of his witnesses together with his
(27) Conduct prejudicial to the best interest of the service; documentary evidence. If on the basis of such papers a prima facie case is found not to
(28) Lobbying for personal interest or gain in legislative halls and offices without exist, the disciplining authority shall dismiss the case. If a prima facie case exists, he shall
authority; notify the respondent in writing, of the charges against the latter, to which shall be
(29) Promoting the sale of tickets in behalf of private enterprises that are not intended for attached copies of the complaint, sworn statements and other documents submitted, and
charitable or public welfare purposes and even in the latter cases if there is no prior the respondent shall be allowed not less than seventy-two hours after receipt of the
authority; complaint to answer the charges in writing under oath, together with supporting sworn
(30) Nepotism as defined in Section 60 of this Title. statements and documents, in which he shall indicate whether or not he elects a formal
(c) Except when initiated by the disciplining authority, no complaint against a civil service investigation if his answer is not considered satisfactory. If the answer is found
official or employee shall be given due course unless the same is in writing and subscribed satisfactory, the disciplining authority shall dismiss the case.
and sworn to by the complainant.
(d) In meeting out punishment, the same penalties shall be imposed for similar offenses (3) Although a respondent does not request a formal investigation, one shall nevertheless
and only one penalty shall be imposed in each case. The disciplining authority may impose be conducted when from the allegations of the complaint and the answer of the
the penalty of removal from the service, demotion in rank, suspension for not more than respondent, including the supporting documents, the merits of the case cannot be decided
one year without pay, fine in an amount not exceeding six months' salary, or reprimand. judiciously without conducting such an investigation.
Section 47. Disciplinary Jurisdiction. -
(1) The Commission shall decide upon appeal all administrative disciplinary cases (4) The investigation shall be held not earlier than five days nor later than ten days from
involving the imposition of a penalty of suspension for more than thirty days, or fine in an the date of receipt of respondent's answer by the disciplining authority, and shall be
amount exceeding thirty days' salary, demotion in rank or salary or transfer, removal or finished within thirty days from the filing of the charges, unless the period is extended by
dismissal from office. A complaint may be filed directly with the Commission by a private the Commission in meritorious cases. The decision shall be rendered by the disciplining
citizen against a government official or employee in which case it may hear and decide the authority within thirty days from the termination of the investigation or submission of the
case or it may deputize any department or agency or official or group of officials to report of the investigator, which report shall be submitted within fifteen days from the
conduct the investigation. The results of the investigation shall be submitted to the conclusion of the investigation.
Commission with recommendation as to the penalty to be imposed or other action to be
taken. (5) The direct evidence for the complainant and the respondent shall consist of the sworn
(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and statement and documents submitted in support of the complaint or answer, as the case may
municipalities shall have jurisdiction to investigate and decide matters involving be, without prejudice to the presentation of additional evidence deemed necessary but was
disciplinary action against officers and employees under their jurisdiction. Their decisions unavailable at the time of the filing of the complaint or answer, upon which the cross-
shall be final in case the penalty imposed is suspension for not more than thirty days or examination, by respondent and the complainant, respectively, shall be based. Following
fine in an amount not exceeding thirty days', salary. In case the decision rendered by a cross-examination, there may be redirect and recross-examination.
bureau or office head is appealable to the Commission, the same may be initially appealed
to the department and finally to the Commission and pending appeal, the same shall be (6) Either party may avail himself of the services of counsel and may require the
executory except when the penalty is removal, in which case the same shall be executory attendance of witnesses and the production of documentary evidence in his favor through
only after confirmation by the Secretary concerned. the compulsory process of subpoena or subpoena duces tecum.

(3) An investigation may be entrusted to regional director or similar officials who shall (7) The investigation shall be conducted only for the purpose of ascertaining the truth and
make the necessary report and recommendation to the chief of bureau or office or without necessarily adhering to technical rules applicable in judicial proceedings. It shall
department within the period specified in Paragraph (4) of the following Section. be conducted by the disciplining authority concerned or his authorized representative.
The phrase "any other party" shall be understood to be a complainant other than those
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referred to in subsection (a) hereof. upon recommendation of the Commission, the President may commute or remove
administrative penalties or disabilities imposed upon officers or employees in disciplinary
Section 49. Appeals. - (1) Appeals, where allowable, shall be made by the party adversely cases, subject to such terms and conditions as he may impose in the interest of the service.
affected by the decision within fifteen days from receipt of the decision unless a petition
for reconsideration is seasonably filed, which petition shall be decided within fifteen days. CHAPTER 7 - Prohibitions
Notice of the appeal shall be filed with the disciplining office, which shall forward the
records of the case, together with the notice of appeal, to the appellate authority within Section 54. Limitation on Appointment. - (1) No elective official shall be eligible for
fifteen days from filing of the notice of appeal, with its comment, if any. The notice of appointment or designation in any capacity to any public office or position during his
appeal shall specifically state the date of the decision appealed from and the date of receipt tenure.
thereof. It shall also specifically set forth clearly the grounds relied upon for excepting
from the decision. (2) No candidate who has lost in any election shall, within one year after election, be
(2) A petition for reconsideration shall be based only on any of the following grounds: (a) appointed to any office in the Government or any government-owned or controlled
new evidence has been discovered which materially affects the decision rendered; (b) the corporations or in any of its subsidiaries.
decision is not supported by the evidence on record; or (c) error of law or irregularities
have been committed which are prejudicial to the interest of the respondent: Provided, (3) Unless otherwise allowed by law or by the primary functions of his position, no
That only one petition for reconsideration shall be entertained. appointive official shall hold any other office or employment in the Government or any
subdivision, agency or instrumentality thereof, including government-owned or controlled
Section 50. Summary Proceedings. - No formal investigation is necessary and the corporations or their subsidiaries.
respondent may be immediately removed or dismissed if any of the following
circumstances is present: Section 55. Political Activity. - No officer or employee in the Civil Service including
members of the Armed Forces, shall engage directly or indirectly in any partisan political
(1) When the charge is serious and the evidence of guilt is strong; activity or take part in any election except to vote nor shall he use his official authority or
influence to coerce the political activity of any other person or body. Nothing herein
(2) When the respondent is a recidivist or has been repeatedly charged and there is provided shall be understood to prevent any officer or employee from expressing his views
reasonable ground to believe that he is guilty of the present charge; and on current political problems or issues, or from mentioning the names of candidates for
public office whom he supports: Provided, That public officers and employees holding
(3) When the respondent is notoriously undesirable. political offices may take part in political and electoral activities but it shall be unlawful
for them to solicit contributions from their subordinates or subject them to any of the acts
Resort to summary proceedings by the disciplining authority shall be done with utmost involving subordinates prohibited in the Election Code.
objectivity and impartiality to the end that no injustice is committed: Provided, That
removal or dismissal except those by the President, himself or upon his order, may be Section 56. Additional or Double Compensation. - No elective or appointive public officer
appealed to the Commission. or employee shall receive additional or double compensation unless specifically
authorized by law nor accept without the consent of the President, any present,
Section 51. Preventive Suspension. - The proper disciplining authority may preventively emolument, office, or title of any kind from any foreign state.
suspend any subordinate officer or employee under his authority pending an investigation, Pensions and gratuities shall not be considered as additional, double, or indirect
if the charge against such officer or employee involves dishonesty, oppression or grave compensation.
misconduct, or neglect in the performance of duty, or if there are reasons to believe that
the respondent is guilty of charges which would warrant his removal from the service. Section 57. Limitations on Employment of Laborers. - Laborers, whether skilled, semi-
skilled or unskilled, shall not be assigned to perform clerical duties.
Section 52. Lifting of Preventive Suspension Pending Administrative Investigation. - When
the administrative case against the officer or employee under preventive suspension is not Section 58. Prohibition on Detail or Reassignment. - No detail or reassignment whatever
finally decided by the disciplining authority within the period of ninety (90) days after the shall be made within three (3) months before any election.
date of suspension of the respondent who is not a presidential appointee, the respondent
shall be automatically reinstated in the service: Provided, That when the delay in the Section 59. Nepotism. - (1) All appointments in the national, provincial, city and
disposition of the case is due to the fault, negligence or petition of the respondent, the municipal governments or in any branch or instrumentality thereof, including government-
period of delay shall not be counted in computing the period of suspension herein owned or controlled corporations, made in favor of a relative of the appointing or
provided. recommending authority, or of the chief of the bureau or office, or of the persons
exercising immediate supervision over him, are hereby prohibited.
Section 53. Removal of Administrative Penalties or Disabilities. - In meritorious cases and As used in this Section, the word "relative" and members of the family referred to are
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those related within the third degree either or consanguinity or of affinity. such oath as may be necessary in the transactions of official business and administer oaths
(2) The following are exempted from the operation of the rules on nepotism: (a) persons and take testimony in connection with any authorized investigation. Attorneys of the
employed in a confidential capacity, (b) teachers, (c) physicians, and (d) members of the Commission may prosecute and defend cases in connection with the functions of the
Armed Forces of the Philippines: Provided, however, That in each particular instance full Commission before any court or tribunal.
report of such appointment shall be made to the Commission.
Section 65. Liability of Appointing Authority. - No person employed in the Civil Service in
The restriction mentioned in subsection (1) shall not be applicable to the case of a member violation of the Civil Service Law and rules shall be entitled to receive pay from the
of any family who, after his or her appointment to any position in an office or bureau, government; but the appointing authority responsible for such unlawful employment shall
contracts marriage with someone in the same office or bureau, in which event the be personally liable for the pay that would have accrued had the employment been lawful,
employment or retention therein of both husband and wife may be allowed. and the disbursing officials shall make payment to the employee of such amount from the
salary of the officers so liable.
(3) In order to give immediate effect to these provisions, cases of previous appointments
which are in contravention hereof shall be corrected by transfer, and pending such transfer, Section 66. Liability of Disbursing Officers. - Except as may otherwise be provided by
no promotion or salary increase shall be allowed in favor of the relative or relatives who law, it shall be unlawful for a treasurer or other fiscal officer to draw or retain from salary
are appointed in violation of these provisions. due an officer or employee any amount for contribution or payment of obligations other
than those due the government or its instrumentalities.
CHAPTER 8 - Leave of Absence
Section 67. Penal Provision. - Whoever makes any appointment or employs any person in
Section 60. Leave of Absence. - Officers and employees in the Civil Service shall be violation of any provision of this Title or the rules made thereunder or whoever commits
entitled to leave of absence, with or without pay, as may be provided by law and the rules fraud, deceit or intentional misrepresentation of material facts concerning other civil
and regulations of the Civil Service Commission in the interest of the service. service matters, or whoever violates, refuses or neglects to comply with any of such
provisions or rules, shall upon conviction be punished by a fine not exceeding one
CHAPTER 9 - Miscellaneous Provisions thousand pesos or by imprisonment not exceeding six (6) months, or both such fine and
imprisonment in the discretion of the court.
Section 61. Examining Committee, Special Examiners and Special Investigators. - Subject
to approval by the proper head of a department or agency, the Commission may select Subtitle B -THE COMMISSION ON AUDIT
suitable persons in the government service to act as members of examining committees,
special examiners or special investigators. Such persons shall be designated examiners or CHAPTER 1 - Gerneral Provisions
investigators of the Commission and shall perform such duties as the Commission may
require, and in the performance of such duties they shall be under its exclusive control. Section 1. Declaration of Policy. - All resources of the government shall be managed,
Examining committees, special examiners or special investigators so designated may be expended or utilized in accordance with law and regulations and safeguarded against loss
given allowances or per diems for their services, to be paid out of the funds of, and at a or wastage through illegal or improper disposition to ensure efficiency, economy and
rate to be determined by, the Commission. effectiveness in the operations of government. The responsibility to take care that such
policy is faithfully adhered to rests directly with the chief or head of the government
Section 62. Fees. - The Commission shall collect and charge fees for civil service agency concerned.
examinations, certifications of civil service ratings, service records, and other civil service
matters, training courses, seminars, workshops in personnel management and other civil Section 2. Definition of Terms. - Unless the content otherwise requires, when used in this
service matters. For this purpose, the Commission shall prescribe standard and reasonable Title:
rates for such examinations, certifications, training courses, seminars, and workshops:
Provided, That no examination fees shall be collected in examinations given for the (1) "Fund" is a sum of money or other resources set aside for the purpose of carrying out
selection of scholars. specific activities or attaining certain objectives in accordance with special requisitions,
restrictions, or limitations, and constitutes an independent fiscal and accounting entity.
Section 63. Income. - The income of the Commission from fees, costs for services it may
assess and levy, and such other proceeds generated in the performance of its functions (2) "Government funds" includes public moneys of every sort and other resources
shall be directly utilized by the Commission for its expenses. pertaining to any agency of the Government.

Section 64. Authority of Officers to Administer Oaths, Take Testimony, Prosecute and (3) "Revenue funds" comprises all funds deprived from the income of any agency of the
Defend Cases in Court. - Members of the Commission, chiefs of offices, and other officers Government and available for appropriation or expenditure in accordance with law.
and employees of the Commission designated in writing by the Chairman may administer
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(4) "Trust funds" refers to funds which have come officially into the possession of any Commission Secretariat shall perform the following functions:
agency of the Government or of a public officer as trustee, agent, or administrator, or (1) Prepare the agenda for the sessions of the Commission Proper;
which have been received for the fulfillment of some obligation. (2) Prepare and keep the minutes of all sessions, hearings and conferences of the
Commission Proper;
(5) "Depository funds" comprises funds over which the officer accountable therefor may (3) Maintain the records of the Commission Proper; and
retain control for the lawful purposes for which they came into his possession. It embraces (4) Perform such related functions as may be assigned by the Chairman of the
moneys in any and all depositories. Commission Proper.
CHAPTER 3
(6) "Depository" refers to any financial institution lawfully authorized to receive OFFICES
government moneys upon deposit. Section 7. Central Offices. - The Commission shall have the following central offices:
(1) The Administrative Office shall be headed by a Director and shall perform the
(7) "Resources" refers to the actual assets of any agency of the Government such as cash, following functions:
instruments representing or convertible to money, receivables, lands, buildings, as well as (a) Develop and maintain a personnel program which shall include recruitment, selection,
contingent assets, such as estimated revenues applying to the current fiscal period not appointment, performance evaluation, employee relations, and welfare services;
accrued or collected, and bonds authorized and unissued. (b) Provide the Commission with services related to personnel, records, supplies,
equipment, medical, collections and disbursements, and other related services; and
(8) "Government agency" or "agency of the government," or "agency" refers to any (c) Perform such other related functions as may be assigned from time to time by the
department, bureaus or office of the National Government, or any of its branches and Chairman.
instrumentalities, or any political subdivision, as well as any government-owned or (2) The Planning, Financial and Management Office shall:
controlled corporation, including its subsidiaries, or other self-governing board or (a) Formulate long range and annual plans and programs for the Commission;
commission of the Government. (b) Formulate basis policies and guidelines for the preparation of the budget of the
Commission, coordinate with the Department of Budget and Management, and the Office
CHAPTER 2 - ORGANIZATION OF THE COMMISSION ON AUDIT of the President in the preparation of the said budget;
(c) Maintain and administer the accounting system pertaining to the accounts of the
Section 3. The Commission Proper. - The Commission Proper shall be composed of the Commission;
Chairman and two Commissioners. It shall sit as a body to formulate policies, promulgate (d) Develop and maintain the management information system of the Commission;
rules and regulations, and prescribe standards governing the discharge of its powers and (e) Develop and administer a management improvement program, including a system for
functions. measurement of performance of auditing units on which an annual report shall be
submitted to the Chairman not later than the 31st of January of each year;
Section 4. The Chairman. - The Chairman shall act as Presiding Officer of the (f) Render consultancy services related to the discharge of government auditing functions;
Commission Proper and Chief Executive Officer of the Commission. The Chairman may and
be assisted by the commissioners in the general administration of the Commission. He (g) Perform such other related functions as may be assigned from time to time by the
shall perform the following duties: Chairman.
(3) The State Accounting and Auditing Development Office shall be headed by a Director
(1) Control and supervise the general administration of the commission; and shall perform the following functions:
(a) Formulate long range plans for a comprehensive training program for all personnel of
(2) Direct and manage the implementation and execution of policies, standards, rules and the Commission and personnel of the agencies of government, with respect to Commission
regulations of the commission; rules and regulations and audit matters;
(b) Prepare and implement annual training programs, consistent with its long range plans;
(3) Control and supervise the audit of highly technical or confidential transactions or (c) Develop its capability to implement training programs;
accounts of any government agency; and (d) Publish the professional journal of the Commission;
(4) Perform such other related functions as may be assigned from time to time by the (e) Establish and maintain such training centers and libraries as may be authorized by the
Chairman. Commission; and
Section 5. Offices of the Commissioners. - There shall be two (2) Commissioners who (f) Perform such other related functions as may be assigned from time to time by the
shall assist the Chairman, upon proper delegation in the general administration of the Chairman.
Commission. They shall assist in the review and evaluation of existing policies as well as (4) The Accountancy Office shall be headed by a Director and shall perform the following
in the formulation of new ones. functions:
Section 6. The Commission Secretariat. - The Commission Secretariat shall be headed by (a) Prepare for the Commission, the annual financial report of the National Government
the Secretary to the Commission who shall have the privileges of a COA service chief. The and such other financial or statistical works as may be required by the Commission;
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(b) Maintain the accounts of the current surplus of the general fund of the national (e) Coordinate and initiate for the Commission, with appropriate legal bodies of
government; government with respect to legal proceedings towards the collection and enforcement of
(c) Verify appropriations, of national government agencies and control fund releases debts and claims, and the restitution of funds and property, found to be due any
pertaining thereto; and government agency in the settlement and adjustment of its accounts by the Commission;
(d) Assist in the formulation of accounting rules and regulations and supervise the and
implementation of such rules and regulations in government agencies. (f) Perform such other related functions as may be assigned from time to time by the
(5) The Special Audits Office shall be headed by a Director and shall perform the Chairman.
following functions: (8) The National Government Audit Offices I and II shall be headed by a Director and
(a) Conduct, consistent with the exercise by the Commission of its visitorial powers as which shall perform the following functions:
conferred by the variable scope audit of non-governmental firms subsidized by the (a) Exercise control and supervision over the implementation of auditing rules and
government (1) required to pay levies or government shares; (2) those funded by donations regulations in agencies of national government in the National Capital Region (NCR),
through the government; and (3) those for which the government has put up a counterpart including self-governing boards, commissions or agencies funded from national
fund. Such audits shall be limited to the funds coming from the government; appropriations;
(b) Undertake, on a selective basis, financial compliance, economy, efficiency and (b) Review audit reports covering agencies of the national government under its audit
effectiveness audit of national agencies and local government units, government-owned or jurisdiction;
controlled corporations, and other self-governing boards, commissions, or agencies of (c) Exercise control and supervision over personnel, planning, financial (budgetary and
government, as well as specific programs and projects of the government; accounting), and legal matters pertaining to the Office and the Auditing Units under it;
(c) Audit financial operations of public utilities and franchise grantees for rate (d) Formulate and develop plans, operating standards, methods and techniques for the
determination and franchise tax purposes; implementation of auditing rules and regulations for agencies of the national government;
(d) Conduct such other special audits as may be directed by the Chairman; and (e) Formulate accounting and auditing rules and regulations for agencies of the national
(e) Perform such other related functions as may be assigned from time to time by the government;
Chairman. (f) Advise and assist the Chairman on matters pertaining to the audit of agencies of the
(6) The Technical Services Office shall perform the following functions: national government under their respective jurisdictions; and
(a) Review and evaluate contracts with emphasis on the engineering and other technical (g) Perform such other related functions as may be assigned from time to time by the
aspects; Chairman.
(b) Inspect and appraise infrastructure projects, deliveries of materials and equipment, and (9) The Corporate Audit Office shall be headed by a Director and shall perform the
property for disposal; following functions:
(c) Develop and administer a system for monitoring the prices of materials, supplies, and (a) Exercise control and supervision over the implementation of auditing rules and
equipment purchased by the government; regulations in government-owned or controlled corporations in the National Capital
(d) Initiate special studies on technical matters related to auditing; and Region;
(e) Perform such other related functions as may be assigned from time to time by the (b) Review audit reports covering government-owned or controlled corporations;
Chairman. (c) Exercise control and supervision over personnel, planning, financial (budgetary and
(7) The Legal Office shall be headed by a General Counsel with the rank and privileges of accounting), and legal matters pertaining to the Office and the Auditing units under it;
a director and which shall perform the following functions: (d) Formulate and develop plans, operating standards, methods and techniques for the
(a) Perform advisory and consultative functions and render legal services with respect to implementation of accounting and auditing rules and regulations in government-owned or
the performance of the functions of the Commission and the interpretation of pertinent controlled corporations;
laws and regulations; (e) Formulate accounting and auditing rules and regulations for government-owned or
(b) Handle the investigation of administrative cases filed against the personnel of the controlled corporations;
Commission, evaluate and act on all reports of involvement of the said personnel in (f) Prepare for the Commission, the annual financial report of government-owned or
anomalies or irregularities in government transactions, and perform any other investigative controlled corporations;
work required by the Commission upon assignment by the Chairman. (g) Advise and assist the Chairman on matters pertaining to the audit of government-
(c) Represent the Commission in preliminary investigation of malversation and similar owned or controlled corporations; and
cases discovered in audit, assist and collaborate with the prosecuting agencies of (h) Perform such other related functions as may be assigned from time to time by the
Government in the prosecution thereof, and assist and collaborate with the Solicitor Chairman.
General in handling civil cases involving the Chairman or any of the Commissioners and (10) The Local Governments Audit Office shall be headed by a Director and shall perform
other officials and employees of the Commission in their official capacity; the following functions:
(d) Extend assistance by way of legal advice or counsel to auditors of the Commission (a) Exercise control and supervision over the implementation of auditing rules and
who face harassment or retaliatory suits, whether civil or criminal, in consequence of the regulations in local government units in the National Capital Region;
performance of their official functions; (b) Review audit reports covering local government units in the National Capital Region;
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(c) Exercise control and supervision over personnel, planning, financial (budgetary and compliance with applicable laws and regulations;
accounting), and legal matters pertaining to the Office and Auditing units under it;
(d) Formulate and develop plans, operating standards, methods and techniques for the (3) Institute control measures through the promulgation of auditing and accounting rules
implementation of auditing rules and regulations in local government units; and regulations governing the receipts disbursements, and uses of funds and property,
(e) Formulate accounting and auditing rules and regulations for local government units; consistent with the total economic development efforts of the Government;
(f) Prepare for the Commission, the annual financial report of local government units; (4) Promulgate auditing and accounting rules and regulations so as to facilitate the
(g) Advise and assist the Chairman on matters pertaining to the audit of local government keeping, and enhance the information value of the accounts of the Government;
units; and (5) Institute measures designed to preserve and ensure the independence of its
(h) Perform such other related functions as may be assigned from time to time by the representatives; and
Chairman. (6) Endeavor to bring its operations closer to the people by the delegation of authority
through decentralization, consistent with the provisions of the Constitution and the laws.
Section 8. Auditing Units in Regional Offices: Structure and Functions. - The Regional
Offices in Region I to XII, each to be headed by a Director shall perform the following Section 11. General Jurisdiction. - (1) The Commission on Audit shall have the power,
functions: authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property, owned or held in trust by, or
(1) Exercise supervision and control over the implementation of auditing rules and pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities,
regulations in any agency of the government with principal office or place of operations including government-owned or controlled corporations with original charters, and on a
within the regions; post-audit basis: (a) constitutional bodies, commissions and offices that have been granted
fiscal autonomy under this Constitution; (b) autonomous state colleges and universities,
(2) Review local, national and corporate audit reports pertaining to the region; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such
non-governmental entities receiving subsidy or equity, directly or indirectly from or
(3) Exercise control and supervision over personnel, planning, financial (budgetary and through the Government, which are required by law or the granting institution to submit to
accounting), and legal matters pertaining to the region; and such audit as a condition of subsidy or equity. However, where the internal control system
of the audited agencies is inadequate, the Commission may adopt such measures,
(4) Perform such other related functions as may be assigned by the Chairman. including temporary or special pre-audit, as are necessary and appropriate to correct the
Section 9. Auditing Units in Government Agencies: Structure and Functions. - The deficiencies. It shall keep the general accounts of the Government and, for such period as
Auditing Units in government agencies shall perform the following functions: may be provided by law, preserve the vouchers and other supporting papers pertaining
thereto.
(1) Examine, audit and settle all accounts, funds, financial transactions and resources of
government agencies under their jurisdiction. (2) The Commission shall have exclusive authority, subject to the limitations in this
Article, to define the scope of its audit and examination, establish the techniques and
(2) Submit audit reports and such other reports as may be required by the Commission; methods required therefor, and promulgate accounting and auditing rules and regulations,
including those for the prevention and disallowance of irregular, unnecessary, excessive,
(3) Keep and preserve expense vouchers, journal vouchers, stubs of treasury warrants and extravagant, or unconscionable expenditures, or uses of government funds and properties.
checks, reports of collections and disbursements and similar documents together with their
supporting papers, under regulations of the Commission; and Section 12. Appointing Power. - The Commission Proper shall appoint in accordance with
the Civil Service Law, the officials and employees of the Commission wherever they are
(4) Perform such other functions as may be assigned to them by the Chairman. stationed or assigned.

CHAPTER 4 - JURISDICTION, POWERS AND FUNCTIONS OF THE COMMISSION Section 13. Examining Authority. - The Commission shall have authority to examine
books, papers, documents filed by individuals and corporations with, and which are in the
Section 10. Statement of Objectives. - In keeping with the constitutional mandate, the custody of, government offices in connection with government revenue collection
Commission adheres to the following objectives: operations, for the sole purpose of ascertaining that all funds determined by the
appropriate agencies and collectible and due the Government have actually been collected,
(1) Determine whether or not the fiscal responsibility that rests directly with the head of except as otherwise provided in the Internal Revenue Code of 1977.
the government agency has been properly and effectively discharged;
Section 14. Visitorial Authority. - (1) The Commission shall have visitorial authority over
(2) Develop and implement a comprehensive audit program that shall encompass an non-government entities subsidized by the Government, those required to pay levies or
examination of financial transactions, accounts and reports, including evaluation of have government shares, those which have received counterpart funds from the
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Government or are partly funded by donations through the Government. This authority, power, under such regulations as it may prescribe, to authorize and enforce the settlement
however, shall pertain only to the audit of these funds or subsidies coming from or through of accounts subsisting between agencies of the Government.
the Government; and
Section 19. Collection of Indebtedness Due to the Government. - The Commission shall,
(2) Upon direction of the President, the Commission shall likewise exercise visitorial through proper channels, assist in the collection and enforcement of all debts and claims,
authority over non-governmental entities whose loans are guaranteed by the Government, and the restitution of all funds or the replacement or payment as a reasonable price of
provided that such authority shall pertain only to the audit of the government's contingent property, found to be due the Government, or any of its subdivisions, agencies or
liability. instrumentalities, or any government-owned or controlled corporation or self-governing,
board, commission or agency of the Government, in the settlement and adjustment of its
Section 15. Fee for Audit and Other Services. - (1) The Commission shall fix and collect accounts. If any legal proceeding is necessary to that end, the Commission shall refer the
reasonable fees for the different services rendered to non-government entities that shall be case to the Solicitor General, the Government Corporate Counsel, or the Legal Staff of the
audited in connection with their dealings with the Government arising from subsidiaries, Creditor Government Office or agency concerned to institute such legal proceeding. The
counterpart funding by Government, or where audited records become the basis for a Commission shall extend full support in the litigation. All such moneys due and payable
government levy or share. Fees of this nature shall accrue to the General Fund and shall be shall bear interest at the legal rate from the date of written demand by the Commission.
remitted to the Treasurer of the Philippines within ten (10) days following the completion
of the audit; and Section 20. Power to Compromise Claims. - (1) When the interest of the Government so
requires, the Commission may compromise or release in whole or in part, any settled
(2) Whenever the Commission contracts with any government entity to render audit and claim or liability to any government agency not exceeding ten thousand pesos arising out
related services beyond the normal scope of such services, the Commission is empowered of any matter or case before it or within its jurisdiction, and with the written approval of
to fix and collect reasonable fees. Such fees shall either be appropriated in the agency's the President, it may likewise compromise or release any similar claim or liability not
current budget, charged against its savings, or appropriated in its succeeding year's budget. exceeding one hundred thousand pesos. In case the claim or liability exceeds one hundred
Remittance shall accrue to the General Fund and shall be made to the Treasurer of the thousand pesos, the application for relief therefrom shall be submitted, through the
Philippines within the time provided for in the contract of service, or in the billing Commission and the President, with their recommendations, to the Congress; and
rendered by the Commission.
(2) The Commission may, in the interest of the Government, authorize the charging or
Section 16. Deputization of Private Licensed Professionals to Assist Government Auditors. crediting to an appropriate account in the National Treasury, small discrepancies (overage
- or shortage) in the remittances to, and disbursements of, the National Treasury, subject to
(1) The Commission may, when the exigencies of the service also require, deputize and the rules and regulations as it may prescribe.
retain in the name of the Commission such certified public accountants and other licensed
professionals not in the public service as it may deem necessary to assist government Section 21. Retention of Money for Satisfaction of Indebtedness to Government. - When
auditors in undertaking specialized audit engagements; and any person is indebted to any government agency, the Commission may direct the proper
officer to withhold the payment of any money due such person or his estate to be applied
(2) The deputized professionals shall be entitled to such compensation and allowances as in satisfaction of the indebtedness.
may be stipulated, subject to pertinent rules and regulations on compensation and fees.
Section 22. Authority to Examine Accounts of Public Utilities. - (1) The Commission shall
Section 17. Government Contracts for Auditing, Accounting and Related Services. - (1) examine and audit the books, records and accounts of public utilities in connection with
No government agency shall enter into any contract with any private person or firm for the fixing of rates of every nature, or in relation to the proceedings of the proper regulatory
services to undertake studies and services relating to government auditing, including agencies, for purposes of determining franchise taxes;
services to conduct, for a fee, seminars or workshops for government personnel on these
topics, unless the proposed contract is first submitted to the Commission to enable it to (2) Any public utility refusing to allow an examination and audit of its books of accounts
determine if it has the resources to undertake such studies or services. The Commission and pertinent records, or offering unnecessary obstruction to the examination and audit, or
may engage the services of experts from the public or private sectors in the conduct of found guilty of concealing any material information concerning its financial status shall be
these studies; and subject to the penalties provided by law; and

(2) Should the Commission decide not to undertake the study or service, it shall (3) During the examination and audit, the public utility concerned shall produce all the
nonetheless have the power to review the contract in order to determine the reasonableness reports, records, books of accounts and such other papers as may be required. The
of its costs. Commission shall have the power to examine under oath any official or employee of the
said public utility.
Section 18. Settlement of Accounts Between Agencies. - The Commission shall have the
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Section 23. Submission of Papers Relative to Obligations. - (1) The Commission shall his salary and other emoluments until he shall have complied therewith. The violation of
have the power, for purposes of inspection, to require the submission of the original of any these provisions for at least three (3) times shall subject the offender to administrative
order, deed, contract, or other document under which any collection, or payment from, disciplinary action.
government funds may be made, together with any certificate, receipt, or other evidence in
connection therewith. If authenticated copy is needed for record purposes, the copy shall Section 27. Statement of Monthly Receipts and Disbursements. - The Commission shall
upon demand be furnished; forward to the Secretary of Finance, as soon as and within sixty (60) days after the
expiration of each month, a statement of all receipts of the national government of
(2) In the case of deeds to property purchased by any government agency, the Commission whatever class, and payments of moneys made on warrants or otherwise during the
shall require a certificate of title entered in favor of the Government or other evidence preceding month.
satisfactory to it that the title is in the Government; and
Section 28. Powers, Functions, Duties of Auditors as Representatives of the Commission. -
(3) It shall be the duty of the officials or employees concerned, including those in non- (1) The Auditors shall exercise such powers and functions as may be authorized by the
government entities under audit, or affected in the audit of government and non- Commission in the examination, audit and settlement of the accounts, funds, financial
government entities, to comply with these requirements. Failure or refusal to do so without transactions and resources of the agencies under their respective audit jurisdiction;
justifiable cause shall be a ground for administrative disciplinary action as well as for
disallowing permanently a claim under examination, assessing additional levy or (2) A report of audit for each calendar year shall be submitted on the last working day of
government share, or withholding or withdrawing government funding or donation February following the close of the year by the head of each auditing unit through the
through the Government. Commission to the head or the governing body of the agency concerned, and copies
thereof shall be furnished the government officials concerned or authorized to receive
Section 24. Investigatory and Inquisitorial Powers. - The Chairman or any Commissioner, them. Subject to such rules and regulations as the Commission may prescribe, the report
the Central Office Managers, the Regional Directors, the Auditors of any government shall set forth the scope of audit and shall include statements of financial conditions,
agency, and any other official or employee of the Commission specially deputed in writing surplus or deficit analysis, operations, changes in financial position, and such comments
for the purpose by the Chairman shall, in compliance with the requirement of due process and information as may be necessary together with such recommendations with respect
have the power to summon the parties to a case brought before the Commission for thereto as may be advisable, including a report of any impairment of capital noted in the
resolution, issue subpoena and subpoena duces tecum, administer oaths, and otherwise audit. It shall also show specifically any program, expenditure, or other financial
take testimony in any investigation or inquiry on any matter within the jurisdiction of the transaction or undertaking observed in the course of the audit which in the opinion of the
Commission. auditor has been carried out or made without authority of law. The auditor shall render
such other reports as the Commission may require:
Section 25. Power to Punish Contempt. - The Commission shall have the power to punish
contempt provided for in the Rules of Court under the same procedure and with the same (3) In the performance of their respective audit functions as herein specified, the auditors
penalties provided therein. Any violation of any final and executory decision, order or shall employ such auditing procedures and techniques as are determined by the
ruling of the Commission shall constitute contempt of the Commission. Commission under regulations that it may promulgate; and

Section 26. Annual Report of the Commission. - (1) The Commission shall submit to the (4) The auditors in all auditing units shall have the custody and be responsible for the
President, and the Congress not later than the last day of September of each year an annual safekeeping and preservation of paid expense vouchers, journal vouchers, stubs of treasury
report on the financial condition and results of operation of all agencies of the Government warrants or checks, reports of collections and disbursements and similar documents,
which shall include recommendations of measures necessary to improve the efficiency and together with their respective supporting papers, under regulations of the Commission.
effectiveness of these agencies;
Section 29. Check and Audit of Property or Supplies. - The auditor shall from time to time
(2) To carry out the purposes of this section, the Chief Accountant or the official in charge conduct a careful and thorough check and audit of all property or supplies of the agency to
of keeping the accounts of government agency shall submit to the Commission year-end which he is assigned. Such check and audit shall not be confined to a mere inspection and
trial balances and such other supporting or subsidiary statements as may be required by the examination of the pertinent vouchers, inventories, and other papers but shall include an
Commission not later than the fourteenth (14) day of February. Trial balances returned by ocular verification of the existence and condition of the property or supplies. The
the Commission for revision due to non-compliance with accounting rules and regulations recommendation of the auditor shall be embodied in the proper report.
shall be resubmitted within three days after the date of receipt by the official concerned;
and Section 30. Annual Audit and Work Program. - Each Auditor who is head of an auditing
unit shall develop and devise an annual work program and the necessary audit program for
(3) Failure on the part of any official or employee to comply with the provisions of the his unit in accordance with the regulations of the Commission.
immediately preceding paragraph shall cause the automatic suspension of the payment of
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Section 31. Seizure of Office by Auditor. - (1) The books, accounts, papers and cash of any necessary to a proper decision is received by it.
local treasurer or other accountable officer shall at all times be open to the inspection of
the Commission or its authorized representatives; Section 35. Appeal from Decision of the Commission. - Any decision, order or ruling of the
Commission may be brought to the Supreme Court on certiorari by the aggrieved party
(2) In case an examination of the accounts of a local treasurer discloses a shortage in cash within thirty days from his receipt of a copy thereof in the manner provided by law and the
which should be on hand, it shall be the duty of the examining officer to seize the office Rules of Court. When the decision, order or ruling adversely affects the interest of any
and its contents, notify the Commission and the local chief executive, thereupon government agency, the appeal may be taken by the proper head that agency.
immediately take full possession of the office and its contents, close and render his
accounts to the date of taking possession, and temporarily continue the public business of Section 36. Finality of Decision of the Commission or Any Auditor. - A decision of the
such office; and Commission or of any Auditor upon any matter within its or his jurisdiction, if not
appealed as herein provided, shall be final and executory.
(3) The auditor who takes possession of the office of the local treasurer under this section
shall ipso facto supersede the local treasurer until the officer involved is restored, or Section 37. Opening and Revision of Settled Accounts. - (1) At any time before the
another person has been appointed or designated to the position or other provision has expiration of three (3) years after the settlement of any account by an auditor, the
been lawfully made for filling the office. Commission may motu proprio review and revise the account or settlement and certify a
new balance. For this purpose, it may require any account, vouchers or other papers
Section 32. Constructive Distraint of Property of Accountable Officer. - (1) Upon connected with the matter to be forwarded to it;
discovery in audit of a shortage in the accounts of any accountable officer and upon a (2) When any settled account appears to be tainted with fraud, collusion, or error of
finding of a prima facie case of malversation of public funds or property against him, in calculation, or when new and material evidence is discovered, the Commission may,
order to safeguard the interest of the Government, the Commission may place under within three (3) years after the original settlement, open the account and, after a reasonable
constructive distraint personal property of the accountable officer concerned where there is time for reply or appearance of the party concerned, certify thereon a new balance. An
reasonable ground to believe that the said officer is retiring from the government service auditor may exercise the same power with respect to settled accounts pertaining to the
or intends to leave the Philippines or remove his property therefrom or hide or conceal his agencies under his audit jurisdiction; and
property. (3) Accounts once finally settled shall in no case be opened or reviewed except as herein
provided.
(2) The constructive distraint shall be effected by requiring the accountable officer
concerned or any other person having possession or control of the property to accomplish CHAPTER 6 - Government Auditing and Accounting
a receipt, in the form of prescribed by the Commission, covering the property distrained
and obligate himself to preserve the same intact and unaltered and not to dispose of it in Section 38. Definition of Government Auditing. - Government auditing is the analytical
any manner whatever without the express authority of the Commission; and and systematic examination and verification of financial transactions, operations, accounts
and reports of any government agency for the purpose of determining their accuracy,
(3) In case the said accountable officer or other person having the possession and control integrity and authenticity, and satisfying the requirements of law, rules and regulations.
of the property sought to be placed under constructive distraint refuses or fails to
accomplish the receipt herein referred to, the representative of the Commission effecting Section 39. General Standards. - (1) The audit shall be performed by a person possessed
the constructive distraint shall proceed to prepare a list of such property and, in the with adequate technical training and proficiency as auditor;
presence of two (2) witnesses, leave a copy thereof in the premises where the property
distrained is located, after which the said property shall be deemed to have been placed (2) In all matters relating to the audit work, the auditor shall maintain complete
under constructive distraint. independence, impartiality and objectivity and shall avoid any possible compromise of his
independence or any act which may create a presumption of lack of independence or the
CHAPTER 5 - Decisions of the Commission possibility of undue influence in the performance of his duties; and

Section 33. Appeal from Decision of Auditors. - Any person aggrieved by the decision of (3) The auditor shall exercise due professional care and be guided by applicable laws,
an auditor of any government agency in the settlement of an account or claim may, within regulations and the generally accepted principles of accounting in the performance of the
six (6) months from receipts of a copy thereof, appeal in writing to the Commission. audit work a well as in the preparation of audit and financial reports.

Section 34. Period for Rendering Decisions of the Commission. - The Commission shall Section 40. Definition of Government Accounting. - Government accounting includes the
decide any case brought before it within sixty (60) days from the date of its submission for process of analyzing, recording, classifying, summarizing and communicating all
resolution. If the account or claim involved in the case needs reference to other persons or transactions involving the receipt and dispositions of government funds and property, and
office, or to a party interested, the period shall be counted from the time the last comment interpreting the results thereof.
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Section 41. Objectives of Government Accounting. - Government accounting shall aim to Section 46. Appropriation Before Entering into Contract. - (1) No contract involving the
produce information concerning past operations and present conditions; provide a basis for expenditure of public funds shall be entered into unless there is an appropriation therefor,
guidance for future operations; provide for control of the acts of public bodies and officers the unexpended balance of which, free of other obligations, is sufficient to cover the
in the receipt, disposition and utilization of funds and property; and report on the financial proposed expenditure; and
position and the results of operations of government agencies for the information of all
persons concerned. (2) Notwithstanding this provision, contracts for the procurement of supplies and materials
to be carried in stock may be entered into under regulations of the Commission provided
CHAPTER 7 - RECEIPT AND DISPOSITION OF FUNDS AND PROPERTY that when issued, the supplies and materials shall be charged to the proper appropriations
account.
Section 42. Accounting for Money and Property Received by Public Officials. - Except as
may otherwise be specifically provided by law or competent authority, all moneys and Section 47. Certificate Showing Appropriation to Meet Contract. - Except in the case of a
property officially received by a public officer in any capacity or upon any occasion must contract for personal service, for supplies for current consumption or to be carried in stock
be accounted for as government funds and government property. Government property not exceeding the estimated consumption for three (3) months, or banking transactions of
shall be taken up in the books of the agency concerned at acquisition cost or an appraised government-owned or controlled banks, no contract involving the expenditure of public
value. funds by any government agency shall be entered into or authorized unless the proper
accounting official of the agency concerned shall have certified to the officer entering into
Section 43. Special, Fiduciary and Trust Funds. - Receipts shall be recorded as income of the obligation that funds have been duly appropriated for the purpose and that the amount
Special, Fiduciary or Trust Funds or Funds other than the General Fund only when necessary to cover the proposed contract for the current calendar year is available for
authorized by law as implemented pursuant to law. expenditure on account thereof, subject to verification by the auditor concerned. The
certificate signed by the proper accounting official and auditor who verified it, shall be
Section 44. Issuance of Official Receipts. - (1) No payment of any nature shall be received attached to and become an integral part of the proposed contract, and the sum so certified
by a collecting officer without immediately issuing an official receipt in acknowledgment shall not thereafter be available for expenditure for any other purpose until the obligation
thereof. The receipt may be in the form of postage, internal revenue or documentary of the government agency concerned under the contract is fully extinguished.
stamps and the like, or officially numbered receipts, subject to proper custody,
accountability and audit; and Section 48. Void Contract and Liability of Officer. - Any contract entered into contrary to
the requirements of the two (2) immediately preceding sections shall be void, and the
(2) Where mechanical devices are used to acknowledge cash receipts, the Commission officer or officers entering into the contract shall be liable to the Government or other
may approve, upon request, exemption from the use of accountable forms. contracting party for any consequent damage to the same extent as if the transaction had
been wholly between private parties.
CHAPTER 8 - Application of Appropriated Funds
Section 49. Countersigning of Warrants or Checks by Auditors. - No warrant or check
Section 45. Disbursement of Government Funds. - (1) Revenue funds shall not be paid out shall be paid by the Treasury of the Philippines, local treasurer, or any government
of any public treasury or depository except in pursuance of an appropriation law or other depository unless it is countersigned by a duly authorized official of the Commission.
specific statutory authority; When, in the opinion of the Commission, the interest of the service so requires, the
warrant or check may be paid without the countersignature under such rules and
(2) Trust funds shall not be paid out of any public treasury or depository except in regulations as it may be prescribed from time to time.
fulfillment of the purpose for which the trust was created or funds received and upon
authorization of the legislative body, or head of any other agency of the government CHAPTER 9 - Accountability and Responsibility for Government Funds and Property
having control thereof, and subject to pertinent budget laws, rules and regulations;
Section 50. Accountable Officers; Board Requirements. - (1) Every officer of any
(3) National revenue and trust funds shall not be withdrawn from the National Treasury government agency whose duties permit or require the possession or custody government
except upon warrant or other instruments of withdrawal approved by the Secretary of funds shall be accountable therefor and for safekeeping thereof in conformity with law;
Finance as recommended by the Treasurer of the Philippines; and and

(4) Temporary investment of investible cash in the National Treasury in any securities (2) Every accountable officer shall be properly bonded in accordance with law.
issued by the National Government and its political subdivisions and instrumentalities,
including government-owned or controlled corporations as authorized by the Secretary of Section 51. Primary and Secondary Responsibility. - (1) The head of any agency of the
Finance, shall not be construed as disbursement of funds. Government is immediately and primarily responsible for all government funds and
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property pertaining to his agency; Unless indicated in the Omnibus Election Code, the Commission is hereby authorized to
(2) Persons entrusted with the possession or custody of the funds or property under the fix the appropriate period for the various prohibited acts enumerated therein, consistent
agency head shall be immediately responsible to him, without prejudice to the liability of with the requirements of free, orderly, honest, peaceful and credible elections.
either party to the Government.
(3) Exercise direct and immediate supervision and control over national and local officials
Section 52. General Liability for Unlawful Expenditures. - Expenditures of government or employees, including members of any national or local law enforcement agency and
funds or uses of government property in violation of law or regulations shall be a personal instrumentality of the government required by law to perform duties relative to the
liability of the official or employee found to be directly responsible therefor. conduct of elections, plebiscite, referendum, recall and initiative. In addition, it may
authorize CMT cadets, eighteen years of age and above to act as its deputies for the
Section 53. Prohibition Against Pecuniary Interest. - No accountable or responsible officer purpose of enforcing its orders;
shall be pecuniary interested, directly or indirectly, in any contract or transaction of the
agency in which he is such an officer. The Commission may relieve any officer or employee referred to in the preceding
paragraph from the performance of his duties relating to electoral processes who violates
CHAPTER 10 - Miscellaneous Provisions the election law or fails to comply with its instructions, orders, decisions or rulings, and
appoint his substitute. Upon recommendation of the Commission, the corresponding
Section 54. Duty to Respect the Commission's Independence. - It shall be the duty of every proper authority shall suspend or remove from office any or all of such officers or
person to respect, protect and preserve the independence of the Commission. employees who may after due process, be found guilty of such violation or failure.

Section 55. Administrative Disciplinary Action. - Subject to rules and regulations as may (4) During the period of the campaign and ending thirty days thereafter, when in any area
be approved by the President, any unjustified failure by the public officer concerned to of the country there are persons committing acts of terrorism to influence people to vote
comply with any requirement imposed in Title I-B, Book V of this Code shall constitute for or against any candidate or political party, the Commission shall have the power to
neglect of duty and shall be a ground for administrative disciplinary action against said authorize any member or members of the Armed Forces of the Philippines, the National
public officer who, upon being found guilty thereof after hearing, shall be meted out such Bureau of Investigation, the Integrated National Police or any similar agency or
penalty as is commensurate with the degree of his guilt in accordance with the Civil instrumentality of the government, except civilian home defense forces, to act as deputies
Service Law. Repealed unjustified failure to comply with the requirement imposed in Title for the purpose of insuring the holding of free, orderly, honest, peaceful and credible
I-B, Book V of this Code shall be conclusive proof that the public officer concerned is elections;
notoriously undesirable.
(5) Publish at least ten (10) days before an election in a newspaper of general circulation
Subtitle C - COMMISSION ON ELECTIONS certified data on the number of official ballots and election returns and the names and
address of the printers and the number printed by each;
CHAPTER 1 - General Provisions
(6) Refuse, motu propio or upon a verified petition, to give due course to or cancel a
Section 1. Declaration of Policy. - The State shall at all times ensure free, orderly, honest, certificate of candidacy if it is shown that said certificate has been filed to put the election
peaceful and credible elections under a free and open party system which shall be allowed process in mockery or disrepute or to cause confusion among the voters by the similarity
to evolve according to the free choice of the people subject to the provisions of Article IX- of the names of the registered candidates or by other circumstances or acts which clearly
C of the 1987 Constitution of the Philippines. demonstrate that the candidate has no bona fide intention to run for the office for which
the certificate of candidacy has been filed and thus prevent a faithful determination of the
Section 2. Powers and Functions. - In addition to the powers and functions conferred upon true will of the electorate;
it by the constitution, the Commission shall have exclusive charge of the enforcement and
administration of all laws relative to the conduct of elections for the purpose of insuring (7) Postpone, motu propio or upon verified petition and after due notice and hearing
free, orderly, honest, peaceful and credible elections, and shall: whereby all interested parties are afforded equal opportunity to be heard, the election to a
date which should be reasonably close to the date of the election not held, suspended or
(1) Promulgate rules and regulations implementing the provisions of the Omnibus which resulted in a failure to elect but not later than thirty days after the cessation of the
Elections Code or other laws which the Commission is required to enforce and administer; cause for such postponement or suspension of the election or failure to elect, when for any
serious cause such as violence, terrorism, loss or destruction of election paraphernalia or
(2) Fix other reasonable periods for certain pre-election requirements in order that voters records, force majeure, and other analogous causes the holding of a free, orderly, honest,
shall not be deprived of their rights of suffrage and certain groups of rights granted them in peaceful and credible election should become impossible in any political subdivision.
the Omnibus Election Code;
(8) Call for the holding or continuation of election not held in any polling place where on
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account of force majeure, violence, terrorism, fraud or other analogous causes the election not less than thirty days prior to the effectivity of the use of such devices;
has not been held on the date fixed, or had been suspended before the hour fixed by law
for the closing of the voting, or after the voting and during the preparation and the (16) Constitute a pool of standby-teachers from which substitutes shall be drawn in case a
transmission of the election returns or in the custody or canvass thereof, such election member/s of the Board of Election Inspectors who, for one reason or another, failed to
results in a failure to elect, and in any of such cases the failure or suspension of election report or refused to act as such on the day of election.
would affect the result of the election. Such call should be on the basis of a verified
petition by any interested party and after due notice and hearing and the new date should (17) Carry out a continuing and systematic campaign through newspapers of general
be reasonably close to the date of the election not held, suspended or which resulted in a circulation, radio and other media forms to educate the public and fully inform the
failure to elect but not later than thirty (30) days after the cessation of the cause of such electorate about election laws, procedures, decisions, and other matters relative to the
postponement or suspension of the election or failure to elect. works and duties of the Commission and the necessity of clean, free, orderly, honest,
peaceful and credible electoral processes;
(9) Call a special election to elect the member to serve the unexpired portion in case a
vacancy arises in the Senate or in the House of Representatives eighteen (18) months or (18) Accredit non-partisan groups or organizations of citizens from the civic, youth,
more before a regular election, to be held within sixty (60) days after the vacancy occurs; professional, education, business or labor sectors known for their probity, impartiality and
integrity with the membership and capability to undertake a coordinated operation and
(10) Summon the parties to a controversy pending before it, issue subpoena duces tecum activity to assist it in the implementation of the provisions of Omnibus Election Code and
and take testimony in any investigation or hearing before it, and delegate such power to the resolutions, orders and instructions of the Commission for purpose of ensuring free,
any officer of the Commission who shall be a member of the Philippine Bar. In case of orderly, honest, peaceful and credible elections in any constituency. Such groups or
failure of a witness to attend, the Commission, upon proof of service of the subpoena to organization shall functions under the direct and immediate control and supervision of the
said witness, may issue a warrant to arrest the witness and bring him before the Commission;
Commission or the officer before whom his attendance is required;
Any controversy submitted to the Commission shall, after compliance with the (19) Conduct hearings on controversies pending before it in the cities or provinces upon
requirements of due process, be immediately heard and decided by it within sixty (60) proper motion of any party, taking into consideration the materiality and number of
days from the date of its submission for decision or resolution. No decision or resolution witnesses to be presented, the situation prevailing in the area and the fund available for the
shall be rendered by the Commission either en banc or by division unless taken up in a purpose;
formal session properly convened for the purpose;
The Commission may when necessary, avail itself of the assistance of any national or local (20) Have exclusive jurisdiction over all pre-proclamation controversies. It may motu
law enforcement agency and or instrumentality of the government to execute under its proprio or upon written petition, and after due notice and hearing, order the partial or total
direct and immediate supervision any of its final decisions, orders, instruction or rulings; suspension of the proclamation of any candidate-elect or annul partially or totally any
proclamation, if one has been made, as the evidence shall warrant. Notwithstanding the
(11) Punish for contempt according to the procedure, and with the same penalties pendency of any preproclamation controversy, the Commission may, motu propio or upon
provided, in the Rules of Court. Any violation of any final and executory decision, order filing of a verified petition and after due notice and hearing, order the proclamation of
or ruling of the Commission shall constitute contempt thereof; other winning candidates whose election will not be affected by the outcome of the
controversy.
(12) Enforce and execute its decisions, directives, orders and instructions which shall have
precedence over those emanating from any other authority, except the Supreme Court and (21) Have the exclusive power, through its duly authorized legal officers, to conduct
those issued in habeas corpus proceedings; preliminary investigation of all election offenses punishable under the Omnibus Election
Code and to prosecute the same. The Commission may avail itself of the assistance of
(13) Prescribe the forms to be used in the election, plebiscite or referendum, recall or other prosecuting arms of the government:
initiative;
(14) Procure any supplies, equipment, materials or services needed for the holding of the Provided, however, that in the event that the Commission fails to act on any complaint
election by public bidding; but if it finds the requirements of public bidding impractical to within four (4) months from its filing, the complainant may file the complaint with the
observe, then by negotiations or sealed bids, and in both cases, the accredited parties shall office of the fiscal or with the Department of Justice for proper investigation and
be duly notified; prosecution, if warranted; and

(15) Prescribe the use or adoption of the latest technological and electronic devices, taking (22) Perform such other functions as may be provided by law.
into account the situation prevailing in the area and funds available for the purpose. The
Commission shall notify the authorized representatives of accredited political parties and Section 3. Enforcement Powers. - For the effective enforcement of the provisions of the
candidates in areas affected by the use or adoption of technological and electronic devices Omnibus Election Code, the Commission is further vested and charged with the following
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powers, duties and responsibilities: be the Chief Executive Officer of the Commission, shall:

1. To stop any illegal activity, or confiscate, tear down, and stop any unlawful, libelous, (1) Execute and administer the policies, decisions, orders and resolutions approved by the
misleading or false election propaganda, after due notice and hearing; and Commission;

2. To inquire into the financial records of candidates and any organization or group of (2) Direct and supervise the operations and internal administration of the Commission;
persons, motu propio or upon written representation for probable cause by any candidate,
organization or group of persons or qualified voter, after due notice and hearing. (3) Sign appointments of subordinate officials and employees made by the Commission
and enforce decisions on administrative discipline involving them;
For purposes of this Section, the Commission may avail itself of the assistance of the
Commission on Audit, the Central Bank, the National Bureau of Investigation, the Bureau (4) Make temporary assignments, rotate and transfer personnel in accordance with the
of Internal Revenue, the Armed Forces of the Philippines, the Integrated National Police of provisions of the civil service law;
the Philippines, barangay officials and other agencies of the government.
(5) Submit an annual budget to the Commission for its approval;
CHAPTER 2 - The Commission Proper
(6) Delegate his authority, in whole or in part, to other officials of the Commission, in
Section 4. Composition and Qualifications. - There shall be a Commission on Elections accordance with the rules and regulations of the Commission; and
composed of a Chairman and six (6) Commissioners who shall be natural born citizens of
the Philippines and, at the time of their appointment, at least thirty-five (35) years of age, (7) Perform such other duties as may be authorized by the Commission.
holders of a college degree, and must not have been candidates for any elective position in
the immediately preceding elections. However, a majority thereof, including the Section 8. Executive Director; Powers and Duties. - The Executive Director of the
Chairman, shall be members of the Philippine Bar who have been engaged in the practice Commission shall:
of law for at least ten (10) years.
(1) Advise and assist the Chairman in the formulation and implementation of the
Section 5. Appointment and Term of Office. - The Chairman and the Commissioners shall objectives, policies, plans and programs of the Commission;
be appointed by the President with the consent of the Commission on Appointments for a
term of seven (7) years without reappointment. Of those first appointed, three (3) (2) Serve as the principal assistant of the Chairman in the overall supervision of the
Members shall hold office for seven (7) years, two (2) members for five (5) years, and the administrative business of the Commission;
last members for three (3) years, without reappointment. Appointment to any vacancy
shall be only for the unexpired term of the predecessor. In no case shall any Member be (3) Oversee all the operational activities of the Commission;
appointed or designated in a temporary or acting capacity.
(4) Coordinate the programs and projects of the Commission and be responsible for its
Section 6. Disqualifications. - The Chairman and members of the Commission shall be economical, efficient and effective administration;
subject to the canons of judicial ethics in the discharge of their functions.
(5) Serve as deputy to the Chairman in all matters relating to the operational activities of
No chairman or commissioners shall sit in any case in which he has manifested bias or the Commission;
prejudice or antagonism against any party thereto and in connection therewith, or in any
case in which he would be disqualified under the Rules of Court. If it be claimed that the (6) Administer oaths in connection with all matters relating to the business of the
chairman or a commissioner is disqualified as above provided, the party objecting to his Commission; and
competency may file his objection in writing with the Commission stating the ground (7) Perform such other duties as may be assigned by the Chairman.
therefor. The official concerned shall continue to participate in the hearing or withdraw
therefrom in accordance with his determination of the question of his disqualification. The Section 9. Staff and Operating Units. - The Commission shall have the following staff and
decision shall forthwith be made in writing and filed with the other papers of the case in operating units: Office of the Chairman, Office of the Executive Director, Office of the
accordance with the Rules of Court. If a disqualification should result in a lack of quorum Electoral Contests Adjudication, Regional Offices, Election and Barangay Affairs
in the Commission sitting en banc, the Presiding Justice of the Court of Appeals shall Department, Law Department, Election Records and Statistics Department, Administrative
designate a justice of said court to sit in said case for the purpose of hearing and reaching a Service Department, Planning Department, Personnel Department, Finance Services
decision thereon. Department and Education and Information Department.
Section 10. Duties and Functions of Offices and Departments of the Commission. - The
Section 7. Chairman as Executive Officer; Powers and Duties. - The Chairman, who shall different offices and departments of the Commission shall operate in accordance with their
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respective duties and functions assigned to them by the Commission, subject to the Philippines and, at the time of their appointment, at least thirty-five years of age, and must
requirements of efficiency, economy and effectiveness, and pertinent Budget and Civil not have been candidates for any elective position in the elections immediately preceding
Service Law, rules and regulations. their appointment. However, a majority thereof shall be members of the Philippine Bar.

CHAPTER 3 - The Fielf Office Section 2. Powers and Functions. - The Commission on Human Rights shall:

Section 11. Field Office of the Commission. - The Commission shall have the following (1) Investigate, on its own or on complaint by any party, all forms of human rights
field offices: violations involving civil and political rights;

(1) Regional Election Office, headed by the Regional Election Director and assisted by the (2) Adopt its operational guidelines and rules of procedure, and cite for contempt
Assistant Regional Director and such other subordinate officers or employees as the violations thereof in accordance with the Rules of Court;
Commission may appoint;
(2) Provincial Election Office, headed by the Provincial Election Supervisor and assisted (3) Provide appropriate legal measures for the protection of human rights of all persons
by such other subordinate officers or employees as the Commission may appoint; within the Philippines, as well as Filipinos residing abroad, and provide for preventive
measures and legal aid services to the under-privileged whose human rights have been
(3) City Municipal Election Office, headed by the City/Municipal Election Registrar who violated or need protection;
shall be assisted by an election clerk and such other employees as the Commission may
appoint. (4) Exercise visitorial powers over jails prisons, or detention facilities;
The Commission may delegate its powers and functions or order the implementation or
enforcement of its orders, rulings or decisions through the heads of its field offices. (5) Establish a continuing program of research, education and information to enhance
respect for the primacy of human rights;
Section 12. Qualifications of Heads of field Offices. - Only members of the Philippines
Bar shall be eligible for appointment to the position of regional director, assistant regional (6) Recommend to the Congress effective measures to promote human rights and to
director, provincial election supervisor and election registrar. However, if there are no provide for compensation to victims of violations of human rights, or their families;
members of the Philippine Bar available for appointment as election registrar, except in
cities and capital towns, graduates of duly recognized schools of law, liberal arts, (7) Monitor the Philippine Government's compliance with international treaty obligations
education or business administration who possess the appropriate civil service eligibility on human rights;
may be appointed to said position.
(8) Grant immunity from prosecution to any person whose testimony or whose possession
Section 13. Changes in the Composition, Distribution of Assignment of Field Offices. - of documents or other evidence is necessary or convenient to determine the truth in any
The Commission may make changes in the composition, distribution and assignment of investigation conducted by it or under its authority;
field offices, as well as its personnel, whenever the exigencies of the service and the
interest of free, orderly, honest, peaceful and credible election so require: Provided, That (9) Request the assistance of any department, bureau, office, or agency in the performance
such changes shall be effective and enforceable only for the duration of the election period of its functions;
concerned and shall not affect the tenure of office of the incumbents of positions affected
and shall not constitute a demotion, either in rank of salary, nor result in a change of (10) Appoint its officers and employees in accordance with law; and
status; and Provided, further, that there shall be no changes in the composition, distribution
or assignment within thirty (30) days before election, except for cause and after due notice (11) Perform such other duties and functions as may be provided by law.
and hearing, and that in no case shall a regional or assistant regional director be assigned
to a region, or a provincial election supervisor to a province, or a city municipal election Section 3. Inhibitions Against Commissioners. - The Chairman and the Members of the
registrar to a city or municipality, where he and/or his spouse are related to any candidate Commission on Human Rights shall not, during their tenure, hold any other office or
within the fourth civil degree of consanguinity or affinity as the case may be. employment. Neither shall they engage in the practice of any profession or in the active
management or control of any business which in any way will be affected by the functions
Title II - OTHER BODIES of their office, nor shall they be financially interested, directly or indirectly, in any contract
with, or in any franchise or privilege granted by the government, any of its subdivisions,
Subtitle A - Commission on Human Rights agencies, or instrumentalities, including government-owned or controlled corporations or
their subsidiaries.
Section 1. Composition and Qualification. - The Commission on Human Rights shall be
composed of a Chairman and four (4) Members who must be natural-born citizens of the Section 4. Term of Office. - The Chairman and the Members of the Commission on Human
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Rights shall be appointed by the President for a term of seven years without (7) Determine the causes of inefficiency; red tape, mismanagement, fraud, and corruption
reappointment. Appointment to any vacancy shall be only for the unexpired term of the in the Government and make recommendations for their elimination and the observance of
predecessor. high standards of ethics and efficiency;

Section 5. Compensation. - The Chairman and the Members of the Commission on Human (8) Promulgate its rules of procedure and exercise such other powers or perform such
Rights shall receive the same salary as the Chairman and Members, respectively, of the functions or duties as may be provided by law.
Constitutional Commissions, which shall not be decreased during their term of office.
Section 3. Action and Complaints. - The Ombudsman and his Deputies, as protectors of
Section 6. Annual Appropriations. - The approved annual appropriations of the the people, shall act promptly on complaint filed in any form or manner against public
Commission on Human Rights shall be automatically and regularly released. officials or employees of the Government, or any subdivision, agency or instrumentality
thereof, including government-owned or controlled corporations, and shall, in appropriate
Subtitle B - Office of the Ombudsman cases, notify the complainants of the action taken and the result thereof.

Section 1. Composition. - (1) The Office of the Ombudsman shall be headed by the Section 4. Fiscal Autonomy. - The Office of the Ombudsman shall enjoy fiscal autonomy.
Ombudsman, to be known as the Tanod-bayan, who shall be assisted by one overall Its approved annual appropriations shall be automatically and regularly released.
Deputy and at least by one Deputy each for Luzon, Visayas and Mindanao. A separate
Deputy for the military establishment may likewise be appointed. Subtitle C - The National Economic and Development Authority

(2) It shall have such other officials and employees, to be appointed by the Ombudsman CHAPTER 1 - General Provisions
according to the Civil Service Law.
Section 1. Declaration of Policy. - The State shall ensure that all socio-economic programs
Section 2. Powers and Functions. - The Office of the Ombudsman shall: and activities of the government shall be programmed within the context of well-
formulated and consistent long, medium, and short-term development plans and policies to
(1) Investigate on its own, or on complaint by any person, any act or omission of any promote both the growth of the economy and the equitable distribution of the benefits of
public official, employee, office or agency, when such act or omission appears to be such growth to the members of society. To this end, it is recognized that the formulation of
illegal, unjust, improper, or inefficient; the required socio-economic development policies and plans is a vital process that calls for
the participation of the various government agencies and private sector institutions and
(2) Direct, upon complaint or at its own instance, any public official or employee of the individuals concerned, both on national, regional, and local levels. This process of policy
Government, or any subdivision, agency or instrumentality thereof, as well as of any and plan formulation, however needs to be coordinated closely by a central government
government-owned or controlled corporation with original charter, to perform and agency to ensure consistency of these plans and policies and optimal use of the nation's
expedite any act or duty required by law, or to stop, prevent, and correct any abuse or scarce resources.
impropriety in the performance of duties;
Section 2. National Economic and Development Authority. - The National Economic and
(3) Direct the officer concerned to take appropriate action against a public official or Development Authority shall serve as an independent planning agency of the government.
employee at fault, and recommend his removal, suspension, demotion, fine, censure, or Section 3. Powers and Functions of the Authority. - The powers and functions of the
prosecution, and ensure compliance therewith; Authority are vested in the NEDA Board.

(4) Direct the officer concerned, in any appropriate case, and subject to such limitations as The Authority shall primarily be responsible for formulating continuing, coordinated and
may be provided by law, to furnish it with copies of documents relating to contracts or fully integrated social and economic policies, plans and programs, on the basis of the
transactions entered into by his office involving the disbursement or use of public funds or following:
properties, and report any irregularity to the Commission on Audit for appropriate action;
(1) The State aims to achieve objectives of growth coupled with equity;
(5) Request any government agency for assistance and information necessary in the
discharge of its responsibilities, and to examine, if necessary, pertinent records and (2) Development leading to the attainment of the above mentioned goals is a multi-faceted
documents; process that calls for the coordination and integration of policies, plans, programs and
projects of all sectors of society;
(6) Publicize matters covered by its investigation when circumstances so warrant and with
due prudence; (3) In the formulation of basic policies, plans, programs and projects, there shall be
maximum participation by and consultation with concerned private sector groups,
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community organizations and beneficiaries and local government units in order to ensure Section 6. Meetings. - The NEDA Board shall meet at least once a month or as frequently
that priority needs are incorporated into such policies, plans, programs and projects; as is necessary to discharge its responsibilities as called for by the President. When the
President is unable to attend a meeting, the Director-General of the NEDA may preside as
(4) National plans shall be in fact the sum of nationally and regionally identified targets Chairman, in the absence of any Presidential preference.
and strategies and locally formulated approaches to perceived local needs and priorities,
carried out within the framework of national strategies; The President however continues to have the power to designate from among the members
of the NEDA Board the Chairman that can appropriately represent the President, to preside
(5) Major socio-economic policies, plans, programs and projects of different government over specific meetings.
agencies must be properly coordinated with the Authority at both the national and regional
levels prior to their adoption, in order to ensure their consistency with established national Section 7. National Economic Development Authority Inter-agency Committees. - To assist
priorities and coordination with other policies, plans, programs and projects of the the NEDA Board in the performance of its functions, there are hereby created the
government; and following committees which shall hereafter be under the direct control of the NEDA Board
and shall submit all their recommendations to the President for approval on matters
(6) The linkage between development planning, programming and budgeting shall be of involving their respective concerns. The Chairman of these committees shall be designated
the highest priority in planning and budgeting activities. by the President. The NEDA Board shall likewise determine where the technical staff of
the said committees shall be based.
The Authority, after due consultation with the private sector, community organizations and
beneficiaries, local government units and appropriate public agencies, shall be responsible (1) Development Budget Coordination Committee (DBCC) - The DBCC, to be composed
for studying, reviewing, formulating and recommending continuing, coordinated and fully of the Director-General of the National Economic Development Authority Secretariat, the
integrated economic and development policies, plans and programs, including the Executive Secretary and the Secretaries of Finance and of Budget and Management, shall
formulation of annual and medium-term public investment programs, programming have the following functions:
official development assistance in the form of grants and concessional loans from foreign
governments and multilateral agencies and organizations and the monitoring and (a) Recommend for President's approval the level of the annual government expenditure
evaluation of plan implementation. program and the ceiling of government spending for economic and social development,
national defense, general government and debt service;
Section 4. Composition of the Authority. - The Authority shall be composed of two
separate and distinct entities: the Board and the Secretariat. (b) Recommend to the President the proper allocation of expenditures for each
development activity between current operating expenditures and capital outlay; and
CHAPTER 2 - NEDA BOARD
(c) Recommend to the President the amount set to be allocated for capital outlay under
Section 5. Composition of the NEDA Board. - The NEDA Board shall be composed of the each development activity for the various capital or infrastructure projects.
following:
(2) Investment Coordination Committee (ICC) - The ICC to be composed of the Director-
The President - Chairman General of the National Economic Development Authority Secretariat, the Executive
Director-General of the NEDA Secretariat - Vice-Chairman Secretary, the Secretaries of Finance, Agriculture, Trade and Industry and of Budget and
Executive Secretary - Member Management and the Governor of the Central Bank shall have the following functions:
Secretary of Finance - Member
Secretary of Trade & Industry - Member (a) Evaluate the fiscal, monetary and balance of payments implications of major national
Secretary of Agriculture - Member projects and recommend to the President the timetable for the implementation of these
Secretary of Environment & Natural Resources - Member projects on a regular basis; and
Secretary of Public Works and Highways - Member
Secretary of Budget and Management - Member (b) Recommend to the President a domestic and foreign borrowing program updated each
Secretary of Labor & Employment - Member year; and subsequently submit to the President a status of fiscal, monetary and balance of
Secretary of Local Government - Member payments implications of major national projects.

The President may, however, revise the membership of the NEDA Board whenever the (3) Committee on Social Development (SDC) - The SDC to be composed of the Director-
same is deemed necessary for the effective performance of the Board's functions through General of the National Economic Development Authority Secretariat, the Executive
an administrative or memorandum order. Secretary, and the Secretaries of Education, Culture and Sports, Labor and Employment,
Health, Local Government, Agrarian Reform, Agriculture and Social Welfare and
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Development shall have the following functions:

Section 8. The NEDA Secretariat. - The Secretariat of NEDA shall have the following
(a) Advise the President and the NEDA Board on matters concerning social development, functions:
including education, manpower, health and nutrition, population and family planning, (1) Serve as the research and technical support arm of the NEDA Board;
housing, human settlements and the delivery of other social services; (2) Provide through its various organizational units, technical staff support and assistance,
including the conduct of studies and development of policy measures and other
(b) Coordinate the activities of government agencies concerned with social development; recommendations, on the various aspects of the substantive functions of development
and planning and policy formulation, and coordination, evaluation and monitoring of plan
implementation;
(c) Recommend to the President government policies, programs and projects on social
development consistent with national development objectives and priorities. (3) Serve as the Secretariat of the NEDA Board; and

(4) Committee on Infrastructure (INFRACOM) - the INFRACOM to be composed of the (4) Perform such other functions as may be assigned to it by the NEDA Board to achieve
Director-General of the National Economic Development Authority Secretariat, the its goals and objectives.
Executive Secretary, and the Secretaries of Public Works and Highways, Transportation
and Communications, Finance, and Budget and Management shall have the following Section 9. Structural Organization. - The NEDA Secretariat shall be composed of the
functions: Director-General, three (3) Deputy Directors-General, five (5) Assistant Directors-
General, the National Development Office, the Regional Development Office, the Central
(a) Advise the President and the NEDA Board or matters concerning infrastructure Support Office and the Regional Offices.
development including highways, airports, seaports and shore protection; railways; power
generation, transmission and distribution; telecommunications; irrigation, flood control Section 10. Director-General. - The Director-General shall head the Secretariat and shall
and drainage; water supply; national buildings for government offices; hospitals, sanitation likewise serve as Vice-Chairman of the NEDA Board. He shall be appointed by the
and related buildings; state colleges and universities, elementary and secondary school President and shall carry the rank and title of Secretary of Socio-Economic Planning and
buildings; and other public works; shall be a member of the Cabinet.
As Chief Executive Officer, he shall exercise general supervision and control over its
(b) Coordinate the activities of agencies, including government-owned or controlled technical and administrative personnel.
corporations concerned with infrastructure development; and
Section 11. Deputy Directors-General. - The Director General shall be assisted by three
(c) Recommend to the President government policies, programs and projects concerning (3) Deputy Directors-General to be appointed by the President, one to be responsible for
infrastructure development consistent with national development objectives and priorities. the National Development Office, one, for the Regional Development Office and one, for
the Central Support Office.
(5) Committee on Tariff and Related Matters (TRM) - The TRM to be composed of the
Director-General of the National Economic Development Authority Secretariat, the Section 12. Assistant Directors-General. - The Director-General shall also be assisted by
Executive Secretary, the Secretaries of Trade and Industry, Foreign Affairs, Agriculture, five (5) Assistant Directors-General to be appointed by the President, who shall be
Environment and Natural Resources and Budget and Management, the Government of the assigned to assist the Deputy Directors-General in their tasks of coordinating and
Central Bank and the Chairman of the Tariff Commission shall have the following supervising their respective Offices.
functions:
Section 13. National Development Office. - The National Development Office shall
(a) Advise the President and the NEDA Board on tariff and related matters, and on the provide technical staff support as may be required by the NEDA Board in coordinating the
effects on the country of various international developments; formulation of national and sectoral policies, plans and programs; monitor macro-
economic and sectoral performances; prepare the necessary economic reports; conduct
(b) Coordinate agency positions and recommend national positions for international economic and development studies on macro-level plans and policies; and perform such
economic negotiations; and other appropriate planning tasks as may be assigned by the Director-General.

(c) Recommend to the President a continuous rationalization program for the country's It shall be composed of the following:
tariff structure.
(1) National Planning and Policy Staff;
CHAPTER 3 - NEDA SECRETARIAT (2) Agriculture Staff;
(3) Trade, Industry and Utilities Staff;
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(4) Infrastructure Staff; (3) Leyte Sab-A Basin Development Authority.

(5) Social Development Staff; and
(6) Public Investment Staff. The National Council for Integrated Area Development (NACIAD) and the Central
Visayas Regional Projects Office (CVRPO) are hereby transferred to the Authority which
Section 14. Regional Development Office. - The Regional Development Office shall shall, within one (1) year from the date of effectivity of this Code, recommend their
provide technical staff support as may be required by the implementing agencies in the transfer to the appropriate department in conjunction with the Department of Budget and
regions; monitor regional and inter-regional development policies, plans and programs; Management. The Authority shall further review the functions and activities of all other
prepare integrated reports on regional planning; conduct studies on regional development Integrated Area Development programs and projects and any other programs requiring
policies; and perform such other planning tasks as may be assigned by the Director- multi-sectoral and/or multi-disciplinary approaches in order to recommend the appropriate
General. disposition and supervision of the same.
The Authority shall furthermore review the mandate, objectives and functions of all
It shall be composed of the following: development authorities in order to recommend such dispositions or revisions of their
charters, as may be deemed advisable.
(1) Regional Development Coordination Staff;
(2) Project Monitoring Staff; and BOOK VI - NATIONAL GOVERNMENT BUDGETING
(3) Regional Offices.
CHAPTER 1 - General Provisions
In each of the administrative regions, there shall be a regional office which shall be headed
by a Regional Director who shall report to the Deputy Director-General for Regional Section 1. Constitutional Policies on the Budget. - (1) All appropriations, revenue or tariff
Development Office. The Regional Director shall be appointed by the President. bills, bills authorizing increase of the public debt, bills of local application, and private
bills shall originate exclusively in the House of Representatives but the Senate may
Section 15. Central Support Office. - The Central Support Office shall be responsible for propose or concur with amendments.
providing technical assistance and support services to the Secretariat's organizational units
in the areas of development administration, internal management improvement, legal (2) The Congress may not increase the appropriations recommended by the President for
services, development information, administrative services, and perform such other the operation of the Government as specified in the budget. The form, content and manner
support service tasks as may be assigned by the Director-General. of preparation of the budget shall be prescribed by law.

It shall be composed of the following: (3) No provision or enactment shall be embraced in the general appropriations bill unless
it relates specifically to some particular appropriation to which it relates.
(1) Management Staff;
(2) Legal Staff; (4) The procedures in approving appropriations for the Congress shall strictly follow the
(3) Administrative Staff; procedure for approving appropriations for other departments and agencies.
(4) Management Information System Staff; and
(5) Development Information Staff. (5) A special appropriations bill shall specify the purpose for which it is intended, and
shall be supported by funds actually available as certified by the National Treasurer or to
CHAPTER 4 - Attached Agencies be raised by a corresponding revenue proposal therein.

Section 16. Retained Agencies. - The following agencies, currently attached to the (6) No law shall be passed authorizing any transfer of appropriations. However, the
Authority, shall continue to be so attached for purposes of supervision; President, the President of the Senate, the Speaker of the House of Representatives, the
Chief Justice of the Supreme Court and the heads of Constitutional Commissions may, by
(1) Philippine Institute for Development Studies: law, be authorized to augment any item in the general appropriations laws for their
(2) Philippine National Volunteer Service Coordinating Agency; and respective offices from savings in other items of their respective appropriations.
(3) Tariff Commission.
(7) Discretionary funds appropriated for particular official shall be disbursed only for
The Authority shall arrange for the transfer of the functions of the following agencies to public purposes to be supported by appropriate vouchers and subject to such guidelines as
the Regional Development Councils concerned or other agencies as may be appropriate: may be prescribed by law.
(8) If, by the end of any fiscal year, the Congress shall have failed to pass the general
(1) Kalinga Special Development Region; appropriations bill for the ensuing fiscal year, the general appropriations law for the
(2) Laguna Lake Development Authority; preceding fiscal year shall be deemed reenacted and shall remain in force and effect until
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the general appropriations bill is passed by the Congress.

(13) "Project" means a component of a program covering a homogenous group of
(9) Fiscal autonomy shall be enjoyed by the Judiciary, Constitutional Commissions, Office activities that results in the accomplishment of an identifiable output.
of the Ombudsman, Local Government and Commission on Human Rights.
CHAPTER 2 - BUDGET POLICY AND APPROACH
Section 2. Definition of Terms. - When used in this Book:
Section 3. Declaration of Policy. - It is hereby declared the policy of the State to formulate
(1) "Appropriation" refers to an authorization made by law or other legislative enactment, and implement a National Budget that is an instrument of national development, reflective
directing payment out of government funds under specified conditions or for specified of national objectives, strategies and plans. The budget shall be supportive of and
purposes. consistent with the socio-economic development plan and shall be oriented towards the
(2) "Allotment" refers to an authorization issued by the Department of the Budget to an achievement of explicit objectives and expected results, to ensure that funds are utilized
agency, which allows it to incur obligation for specified amounts contained in a legislative and operations are conducted effectively, economically and efficiently. The national
appropriation. budget shall be formulated within the context of a regionalized government structure and
(3) "Budget" refers to a financial plan required to be prepared pursuant to Section 16 (1) , borrowings of all levels of government and of government-owned or controlled
Article VIII of the Constitution, reflective of national objectives, strategies and programs. corporations. The budget shall likewise be prepared within the context of the national
long-term plan and of a long-term budget program.
(4) "Current operating expenditures" refers to appropriations for the purchase of goods and
services for current consumption or for benefits expected to terminate within the fiscal Section 4. Planning and Budgeting Linkage. - The budget shall be formulated as an
year. instrument for the attainment of national development goals and as part of the planning-
programming-budgeting continuum. Levels of revenue, expenditure and debt shall be
(5) "Capital outlay" or "capital expenditures" refers to an appropriation for the purchase of established in relation to macro-economic targets of growth, employment levels, and price
goods and services, the benefits of which extend beyond the fiscal year and which add to level change, and shall be developed consistent with domestic and foreign debt, domestic
the assets of the Government, including investments in the capital of government-owned credit and balance of payments objectives for the budget period. The aggregate
or controlled corporations and their subsidiaries. magnitudes of the budget shall be determined in close consultation among the planning
and fiscal agencies of government. Budgetary priorities shall be those specified in the
(6) "Continuing appropriation" refers to an appropriation available to support obligations approved national plans, keeping in mind the capability and performance of the
for a specified purpose or project, even when these obligations are incurred beyond the implementing agencies concerned. Agency budget proposals shall explicitly state linkage
budget year. to approved agency plans.

(7) "Expected result" means service, product, or benefit that will accrue to the public, Section 5. National Resource Budget. - The finances of government shall be analyzed and
estimated in terms of performance measures or targets. determined as the aggregate of revenue, expenditure and debt of all units of government,
including the national government and its agencies and instrumentalities, local government
(8) "Fiscal year" refers to the period beginning with the first day of January and ending units and government-owned or controlled corporations. The national government budget
with the thirty-first day of December of each calendar year. shall be evolved within the framework of the total impact of government activity on the
national economy. The budgets of government corporations and local governments shall
(9) The "Government" means the National Government, including the Executive, the be consistent in form and timing with that of the national government, to facilitate
Legislative and the Judicial Branches, and the Constitutional Commissions. comprehensive evaluation.

(10) "Department and agency" and "department or agency" include all departments, Section 6. Regional Budgeting. - The budgets of national government agencies shall take
bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, into full and explicit consideration the goals, plans and requirements of their respective
administrations, centers, institutes, state colleges and universities, and all other regional offices, in the interest of full government response to local thinking and initiative.
establishments and instrumentalities of the National Government as defined in the The budget preparation process shall originate at regional and local levels, and shall be
preceding paragraph. consolidated and reviewed by the central offices of the various national agencies. The
regional development strategies and plans, including physical framework and resource-use
(11) "Obligation" refers to an amount committed to be paid by the Government for any plans, shall be considered in the preparation of the budget.
lawful act made by an authorized officer for and in behalf of the Government.
Section 7. Long Term Budgeting. - The annual budgets of the national government shall be
(12) "Program" refers to the functions and activities necessary for the performance of a prepared as an integral part of a long-term budget picture. The long-term economic and
major purpose for which a government agency is established. physical framework plans of government, multi-year requirements of approved programs
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and projects, organizational and personnel development strategies, and other commitments The budget shall be presented to the Congress in such form and content as may be
entered into or otherwise assumed by government shall be specified in the budget process. approved by the President and may include the following:

Section 8. Development Projects. - The development process requires the implementation (1) A budget message setting forth in brief the government's budgetary thrusts for the
of major development projects of such size as to significantly affect the infrastructure budget year, including their impact on development goals, monetary and fiscal objectives,
program, debt ceilings, the balance of payments, domestic credit, and government and generally on the implications of the revenue, expenditure and debt-proposals; and
expenditure levels. The budget process shall formally consider the timing of major (2) Summary financial statements setting forth:
national projects, in order to ensure the observance of established fiscal, monetary,
international payments, and other constraints. (a) Estimated expenditures and proposed appropriations necessary for the support of the
Government for the ensuing fiscal year, including those financed from operating revenues
Section 9. Performance and Financial Review. - The analysis of agency operating and from domestic and foreign borrowings;
performance, the evaluation of performance, the evaluation of performance relative to
costs incurred and the review of agency operating systems and procedures are inherent (b) Estimated receipts during the ensuing fiscal year under laws existing at the time the
parts of the budget process. Agencies shall therefore design and implement (1) budget is transmitted and under the revenue proposals, if any, forming part of the year's
management information systems yielding both performance and financial information financing program;
which will adequately monitor and control budget implementation, and (2) improvements (c) Actual appropriations, expenditures, and receipts during the last completed fiscal year;
in operating systems, procedures and practices, so as to ensure that the targets approved in (d) Estimated expenditures and receipts and actual or proposed appropriations during the
budget authorization are in fact attained at minimum cost. fiscal year in progress;

Section 10. Compensation and Position Classification. - The size of personnel services (e) Statements of the condition of the National Treasury at the end of the last completed
expenditures relative to the total budget and the number of agencies and personnel in fiscal year, the estimated condition of the Treasury at the end of the fiscal year in progress
government call for an effective national compensation and position classification policy. and the estimated condition of the Treasury at the end of the ensuing fiscal year, taking
The Constitutional principle of a single compensation scheme for the government and its into account the adoption of financial proposals contained in the budget and showing, at
instrumentalities is one of the bases of the government budget process. the same time, the unencumbered and unobligated cash resources;

CHAPTER 3 - BUDGET PREPARATION (f) Essential facts regarding the bonded and other long-term obligations and indebtedness
of the Government, both domestic and foreign, including identification of recipients of
Section 11. Submission of the Budget. - The President shall, in accordance with Section 22 loan proceeds; and
(1), article VII of the Constitution, submit within thirty (30) days from the opening of each (g) Such other financial statements and data as are deemed necessary or desirable in order
regular session of the Congress as the basis for the preparation of the General to make known in reasonable detail the financial condition of the government.
Appropriations Act, a national government budget estimated receipts based on existing
and proposed revenue measures, and of estimated expenditures. Section 13. Budget Levels. - The ordinary income of government shall be used primarily to
provide appropriations for current operations, except in case of a national emergency or
The President shall include in the budget submission the proposed expenditure level of the serious financial stress, the existence of which has been duly proclaimed by the President.
Legislative and Judicial Branches and of Constitutional bodies, which shall have
undergone the same process of evaluation and which shall have been subject to the same The level of aggregate revenue expenditure and debt shall be jointly recommended to the
budgetary policies and standards applicable to agencies in the Executive Branch. President by the Department of Budget and Management, the Department of Finance, the
National Economic and Development Authority and the Central Bank of the Philippines,
The President may transmit to the Congress from time to time, such proposed acting within the Development Budget Coordination Committee of the National Economic
supplemental or deficiency appropriations as are, in his judgment, (1) necessary on and Development Authority.
account of laws enacted after the transmission of the Budget, or (2) otherwise needed in No appropriations for current operations and capital outlays of the Government shall be
the public interest. proposed unless the amount involved is covered by the ordinary income, or unless it is
supported by a proposal creating additional sources of funds or revenue, including those
Section 12. Form and Content of the Budget. - The budget proposal of the President shall generated from domestic and foreign borrowings, sufficient to cover the same. Likewise,
include current operating expenditures and capital outlays. It shall comprise such funds as no appropriation for any expenditure, the amount of which is not covered by the estimated
may be necessary for the operation of the programs, projects and activities of the various income from the existing sources of revenue or available current surplus, may be
departments and agencies. The proposed General Appropriations Act and other proposed, unless it is supported by a proposal creating an additional source of funds
Appropriations Acts necessary to cover the budget proposals shall be submitted to the sufficient to cover the same.
Congress to accompany the President's budget submission.
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Proposals creating additional sources of funds shall be prepared in the form of revenue government agencies in the national government budget, and release funds to national
bills. government agencies in accordance with the approved regional distribution of
The provisions of this section shall not be construed as impairing in any way the power of expenditures, specifying the region of destination.
the Congress to enact revenue and appropriation bills, nor the authority of the President to Departments and agencies shall sub-allot in full and without the imposition of reserves, the
propose special revenue and appropriation bills after the submission of the budget. approved budget allocation of their various regional offices, except as may be authorized
by the Secretary, in case realignment of expenditures prove to be necessary in the course
Section 14. Budget Estimates. - Each head of department, office or agency of the National of budget execution. The Secretary shall issue the rules and regulations needed to
Government, including the Legislative and Judicial Branches, and including government implement the provisions of this section.
owned or controlled corporations, shall submit his request for appropriations to the
Department of Budget in accordance with the budget calendar, format, and such rules and Section 16. Budget Evaluation. - Agency proposals shall be reviewed on the basis of their
regulations as may be issued in implementation of this Decree. own merits and not on the basis of a given percentage or peso increase or decrease from a
prior year's budget level, or other similar rule of thumb that is not based on specific
The budget estimates of agencies shall include the following information: justification. Proposed activities, whether new or ongoing, shall be evaluated using a zero-
base approach and on the basis of (1) relationship with the approved development plan, (2)
(1) Objectives, functions, activities, programs and projects showing the general character agency capability as demonstrated by past performance, (3) complemental role with
and relative importance of the work to be accomplished or the services to be rendered, and related activities of other agencies, and (4) other similar criteria. The realization of savings
the principal elements of cost involved; in a given budget year and the consequent non-utilization of funds appropriated or released
to a given agency shall not be a negative factor in the budget evaluation for a subsequent
(2) Linkage of the work and financial proposals to approved development plans; year.
(3) Estimated current operating expenditures and capital outlays, with comparative data
for the preceding and current budget years; Section 17. Foreign-Assisted Projects. - The budgetary implications of foreign-assisted
projects shall be explicitly considered at the time of project design and financing
(4) Identification by region, pursuant to policies on the regionalization of government negotiation. The project study shall specify the cash flow requirements of the project,
operations; among others, for (1) payment of principal and interest, (2) peso component of capital
(5) Financial sources, reflecting all revenues, proceeds of foreign and domestic costs and project preparation, (3) infrastructure and support facilities needed to be directly
borrowings, and other sources, particularly those which accrue to the General Funds; financed by government, (4) operating and other expenditures which will be ultimately
required for General Fund support when the project is implemented, and (5) peso
(6) Contingent liabilities, including national government guarantees of obligations of requirements needed as counterpart. The concurrence of the Department of Budget and
government-owned or controlled corporations and their subsidiaries; Management shall be obtained with respect to peso requirements and implication on
expenditure ceilings.
(7) Brief description of the major thrusts and priority programs and projects for the budget
year, results expected for each budgetary program and project, the nature of work to be Section 18. Coordinating Bodies. - The budgets of coordinating agencies, councils, task
performed, estimated costs per unit of work measurement, including the various objects of forces, authorities, committees, or other similar bodies shall be limited to and used to fund
expenditure for each project; only such planning, coordinating and monitoring functions as are assigned to it. Funds for
implementation shall be budgeted and released to the line implementing agencies
(8) Organization charts and staffing patterns indicating the list of existing and proposed concerned; provided, that the budgets of coordinating bodies may include a lump-sum for
positions with corresponding salaries, and proposals for position classification and salary purposes related to their assigned functions, which lump-sum shall be sub-allotted to
changes, duly supported by adequate justification. implementing agencies and not used by the agency for its own operations: provided,
further, that funds budgeted for a given agency falling within the jurisdiction of a
Section 15. Regional Budget. - The Budgets of national government agencies shall be coordinating body, may be subject to release upon approval by the coordinating agency of
prepared taking into full and careful consideration the opportunities and requirements such release or of the agency's work program.
specific to the various regions of the country. Where they are organized, regional offices
shall originate agency budget proposals, in accordance with approved priorities and Section 19. Budgetary Requirements of Government-Owned or Controlled Corporations. -
guidelines. The internal operating budgets of government-owned or controlled corporations and of
chartered institutions shall be approved by their respective governing boards in accordance
Agencies which are not regionalized shall nonetheless estimate the amounts planned to be with a budget calendar and format as may be approved by the President: Provided, that
spent for each region of the country. such budgets shall be subject to review and approval as part of the budget process in cases
where national government budgetary support is needed, in terms of (a) capital or equity
The Secretary shall identify by region the expenditure programs of the national inputs, (b) operating contributions to support specific activities undertaken by the
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institution as part of its regular functions, and (c) guarantee of the national government for Congress shall not add special provisions in the budget earmarking the use of
obligations or contracts entered into by the corporations: provided, further, that the appropriations for specific programs or activities nor shall it increase the amounts
submission of interim financial statements may be required by the Secretary. specified in special provisions beyond those proposed by the President.
Section 26. Automatic Appropriations. - All expenditures for (1) personnel retirement
Section 20. Tax and Duty Exemptions. - All units of government, including government- premiums, government service insurance, and other similar fixed expenditures, (2)
owned or controlled corporations, shall pay income taxes, customs duties and other taxes principal and interest on public debt, (3) national government guarantees of obligations
and fees as are imposed under revenue law: provided, that organizations otherwise which are drawn upon, are automatically appropriated: provided, that no obligations shall
exempted by law for the payment of such taxes/duties may ask for a subsidy from the be incurred or payments made from funds thus automatically appropriated except as issued
General Fund in the exact amount of taxes/duties due: Provided, further, that a procedure in the form of regular budgetary allotments.
shall be established by the Secretary of Finance and the Secretary of the Budget, whereby
such subsidies shall automatically be considered as both revenue and expenditure of the Section 27. Supplemental Appropriations. - All appropriation proposals shall be included
General Fund. and considered in the budget preparation process. After the President shall have submitted
the Budget, no supplemental appropriation measure supported from existing revenue
Section 21. Appropriation for Personal Services. - Appropriations for personal services measures shall be passed by the Congress. However, supplemental or deficiency
shall be considered as included in the amount specified for each budgetary program and appropriations involving the creation of new offices, programs or activities may be
project of each department, Bureau, office or agency, and shall not be itemized. The enacted if accompanied and supported by new revenue sources.
itemization of personal services shall be prepared by the Secretary for consideration and Section 28. Reversion of Unexpended Balances of Appropriations, Continuing
approval of the President as provided in Section 23 hereof: Provided, That itemization of Appropriations. - Unexpended balances of appropriations authorized in the General
personal services shall be prepared for all agencies of the Legislative, Executive and Appropriation Act shall revert to the unappropriated surplus of the General Fund at the end
Judicial Branches and the Constitutional bodies, except as may be otherwise approved by of the fiscal year and shall not thereafter be available for expenditure except by subsequent
the President for positions concerned with national security matters. legislative enactment: Provided, that appropriations for capital outlays shall remain valid
until fully spent or reverted: provided, further, that continuing appropriations for current
Section 22. Department Approval of Proposed Appropriations. - No legislative proposal operating expenditures may be specifically recommended and approved as such in support
which, if enacted, would authorized subsequent appropriations, shall be transmitted to the of projects whose effective implementation calls for multi-year expenditure commitments:
President by any bureau or agency without the prior approval of the Head of the provided, finally, that the President may authorize the use of savings realized by an agency
Department concerned or by the Chairman or Chief Executive Officer of a Cabinet level during given year to meet non-recurring expenditures in a subsequent year.
body which coordinates the multi-sectoral formulation and implementation of a particular
program of expenditure involving one or more departments. No legislative proposal The balances of continuing appropriations shall be reviewed as part of the annual budget
involving the appropriation of funds shall be transmitted to the Congress without the preparation process and the preparation process and the President may approve upon
approval of the President. recommendation of the Secretary, the reversion of funds no longer needed in connection
with the activities funded by said continuing appropriations.
CHAPTER 4 - BUDGET AUTHORIZATION
Section 29. Loan Proceeds. - Expenditures funded by foreign and domestic borrowings
Section 23. Content of the General Appropriations Act. - The General Appropriations Act shall be included within the expenditure program of the agency concerned. Loan proceeds,
shall be presented in the form of budgetary programs and projects for each agency of the whether in cash or in kind, shall not be used without the corresponding release of funds
government, with the corresponding appropriations for each program and project, through a Special Budget as herein provided.
including statutory provisions of specific agency or general applicability. The General
Appropriations Act shall not contain any itemization of personal services, which shall be Section 30. Contingent Liabilities. - Government agencies, particularly government-owned
prepared by the Secretary after enactment of the General Appropriations Act, for or controlled corporations, shall periodically report to the Secretary of Finance and the
consideration and approval of the President. Secretary of Budget on the status of obligations they have entered into and which are the
subject of government guarantees.
Section 24. Prohibition Against the Increase of Appropriation. - The Congress shall in no
case increase the appropriation of any project or program of any department, bureau, Section 31. Liability for Unauthorized Printing Press Revisions. - It shall be unlawful for
agency or office of the Government over the amount submitted by the President in his any person to make any unauthorized revision of any figure, text or provision in the
budget proposal. In case of any reduction in the proposed appropriation for a project or General Appropriations Act and in the other budget documents during or in the process of
program, a corresponding reduction shall be made in the total appropriation of the the printing. Any unauthorized change made either by addition, modification or deletion,
department, office or agency concerned and in the total of the General Appropriations Bill. shall be null and void.

Section 25. Prohibition Against Enactment of Additional Special Provisions. - The Persons who, in violation of this section, make any unauthorized revision in the budget
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documents, shall be criminally liable for falsification of legislative documents under the and other suitable classifications, the amounts appropriated; the estimated revenues, the
Revised Penal Code. When the offender is a government official or employee, he shall, in actual revenues or receipts, the amounts allotted and available for expenditures, the
addition to criminal prosecution, be dismissed from the service. unliquidated obligations, actual balances on hand, and the unencumbered balance of the
allotments for each department or agency of the Government.
CHAPTER 5 - BUDGET EXECUTION
Section 34. Program of Expenditure. - The Secretary of Budget shall recommend to the
Section 32. Use of Appropriated Funds. - All moneys appropriated for functions, activities, President the year's program of expenditure for each agency of the government on the
projects and programs shall be available solely for the specific purposes for which these basis of authorized appropriations. The approved expenditure program shall constitute the
are appropriated. basis for fund release during the fiscal period, subject to such policies, rules and
regulations as may be approved by the President.
Section 33. Allotment of Appropriations. - Authorized appropriations shall be allotted in
accordance with the procedure outlined hereunder: Section 35. Special Budgets for Lump-Sum Appropriations. - Expenditures from lump-sum
appropriations authorized for any purpose or for any department, office or agency in any
(1) Appropriations authorized for any Department or agency of the Government may be annual General Appropriations Act or other Act and from any fund of the National
made available for expenditure when the head of each Department or agency submits to Government, shall be made in accordance with a special budget to be approved by the
the Secretary a request for allotment of funds showing the estimated amounts needed for President, which shall include but shall not be limited to the number of each kind of
each function, activity or purpose for which the funds are to be expended during the position, the designations, and the annual salary proposed for which an appropriation is
applicable allotment period. The form and the time of submission of the request for intended. This provision shall be applicable to all revolving funds, receipts which are
allotment showing the proposed quarterly allotments of the whole authorized automatically made available for expenditure for certain specific purposes, aids and
appropriation for the department or agency, shall be prescribed by the Secretary. donations for carrying out certain activities, or deposits made to cover to cost of special
services to be rendered to private parties. Unless otherwise expressly provided by law,
(2) In the administration of the allotment system herein provided, each calendar year shall when any Board, head of department, chief of bureau or office, or any other official, is
be divided into four quarterly allotment periods beginning, respectively, on the first day of authorized to appropriate, allot, distribute or spend any lump-sum appropriation or special,
January, April, July and October. In any case where the quarterly allotment period is found bond, trust, and other funds, such authority shall be subject to the provisions of this
to be impractical or otherwise undesirable, the Secretary may prescribe a different period section.
suited to the circumstances.
In case of any lump-sum appropriation for salaries and wages of temporary and emergency
(3) Request for allotment shall be approved by the Secretary who shall ensure that laborers and employees, including contractual personnel, provided in any General
expenditures are covered by appropriations both as to amount and purpose and who shall Appropriation Act or other Acts, the expenditure of such appropriation shall be limited to
consider the probable needs of the department or agency for the remainder of the fiscal the employment of persons paid by the month, by the day, or by the hour.
year or period for which the appropriation was made.
Section 36. Cash Budgets. - An operational cash budget shall be implemented to ensure
(4) At the end of every quarter, each department or agency shall report to the Secretary the the availability of cash resources for priority development projects and to establish a sound
current status of its appropriations, the cumulative allotments, obligations incurred or basis for determining the level, type and timing of public borrowings. The procedure,
liquidated, total disbursements, unliquidated obligations and unexpended balances and the formal, accounts, and other details necessary for the execution, monitoring and control
results of expended appropriations. aspects of the system shall be determined jointly by the Secretary of Finance, the Secretary
of the Budget and the Chairman of the Commission on Audit.
(5) Releases of funds appropriated for a given agency may be made to its regional offices
if dictated by the need and urgency of regional activities. Section 37. Creation of Appropriation Reserves. - The Secretary may establish reserves
against appropriations to provide for contingencies and emergencies which may arise later
(6) The Secretary shall have authority to modify or amend any allotment previously in the calendar year and which would otherwise require deficiency appropriations.
issued. In case he shall find at any time that the probable receipts from taxes or other The establishment of appropriation reserves shall not necessarily mean that such portion of
sources of any fund will be less than anticipated and that as a consequence the amount the appropriation will not be made available for expenditure. Should conditions change
available for the remainder of the term of the appropriations or for any allotment period during the fiscal year justifying the use of the reserve, necessary adjudgments may be
will be less than the amount estimated or allotted therefor, he shall, with the approval of made by the Secretary when requested by the department, official or agency concerned.
the President and after notice to the department or agency concerned, reduce the amount or
amounts allotted so as to conform to the targeted budgetary goals. Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided
in the General Appropriations Act and whenever in his judgment the public interest so
(7) The Secretary shall maintain a control record showing quarterly by funds, accounts, requires, the President, upon notice to the head of office concerned, is authorized to
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suspend or otherwise stop further expenditure of funds allotted for any agency, or any
other expenditure authorized in the General Appropriations Act, except for personal The funding requirement of agencies reorganized in accordance with approved
services appropriations used for permanent officials and employees. reorganization plans or reorganized pursuant to law enacted after the approval of the
General Appropriations Act, are deemed appropriated and shall be available for
Section 39. Authority to Use Savings in Appropriations to Cover Deficits. - Except as expenditure as soon as the reorganization plans are approved. The Secretary of Budget is
otherwise provided in the General Appropriations Act, any savings in the regular hereby authorized to make necessary adjustments in the appropriations to carry out the
appropriations authorized in the General Appropriations Act for programs and projects of provisions of this section. The department head concerned, with the approval of the
any department, office or agency, may, with the approval of the President, be used to cover Secretary of Budget, is hereby authorized to make necessary salary adjustments resulting
a deficit in any other item of the regular appropriations: provided, that the creation of new from final selection of personnel to fill the positions in the staffing patterns of reorganized
positions or increase of salaries shall not be allowed to be funded from budgetary savings agencies, to make necessary salary adjustments resulting from new appointments,
except when specifically authorized by law: provided, further, that whenever authorized promotions or salary increases, subject to the provisions of Presidential Decree No. 985.
positions are transferred from one program or project to another within the same
department, office or agency, the corresponding amounts appropriated for personal Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized
services are also deemed transferred, without, however increasing the total outlay for or incurred in violation of the provisions of this Code or of the general and special
personal services of the department, office or agency concerned. provisions contained in the annual General or other Appropriations Act shall be void.
Every payment made in violation of said provisions shall be illegal and every official or
Section 40. Certification of Availability of Funds. - No funds shall be disbursed, and no employee authorizing or making such payment, or taking part therein, and every person
expenditures or obligations chargeable against any authorized allotment shall be incurred receiving such payment shall be jointly and severally liable to the Government for the full
or authorized in any department, office or agency without first securing the certification of amount so paid or received.
its Chief Accountant or head of accounting unit as to the availability of funds and the
allotment to which the expenditure or obligation may be properly charged. Any official or employee of the Government knowingly incurring any obligation, or
authorizing any expenditure in violation of the provisions herein, or taking part therein,
No obligation shall be certified to accounts payable unless the obligation is founded on a shall be dismissed from the service, after due notice and hearing by the duly authorized
valid claim that is properly supported by sufficient evidence and unless there is proper appointing official. If the appointing official is other than the President and should he fail
authority for its incurrence. Any certification for a non-existent or fictitious obligation to remove such official or employee, the President may exercise the power of removal.
and/or creditor shall be considered void. The certifying official shall be dismissed from the
service, without prejudice to criminal prosecution under the provisions of the Revised Section 44. Accrual of Income to Unappropriated Surplus of the General Fund. - Unless
Penal Code. Any payment made under such certification shall be illegal and every official otherwise specifically provided by law, all income accruing to the departments, offices and
authorizing or making such payment, or taking part therein or receiving such payment, agencies by virtue of the provisions of existing laws, orders and regulations shall be
shall be jointly and severally liable to the government for the full amount so paid or deposited in the National Treasury or in the duly authorized depository of the Government
received. and shall accrue to the unappropriated surplus of the General Fund of the Government:
Provided, That amounts received in trust and from business-type activities of government
Section 41. Prohibition Against the Incurrence of Overdraft. - Heads of departments, may be separately recorded and disbursed in accordance with such rules and regulations as
bureaus, offices and agencies shall not incur nor authorize the incurrence of expenditures may be determined by the Permanent Committee created under this Act.
or obligations in excess of allotments released by the Secretary for their respective
departments, offices and agencies. Parties responsible for the incurrence of overdrafts shall Section 45. Special, Fiduciary and Trust Funds. - Receipts shall be recorded as income of
be held personally liable therefor. Special, Fiduciary or Trust Funds or Funds other than the General Fund, only when
authorized by law and following such rules and regulations as may be issued by a
Section 42. Adjustment of Appropriations for Reorganization. - When under authority of Permanent Committee consisting of the Secretary of Finance as Chairman, and the
law, a function or an activity is transferred or assigned from one agency to another, the Secretary of the Budget and the Chairman, Commission on Audit, as members. The same
balances of appropriations which are determined by the head of such department to be Committee shall likewise monitor and evaluate the activities and balances of all Funds of
available and necessary to finance or discharge the function or activity so transferred or the national government other than the General fund and may recommend for the
assigned may, with the approval of the President, be transferred to and be made available consideration and approval of the President, the reversion to the General fund of such
for use by the agency to which said function or activity is transferred or assigned for the amounts as are (1) no longer necessary for the attainment of the purposes for which said
purpose for which said funds were originally available. Balances so transferred shall be Funds were established, (2) needed by the General fund in times of emergency, or (3)
credited to any applicable existing appropriation account or to new appropriation accounts violative of the rules and regulations adopted by the Committee: provided, that the
which are hereby authorized to be established, and shall be merged with any fund already conditions originally agreed upon at the time the funds were received shall be observed in
in the applicable existing or newly established appropriation account or accounts and case of gifts or donations or other payments made by private parties for specific purposes.
thereafter accounted for as one fund.
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Section 46. Service Fees and Honoraria. - Agencies are authorized to charge fees, international organizations, including administrative and other incidental expenses;
including honoraria and other reasonable allowances, as compensation for consultation,
seminars or training programs, or technical services rendered to other government (8) Covering any deficiency in peso counterpart fund commitments for foreign assisted
agencies or private parties. Such fees or honoraria shall be recorded as income of the projects, as may be approved by the President;
government and subject to the usual accounting, auditing and other pertinent requirements.
(9) Priority activities that will promote the economic well being of the nation, including
Section 47. Administration of Lump Sum Funds. - The Department of Budget shall food production, agrarian reform, energy development, disaster relief, and rehabilitation.
administer the Lump-Sum Funds appropriated in the General Appropriations Act, except
as otherwise specified therein, including the issuance of Treasury Warrants covering (10) Repair, improvement and renovation of government buildings and infrastructure and
payments to implementing agencies or other creditors, as may be authorized by the other capital assets damaged by natural calamities;
President.
(11) Expenses in connection with official participation in trade fairs, civic parades,
Section 48. Cost Reduction. - Each head of a department bureau, office or agency shall celebrations, athletic competitions and cultural activities, and payment of expenses for the
implement a cost reduction program for his department bureau, office or agency for the celebration of regular or special official holidays;
purpose of reducing cost of operations and shall submit to the President reports on the
results of the implementation thereof. The Department of Budget shall provide technical (12) Payment of obligations of the government or any of its departments or agencies as a
and other necessary assistance in the design and implementation of cost reduction result of final judgment of the Courts; and
activities. An incentive award not exceeding one month's salary may be granted to any
official or employee whose suggestion for cost reduction has been adopted and shall have (13) Payment of valid prior year's obligations of government agencies with any other
actually resulted in cost reduction, payable from the saving resulting therefrom. government office or agency, including government-owned or controlled corporations.

Section 49. Authority to Use Savings for Certain Purposes. - Savings in the appropriations Section 50. Appointment of Budget Officers. - No person shall be appointed as budget
provided in the General Appropriations Act may be used for the settlement of the officer in any department, bureau, office or agency unless he meets the qualification and
following obligations incurred during a current fiscal year or previous fiscal years as may training requirements established by the Budget Commission as prerequisite to
be approved by Secretary in accordance with rules and procedures as may be approved by appointment, in addition to other qualification requirements prescribed by the Civil
the President: Service Commission for the position.

(1) Claims of officials, employees and laborers who died or were injured in line of duty, CHAPTER 6 - Budget Accountability
including burial expenses as authorized under existing law;
Section 51. Evaluation of Agency Performance. - The President, through the Secretary
(2) Commutation of terminal leaves of employees due to retirement, resignation or shall evaluate on a continuing basis the quantitative and qualitative measures of agency
separation from the service through no fault of their own in accordance with the provisions performance as reflected in the units of work measurement and other indicators of agency
of existing law, including unpaid claims for commutation of maternity leave of absence; performance, including the standard and actual costs per unit of work.

(3) Payment of retirement gratuities or separation pay of employees separated from the Section 52. Budget Monitoring and Information System. - The Secretary of Budget shall
service due to government reorganization; determine accounting and other items of information, financial or otherwise, needed to
monitor budget performance and to assess effectiveness of agencies operations and shall
(4) Payment of salaries of employees who have been suspended or dismissed as a result of prescribe the forms, schedule of submission, and other components of reporting systems,
administrative or disciplinary action, or separated from the service through no fault of including the maintenance of subsidiary and other recording which will enable agencies to
their own and who have been subsequently exonerated and reinstated by virtue of accomplish and submit said information requirements: provided, that the Commission on
decisions of competent authority; Audit shall, in coordination with the Secretary of Budget, issue rules and regulations that
may be applicable when the reporting requirements affect accounting functions of
(5) Cash awards to deserving officials and employees in accordance with civil service law; agencies: provided, further, that the applicable rules and regulations shall be issued by the
Commission on Audit within a period of thirty (30) days after the Department of Budget
(6) Salary adjustments of officials and employees as a result of classification action under, and Management prescribes the reporting requirements.
and implementation of, the provisions of the Compensation and Position Classification
Act, including positions embraced under the Career Executive Service; Section 53. Monitoring of Expenditures. - Expenditures of national government agencies
shall be recorded so as to identify expenditures as classified into such categories as may be
(7) Peso support to any undertaking that may be entered into by the government with determined by the Department of Budget and Management, including but not limited to
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the following: (1) agency incurring the obligation, (2) program, project and activity, (3) of time, and shall have a definite expected output: provided, further, that implementing,
object of expenditure, including personal services, operating and maintenance monitoring and other regular and recurring agency activities shall not be contracted for,
expenditures, equipment, and capital outlays, (4) region or locality of use, (5) economic or except for personnel hired on an individual and contractual basis and working as part of
functional classification of the expenditure, (6) obligational authority and cash transactions the organization, or as otherwise may be approved by the President: Provided, finally, that
arising from fund releases, and such other classifications as may be necessary for the the cost of contracted services shall not exceed the amount that would otherwise be
budget process. The Secretary of Budget shall determine the data and information incurred had the work been performed by regular employees of government, except as
requirements thus needed and the Commission on Audit shall formulate the accounting may be authorized under this section.
rules and regulations, including changes in the Chart of Accounts and the general or
subsidiary accounting records, as may be necessary to generate the desired data and Section 59. Authority to Receive Additional Compensation. - Officials and employees who
information. The Chief Accountants of agencies and where necessary, accountants of are duly appointed by competent authority to any position in another government office or
regional offices, shall submit the data needed by the Department of Budget and agency in a concurrent capacity, may, in the discretion of the President, be allowed to
Management in accordance with such rules and regulations as it may formulate. receive additional compensation in the form of allowance or honorarium at such rates he
shall fix and subject to such conditions as he may prescribe. Such additional compensation
Section 54. Standard Costs. - The Department of Budget and Management shall develop shall be paid from the appropriations of the office or agency benefitting from the
standard costs for duly approved units of work measurement for each agency's budgetary concurrent service.
projects or activities. These standard costs shall be compared with actual unit costs and
utilized in the evaluation of agency budgetary performance. Section 60. Restrictions on Salary Increases. - No portion of the appropriations provided
in the General Appropriations Act shall be used for payment of any salary increase or
Section 55. Review of Budgetary Programs. - The Secretary of Budget shall conduct a adjustment unless specifically authorized by law or appropriate budget circular nor shall
continuing review of the budgetary program and project structure of each department, any appropriation for salaries authorized in the General Appropriations Act, save as
office or agency, the result of which shall be the basis for modifying or amending such otherwise provided for under the Compensation and Position Classification Act, be paid
structure for incorporation in the President's budget proposals to the Congress. unless the positions have been classified by the Budget Commission.

Section 56. Semi-Annual Report on Accomplishments of Government Agencies. - The Section 61. Merit Increases. - The budgets of national government agencies may provide
heads of departments, bureaus, offices or agencies of the government shall submit a semi- for a lump-sum for merit increases, subject to such terms and conditions as may be
annual report of their accomplishments, both work and financial results, in accordance approved by the President. Such lump-sum shall be used to fund salary increases approved
with such content and format as may be prescribed by the Secretary. These reports shall be by the head of agency in recognition of meritorious performance: Provided, That the Civil
designed and use for the purpose of monitoring the efficiency and effectiveness with Service Commission and the Department of Budget shall jointly issue the rules and
which budgeted funds are being utilized, and generally for verifying the attainment of regulations governing the granting of such merit increases.
goals established in the budget process.
Section 62. Salary for Substitutionary Service. - When an official or employee is issued a
Section 57. Failure to Submit Reports. - Failure on the part of agency heads, chief duly approved appointment in a temporary or acting capacity to take the place and perform
accountants, budget officers, cashiers, disbursing officers, administrative and personnel the duties of another who is temporarily absent from his post with pay, savings in the
officers, and responsible officers of departments, bureaus, offices and agencies to submit appropriations of the department, bureau or office may be used for the payment of his
trial balances, work and financial plans, special Budgets, reports of operation and income, salary or differential, subject to the approval of the Secretary.
plans, special budgets, reports of operation and income, current agency plantilla of
personnel and such other reports as may be necessary and required by the Department of Section 63. Additional Compensation for Overtime Service. - Officials and employees of
Budget shall automatically cause the suspension of payment of their salaries until they the National Government, when required to work overtime after regular working hours
have complied with the requirements of the Department of Budget. No appropriation during ordinary days, during half-day sessions, or on Saturdays, Sundays and holidays, by
authorized in the General Appropriations Act shall be made available to pay the salary of the heads of departments concerned, to finish work that must be completed within a
any official or employee who violates the provisions of this section, in addition to any specified time, may be paid overtime compensation from any unexpected balance of the
disciplinary action that may be instituted against such erring official or employee. appropriation for salaries and wages authorized in the General Appropriations Act and
under such guidelines as may be issued by the President.
CHAPTER 7 - Expenditure of Appropriate Funds
Section 64. Compensation of Persons Receiving Pension. - A person receiving life
Section 58. Contracting of Activities. - Agencies may enter into contracts with individuals pension, annuity, or gratuity as a result of service in the national government or any local
or organizations, both public and private, subject to provisions of law and applicable government unit, or from any government-owned or controlled corporation, who is
guidelines approved by the President: provided, that contracts shall be for specific services reappointed to any position, the appropriation for the salary of which is provided from
which cannot be provided by the regular staff of the agency, shall be for a specific period funds of the office, shall have the option to receive either the compensation for the
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position, or the pension, gratuity or annuity, but in no case shall he receive both. In hospitals and leper institutions where there are no mess halls or whenever these are
inadequate, personnel entitled to subsistence allowance in kind may commute such
Section 65. Prohibition of Voluntary Service. - Unless otherwise specifically approved by subsistence upon request of the personnel concerned subject to the approval of the
the President, no person shall be employed or appointed in the government under the guise department head at authorized rates chargeable against the appropriations for supplies and
of voluntary service, with compensation below the authorized hiring rate for the position, materials authorized in the General Appropriations Act.
but with privilege of transportation and/or representation expenses in any form, or of
receiving per diems, allowances, honoraria, subsistence, quarters in cash or in kind, Section 70. Subsistence of Crew of Government Vessels. - The subsistence allowance for
payable from government funds: provided, that the application of this provisions may be the officers and crew of the coast guard and revenue cutters and lighthouse tenders and
waived to authorize voluntary service in the Armed Forces of the Philippines or in other large vessels operated by the Government shall be spent for conducting a mess under
connection with relief operations. the charge and administration of one or more members of the complement in each vessel
to be designated by the corresponding head of department, and in accordance with
Section 66. Additional Compensation for School Faculty Members. - Professors, regulations to be issued by him. The person or persons so designated shall keep an account
instructors, teachers, or members of the faculty of government schools, colleges and of the advances of funds received and expenditures made therefrom for the operation of
universities, when required to teach more than their regular teaching loads may be paid the mess and shall render such report to the corresponding Accounting Officer promptly at
additional compensation not exceeding seventy-five percentum of their basic salary. the end of each month.

Section 67. Laundry. - At the discretion of the department head concerned, any official or Section 71. Furnished Quarters. - When the position of any official or employee is
employee of the national government serving in any hospital, penal institution, or other provided with "furnished quarters", such official or employee shall be entitled to the use of
similar institution, who is required to wear a uniform during the performance of his duties, such government-owned furniture and equipment as are necessary for his board and
may be granted laundry allowance in kind, or which may be commuted at such rates as lodging and those for his family including children below twenty-one years of age.
may be authorized by the Department of Budget.
Section 72. Per Diems of Government Officials and Employees. - When a government
Section 68. Hazard Pay. - Upon recommendation of the department head concerned and official or employee is authorized to travel on official business outside of his permanent
approval of the Secretary, hazard pay may be allowed to employees who are actually station, he shall be entitled to per diems to cover his board and lodging in accordance with
assigned to danger or strife-torn areas, disease-infested places, or in distressed or isolated his schedule: provided, that in addition to per diems, the official or employee may be
stations and camps, which expose them to great danger of contagion or peril to life. Such entitled to transportation expenses in going to and coming from his destination and to a
hazard pay shall be paid from savings of the department concerned at such rates, terms and daily allowance while in the field: provided, further, that officials and employees on travel
conditions as the Secretary may prescribe. status whose expenses for board and lodging are paid directly or indirectly by government
Section 69. Subsistence. - No official or employee of the national government shall be may not be entitled to receive the per diems and allowances corresponding to such
given subsistence, the cost of which is payable from any fund, except the following and payments.
only when an appropriation therefor is specifically provided:
Department secretaries, heads of Constitutional bodies, undersecretaries and all other
(1) Marine officers, engineers and crew of government vessels, launches, and motorboats, positions of equivalent rank are authorized the reimbursement of actual expenses
who shall take their meals on the mess when aboard the said vessels, launches, or supported by receipts, within such limits as may be imposed under the provisions of this
motorboats; section.

(2) Lightkeepers and other employees in light stations duly authorized by the head of the Officials and employees authorized to travel abroad may be granted clothing allowance:
department to receive subsistence, who shall be furnished raw canned, or preserved food provided, that no official or employee shall be granted such clothing allowance oftener
supplies; than once every twenty-four (24) months.

(3) Officials and employees who are required to render service within the premises of The rates of per diems and other allowances as authorized in this section shall be
hospitals, penal institutions, leper institutions, military installations, and other similar determined by the President. The rates may be changed from time to time upon
institutions, for a continuous period that includes meal time, may be allowed full recommendation of a Travel Rates Committee which is hereby created, consisting of the
subsistence when required to live in said premises to make their services available at any Secretary of Budget as Chairman and the Secretary of Foreign Affairs, the Secretary of
and all times; Tourism and the Chairman, Commission on Audit, or their representatives, as members.

(4) Laborers temporarily fielded to isolated or unsettled districts shall be furnished the The Committee shall review travel rates and shall recommend to the President for
usual rations or the equivalent in cash, at the expense of the government. consideration and approval modification in rates and policy when found to be warranted
by actual domestic or foreign travel costs, as the case may be.
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this section shall subject the erring official or employee to administrative disciplinary
Government-owned or controlled corporations shall observe the rates established under action and he shall be personally liable for any loss or damage caused to the government
this section: provided, that profit making corporations may adopt their own scales as may or third persons.
be provided by law. The Travel Rates Committee shall issue the necessary rules and
regulations to enforce the provisions of this section. The Commission on Audit shall issue rules and regulations governing the use, operation
and maintenance of government motor transport equipment.
Section 73. Additional Conditions for Payment of Travel Expenses. - When travel is done
by water and subsistence is not included in the transportation cost, the amount actually and Section 76. Limitation of Rental of Motor Vehicles. - No appropriations authorized in the
necessarily spent for subsistence during such travel time shall be paid, and no per diems General Appropriations Act shall be used for renting motor transport equipment for a
shall be allowed in lieu thereof. continuous period of more than fifteen days, except as may be authorized by the Secretary.
Per diems and travel allowances shall not be granted to members of field parties or others
for whom subsistence and allowances in kind are supplied or other special provision made Section 77. Limitation of Purchase of Supplies, Materials, and Equipment Spare Parts. -
to cover travel expenses. Except as otherwise provided in the General Appropriations Act, the stock on hand of
supplies, materials and equipment spare parts, acquired through ordinary and emergency
The travel expenses of a government official or employee who is assigned to render a purchase, shall at no time exceed normal three-month requirements, subject to the
special service to any private person or entity, the expenses for which are payable by the pertinent rules and regulations issued by competent authority: Provided, That department
latter, shall be paid from a deposit which the private party shall be required to make before heads may approve the build-up of stocks on hand of critical supplies and materials, in
the performance of the special service is commenced, subject to the limitations and anticipation of cost increases or requirements of a national emergency, and specifying
requirements herein provided for travel expenses payable from government funds. maximum quantities of individual items, but in no case shall these stocks exceed more
than one year's supply, unless otherwise approved by the President.
No official or employee of the Government who remains temporarily at one station for a
period longer than one (1) month shall be paid per diems in excess of one (1) month, Section 78. Purchase of Locally Manufactured Products. - All appropriations for the
except upon the approval of the head of department, and, in case his temporary stay in any purchase of equipment, supplies and materials authorized in the General Appropriations
one place exceeds three (3) months, payment of per diems in excess of three (3) months Act shall be available only for locally manufactured equipment; parts, accessories,
shall be made only upon the previous approval of the Secretary. medicines and drugs, supplies and materials, except when none is available in the market
or when the price of the locally manufactured article exceed those determined by the Flag
Section 74. Transportation of Members of Family of an Employee Transferred from One Law.
Station to Another. - Whenever, due to the exigencies of the service and not at his own
request, an official or employee is transferred from one station to another, said official or Section 79. Availability of Appropriations for Rental of Building and Grounds. - Any
employee and his spouse and children below twenty-one years of age shall be entitled to appropriation authorized in any Act for rental of buildings and grounds for any
transportation and freight for reasonable and necessary baggage and household effects, at department, bureau, office or agency shall be available for expenditure only when
the expense of the Government, to be paid from the appropriation for traveling expenses of authorized by the department head concerned. Such appropriation may also be used for
the bureau or office concerned. lease-purchase arrangements.

Section 75. Purchase, Use, Operation and Maintenance of Motor Transport Equipment. - With the concurrence of the Secretary of Budget and Management and the Secretary of
No appropriation for equipment authorized in the General Appropriations Act shall be Finance, the head of the department may contract with any government financial
used directly or indirectly for the purchase of automobiles, jeeps, jitneys, station wagons, institution for loans intended for the acquisition of land for the construction of an office
motorcycles, trucks, launches, speedboats, airplanes, helicopters and other types of motor building for any of the agencies under the department. Annual amortization of the loans
transport equipment unless otherwise specifically authorized by the President. shall be taken from the appropriation for rental authorized under any Act for the
department, bureau or office concerned.
All departments, bureaus, offices and agencies authorized to purchase motor transport
equipment including those acquired through donations, gifts or gratuitous title are likewise Section 80. Misuse of Government Funds and Property. - Any public official or employee
authorized to use, operate and maintain them for purposes of carrying out the official who shall apply any government fund or property under his administration or control to
functions and activities of the agency. These motor vehicles shall be used strictly for any use other than for which such fund or property is appropriated by laws, shall suffer the
official business, bear government plates only, and after office hours kept in garage penalty imposed under the appropriate penal laws.
provided therefor by the office or agency to which they belong, except, when in use for
official business outside office hours. The President, however, may authorize exceptions BOOK VII - ADMINISTRATIVE PROCEDURE
from these provisions for officials of government who work under extended hours or
whose activities call for special security arrangements. Any violation of the provisions of CHAPTER 1 - General Provisions
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of permission, or regulation of the exercise of a right or privilege.

Section 1. Scope. - This Book shall be applicable to all agencies as defined in the next
succeeding section, except the Congress, the Judiciary, the Constitutional Commissions, (11) "Licensing" includes agency process involving the grant, renewal, denial, revocation,
military establishments in all matters relating exclusively to Armed Forces personnel, the suspension, annulment, withdrawal, limitation, amendment, modification or conditioning
Board of Pardons and Parole, and state universities and colleges. of a license.

Section 2. Definitions. - As used in this Book: (12) "Sanction" includes the whole or part of a prohibition, limitation or other condition
affecting the liberty of any person; the withholding of relief; the imposition of penalty or
(1) "Agency" includes any department, bureau, office, commission, authority or officer of fine; the destruction, taking, seizure or withholding of property; the assessment of
the National Government authorized by law or executive order to make rules, issue damages, reimbursement, restitution, compensation, cost, charges or fees; the revocation
licenses, grant rights or privileges, and adjudicate cases; research institutions with respect or suspension of license; or the taking of other compulsory or restrictive action.
to licensing functions; government corporations with respect to functions regulating
private right, privileges, occupation or business; and officials in the exercise of (13) "Relief" includes the whole or part of any grant of money, assistance, license,
disciplinary power as provided by law. authority, privilege, exemption, exception, or remedy; recognition of any claim, right,
immunity, privilege, exemption or exception; or taking of any action upon the application
(2) "Rule" means any agency statement of general applicability that implements or or petition of any person.
interprets a law, fixes and describes the procedures in, or practice requirements of, an
agency, including its regulations. The term includes memoranda or statements concerning (14) "Agency proceeding" means any agency process with respect to rule-making,
the internal administration or management of an agency not affecting the rights of, or adjudication and licensing.
procedure available to, the public.
1. "Agency action" includes the whole or part of every agency rule, order, license,
(3) "Rate" means any charge to the public for a service open to all and upon the same sanction, relief or its equivalent or denial thereof.
terms, including individual or joint rates, tolls, classifications, or schedules thereof, as well
as commutation, mileage, kilometerage and other special rates which shall be imposed by CHAPTER 2 - Rules and Regulations
law or regulation to be observed and followed by any person.
Section 3. Filing. - (1) Every agency shall file with the University of the Philippines Law
(4) "Rule making" means an agency process for the formulation, amendment, or repeal of Center three (3) certified copies of every rule adopted by it. Rules in force on the date of
a rule. effectivity of this Code which are not filed within three (3) months from that date shall not
thereafter be the basis of any sanction against any party or persons.
(5) "Contested case" means any proceeding, including licensing, in which the legal rights,
duties or privileges asserted by specific parties as required by the Constitution or by law (2) The records officer of the agency, or his equivalent functionary, shall carry out the
are to be determined after hearing. requirements of this section under pain of disciplinary action.

(6) "Person" includes an individual, partnership, corporation, association, public or private (3) A permanent register of all rules shall be kept by the issuing agency and shall be open
organization of any character other than an agency. to public inspection.

(7) "Party" includes a person or agency named or admitted as a party, or properly seeking Section 4. Effectivity. - In addition to other rule-making requirements provided by law not
and entitled as of right to be admitted as a party, in any agency proceeding; but nothing inconsistent with this Book, each rule shall become effective fifteen (15) days from the
herein shall be construed to prevent an agency from admitting any person or agency as a date of filing as above provided unless a different date is fixed by law, or specified in the
party for limited purposes. rule in cases of imminent danger to public health, safety and welfare, the existence of
which must be expressed in a statement accompanying the rule. The agency shall take
(8) "Decision" means the whole or any part of the final disposition, not of an interlocutory appropriate measures to make emergency rules known to persons who may be affected by
character, whether affirmative, negative, or injunctive in form, of an agency in any matter, them.
including licensing, rate fixing and granting of rights and privileges.
Section 5. Publication and Recording. - The University of the Philippines Law Center
(9) "Adjudication" means an agency process for the formulation of a final order. shall:

(10) "License" includes the whole or any part of any agency permit, certificate, passport, (1) Publish a quarter bulletin setting forth the text of rules filed with it during the
clearance, approval, registration, charter, membership, statutory exemption or other form preceding quarter; and
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(2) Keep an up-to-date codification of all rules thus published and remaining in effect, (3) The agency shall keep an official record of its proceedings.
together with a complete index and appropriate tables.
Section 12. Rules of Evidence. - In a contested case:
Section 6. Omission of Some Rules. - (1) The University of the Philippines Law Center
may omit from the bulletin or the codification any rule if its publication would be unduly (1) The agency may admit and give probative value to evidence commonly accepted by
cumbersome, expensive or otherwise inexpedient, but copies of that rule shall be made reasonably prudent men in the conduct of their affairs.
available on application to the agency which adopted it, and the bulletin shall contain a
notice stating the general subject matter of the omitted rule and new copies thereof may be (2) Documentary evidence may be received in the form of copies or excerpts, if the
obtained. original is not readily available. Upon request, the parties shall be given opportunity to
compare the copy with the original. If the original is in the official custody of a public
(2) Every rule establishing an offense or defining an act which, pursuant to law, is officer, a certified copy thereof may be accepted.
punishable as a crime or subject to a penalty shall in all cases be published in full text.
(3) Every party shall have the right to cross-examine witnesses presented against him and
Section 7. Distribution of Bulletin and Codified Rules. - The University of the Philippines to submit rebuttal evidence.
Law Center shall furnish one (1) free copy each of every issue of the bulletin and of the
codified rules or supplements to the Office of the President, Congress, all appellate courts (4) The agency may take notice of judicially cognizable facts and of generally cognizable
and the National Library. technical or scientific facts within its specialized knowledge. The parties shall be notified
and afforded an opportunity to contest the facts so noticed.
The bulletin and the codified rules shall be made available free of charge to such public
officers or agencies as the Congress may select, and to other persons at a price sufficient to Section 13. Subpoena. - In any contested case, the agency shall have the power to require
cover publication and mailing or distribution costs. the attendance of witnesses or the production of books, papers, documents and other
pertinent data, upon request of any party before or during the hearing upon showing of
Section 8. Judicial Notice. - The court shall take judicial notice of the certified copy of general relevance. Unless otherwise provided by law, the agency may, in case of
each rule duly filed or as published in the bulletin or the codified rules. disobedience, invoke the aid of the Regional Trial Court within whose jurisdiction the
contested case being heard falls. The Court may punish contumacy or refusal as contempt.
Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as
far as practicable, publish or circulate notices of proposed rules and afford interested Section 14. Decision. - Every decision rendered by the agency in a contested case shall be
parties the opportunity to submit their views prior to the adoption of any rule. in writing and shall state clearly and distinctly the facts and the law on which it is based.
The agency shall decide each case within thirty (30) days following its submission. The
(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall parties shall be notified of the decision personally or by registered mail addressed to their
have been published in a newspaper of general circulation at least two (2) weeks before counsel of record, if any, or to them.
the first hearing thereon.
Section 15. Finality of Order. - The decision of the agency shall become final and
(3) In case of opposition, the rules on contested cases shall be observed. executory fifteen

CHAPTER 3 - Adjudication (15) days after the receipt of a copy thereof by the party adversely affected unless within
that period an administrative appeal or judicial review, if proper, has been perfected. One
Section 10. Compromise and Arbitration. - To expedite administrative proceedings motion for reconsideration may be filed, which shall suspend the running of the said
involving conflicting rights or claims and obviate expensive litigations, every agency period.
shall, in the public interest, encourage amicable settlement, comprise and arbitration. Section 16. Publication and Compilation of Decisions. -

Section 11. Notice and Hearing in Contested Cases. - (1) In any contested case all parties (1) Every agency shall publish and make available for public inspection all decisions or
shall be entitled to notice and hearing. The notice shall be served at least five (5) days final orders in the adjudication of contested cases.
before the date of the hearing and shall state the date, time and place of the hearing.
(2) It shall be the duty of the records officer of the agency or his equivalent functionary to
(2) The parties shall be given opportunity to present evidence and argument on all issues. prepare a register or compilation of those decisions or final orders for use by the public.
If not precluded by law, informal disposition may be made of any contested case by
stipulation, agreed settlement or default. Section 17. Licensing Procedure. - (1) When the grant, renewal, denial or cancellation of a
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license is required to be preceded by notice and hearing, the provisions concerning Section 25. Judicial Review. - (1) Agency decisions shall be subject to judicial review in
contested cases shall apply insofar as practicable. (2) Except in cases of willful violation accordance with this chapter and applicable laws.
of pertinent laws, rules and regulations or when public security, health, or safety require
otherwise, no license may be withdrawn, suspended, revoked or annulled without notice (2) Any party aggrieved or adversely affected by an agency decision may seek judicial
and hearing. review.

Section 18. Non-expiration of License. - Where the licensee has made timely and sufficient (3) The action for judicial review may be brought against the agency, or its officers, and all
application for the renewal of a license with reference to any activity of a continuing indispensable and necessary parties as defined in the Rules of Court.
nature, the existing license shall not expire until the application shall have been finally
determined by the agency. (4) Appeal from an agency decision shall be perfected by filing with the agency within
fifteen (15) days from receipt of a copy thereof a notice of appeal, and with the reviewing
CHAPTER 4 - ADMINISTRATIVE APPEAL IN CONTESTED CASES court a petition for review of the order. Copies of the petition shall be served upon the
agency and all parties of record. The petition shall contain a concise statement of the
Section 19. Appeal. - Unless otherwise provided by law or executive order, an appeal from issues involved and the grounds relied upon for the review, and shall be accompanied with
a final decision of the agency may be taken to the Department head. a true copy of the order appealed from, together with copies of such material portions of
the records as are referred to therein and other supporting papers. The petition shall be
Section 20. Perfection of Administrative Appeals. - (1) Administrative appeals under this under oath and shall how, by stating the specific material dates, that it was filed within the
Chapter shall be perfected within fifteen (15) days after receipt of a copy of the decision period fixed in this chapter.
complained of by the party adversely affected, by filing with the agency which adjudicated
the case a notice of appeal, serving copies thereof upon the prevailing party and the (5) The petition for review shall be perfected within fifteen (15) days from receipt of the
appellate agency, and paying the required fees. final administrative decision. One (1) motion for reconsideration may be allowed. If the
motion is denied, the movant shall perfect his appeal during the remaining period for
(2) If a motion for reconsideration is denied, the movant shall have the right to perfect his appeal reckoned from receipt of the resolution of denial. If the decision is reversed on
appeal during the remainder of the period for appeal, reckoned from receipt of the reconsideration, the appellant shall have fifteen (15) days from receipt of the resolution to
resolution of denial. If the decision is reversed on reconsideration, the aggrieved party perfect his appeal.
shall have fifteen (15) days from receipt of the resolution of reversal within which to
perfect his appeal. (6) The review proceeding shall be filed in the court specified by statute or, in the absence
thereof, in any court of competent jurisdiction in accordance with the provisions on venue
(3) The agency shall, upon perfection of the appeal, transmit the records of the case to the of the Rules of Court.
appellate agency.
(7) Review shall be made on the basis of the record taken as a whole. The findings of fact
Section 21. Effect of Appeal. - The appeal shall stay the decision appealed from unless of the agency when supported by substantial evidence shall be final except when
otherwise provided by law, or the appellate agency directs execution pending appeal, as it specifically provided otherwise by law.
may deem just, considering the nature and circumstances of the case.
Section 26. Transmittal of Record. - Within fifteen (15) days from the service of the
Section 22. Action on Appeal. - The appellate agency shall review the records of the petition for review, the agency shall transmit to the court the original or a certified copy of
proceedings and may, on its own initiative or upon motion, receive additional evidence. the entire records of the proceeding under review. The record to be transmitted may be
abridged by agreement of all parties to the proceedings. The court may require or permit
Section 23. Finality of Decision of Appellate Agency. - In any contested case, the decision subsequent correction or additions to the record.
of the appellate agency shall become final and executory fifteen (15) days after the receipt
by the parties of a copy thereof. FINAL PROVISIONS

Section 24. Hearing Officers. - (1) Each agency shall have such number of qualified and Section 27. Repealing Clause. - All laws, decrees, orders, rules and regulations, or portions
competent members of the base as hearing officers as may be necessary for the hearing thereof, inconsistent with this Code are hereby repealed or modified accordingly.
and adjudication of contested cases.
Section 28. Separability Clauses. - In the event that any of the provisions of this Code is
(2) No hearing officer shall engaged in the performance of prosecuting functions in any declared unconstitutional, the validity of the other provisions shall not be affected by such
contested case or any factually related case. declaration.

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Section 29. Effectivity. - This Code shall take effect one year after its publication in the
Official Gazette.

DONE in the City of Manila, this 25th day of July, in the year of Our Lord, nineteen
hundred and eighty-seven.

(SGD.) CORAZON C. AQUINO

President of the Philippines

By the President:

(SGD.)JOKER P. ARROYO
Executive Secretary

Source: Supreme Court E-Library

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