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: ADMINISTRATIVE ORDERS
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ADMINISTRATIVE ORDER NO. 5
ADMINISTRATIVE ORDER NO. 5 -
ADOPTION OF FISCAL DISCIPLINE MEASURES IN THE PUBLIC SECTOR FOR FY 2001
WHEREAS, the government aims to restore
fiscal discipline to sustain economic recovery and improve investor
confidence in the country;
WHEREAS, guarantee calls from BOT projects and larger interest payment
and account payable obligations have emerged, adding further pressure
on the government's available resources;
WHEREAS, the magnitude of the fiscal deficit problem necessitates
intensive efforts on both the revenue generation and expenditure
reduction fronts, and calls for the concerted action of all public
sector entities, including government corporations and local
governments;
WHEREAS, all public sector entities will have to implement fiscal
discipline measures and review their spending programs to improve
operating efficiencies and enhance their capacity to raise income and
remit funds promptly to the national treasury as mandated by laws and
other issuances;
WHEREAS, there is a need to review ongoing programs and projects in
order to minimize the implementation of ineffective and inappropriate
programs/projects to improve the focusing of scarce resources on the
priority concerns of poverty reduction, global competitiveness and
effective governance;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, do
hereby order and direct:
Section 1. All National Government Agencies (NGAs),
Government-Owned and Controlled Corporations (GOCCs), Government
Financial Institutions (GFIs) and Local Government Units (LGUs) are
directed to fully comply with laws and issuances requiring the prompt
remittance of fees and other income, guarantee fees and other
obligations to the Bureau of Treasury, as well as the remittance of tax
obligations to the Bureau of Internal Revenue and the Bureau of
Customs. They shall also fully comply with the requirements of the
following:
(1)
Republic Act No. 7656 approved on November 9, 1993 which directs GOCCs
and GFIs to remit dividends to the Treasury amounting to at least fifty
percent (50%) of their annual earnings. The Department of Finance
shall, however, exercise its authority to mandate larger dividend
remittances in the form of cash dividends based on its review of the
financial conditions of said agencies;
(2) Executive
Order No. 338 issued on May 17, 1996; and
(3) Executive
Order No. 197 issued on January 13, 2000.
Sec. 2. The Department of Finance (DOF) and the
Department of Budget and Management (DBM), in coordination with NGAs,
GOCCs, and GFIs concerned, shall review the legal basis/authority of
existing Special Accounts in the General Fund, Trust Liability Accounts
and Authorizations to Use Income to determine whether or not the
purpose for which such funds/authorizations were created has been
realized and accordingly recommend to the Office of the President those
which may be abolished/discontinued.
Sec. 3. All NGAs, GOCCs, and GFIs shall generate
savings equivalent to at least ten percent (10%) of non-personal
services expenditures based on the 2000 reenacted budget or corporate
operating budget. Agencies under the social services sector, and those
providing tourism and agrarian reform services shall, however,
implement expenditure reduction measures equivalent to five percent
(5%) of non-personal services budget.
Sec. 4. In generating the above savings target,
all the above agencies shall endeavor to source the savings from the
reduction of items which do not directly support the attainment of
desired sector outcomes. They may therefore consider reducing the
following:
(1)
donations, contributions, grants and gifts;
(2)
expenditure for consultancy services regardless of fund source, except
those directed towards the government's institutional reform efforts;
(3)
expenditures for trainings/seminars/workshops. Those to be conducted by
public entities shall be done in a simple and cost effective manner;
(4) volume of
consumption of fuel, water, electricity and other utilities;
(5)
expenditures for travelling, unless clearly beneficial to Philippine
interests as may be determined by the President of the Philippines in
the case of foreign travel of government personnel;
(6)
expenditures for advertisements, publications and related items;
(7)
expenditures for office supplies; and
(8)
expenditures for rents and leases. All NGAs, GOCCs, and GFIs owning
buildings with extra office spaces shall share them with those
presently renting office space from private owners.
Sec. 5. All NGAs, GOCCs, and GFIs shall suspend
the following:
(1)
construction of new buildings for government offices;
(2) purchase
of furniture and fixtures, and motor vehicles not directly supportive
of frontline services of the agency; and
(3) conduct of
celebrations, and cultural and sports activities not related to the
core functions of the agency.
Sec. 6. Consistent with the streamlining of the
bureaucracy and to assist in raising the targeted savings under Sec. 5, all NGAs, GOCCs, and GFIs are prohibited from implementing the
following activities unless covered by available funds and specifically
authorized by the Office of the President, as recommended by the DBM:
(1)
operationalization of new agencies/offices;
(2) expansion
of organizational units and/or creation of positions; and
(3) creation
of task forces, inter-agency committees and interim bodies.
Sec. 7. All NGAs, GOCCs, and GFIs are prohibited
from undertaking the following to raise over and above that mandated
under Sec. 5:
(1)
hiring of new personnel, except for:
(a) key
positions (division chiefs and above);
(b) one of a
kind position in the agency;
(c) positions
in schools under the Department of Education, Culture and Sports,
Commission on Higher Education, Technical Education and Skills
Development Authority, Department of Science and Technology and State
Universities and Colleges (SUCs);
(d) medical
and allied medical positions in hospitals;
(e)
information technology positions;
(f) uniformed
personnel in the Department of National Defense, Department of the
Interior and Local Government, the Philippine Coast Guard and the
National Mapping and Resource Information Authority; and
(g) positions
in agencies whose staffing patterns have been streamlined and approved
by the Department of Budget and Management (DBM) beginning January 1,
2000, provided that only twenty percent (20%) of vacant administrative
positions as of the effectivity date of this Order may be filled by new
hires.
(2) Filling of
vacant positions in regional offices of NGAs whose functions have been
devolved to Local Governments; and
(3) Grant of
new/additional/increased allowances/benefits except for step increments
based on length of service in accordance with Joint Senate-House of
Representatives Resolution No. 1, s. 1994.
Sec. 8. Similarly, as an additional savings
measure, low priority programs/activities/projects (PAPs) shall be
discontinued or scaled down. For this purpose, the National Economic
and Development Authority (NEDA) and the DBM shall conduct Sector
Effectiveness and Efficiency Reviews (SEER) in coordination with
agencies and departments concerned, in order to assess ongoing and
proposed new major programs and projects, more specifically:
(1)
Classify PAPs into three categories: high, medium, low priority in
accordance with their appropriateness in meeting sector outcomes;
(2) Determine
which of the low and medium priority PAPs are to be deferred, scaled
down or abolished; and
(3) identify
and adopt measures to address the implementation of on-going high
priority projects that are encountering significant
problems.
Sec. 9. All NGAs, GOCCs, and GFIs shall each
submit to the Office of the President through the DBM, not later than
fifteen (15) days after the issuance of this Order, the fiscal
discipline measures it shall undertake during the year and an estimate
of the revenues and savings to be generated. For GOCCs and GFIs, the
information shall be made in the context of the submission of their
corporate operating budget. Thereafter, a semestral report on the
revenues and savings actually generated shall be submitted.
Sec. 10. Heads of NGAs and the Boards of Directors
of GOCCs and GFIs shall be responsible for the strict implementation of
this Order. Any violation thereof shall be dealt with accordingly.
Sec. 11. The Legislative and Judicial Branches of
Government as well as agencies vested with fiscal autonomy and LGUs are
enjoined to adopt the provisions of this Order. LGUs are reminded to
adhere to prescribed limits on personal services expenditures in the
Local Government Code and shall endeavor to maximize the utilization of
twenty percent (20%) of their Internal Revenue Allotments for
development projects.
Sec. 12. The DBM shall issue the necessary rules
and regulations for the effective implementation of this Order. NEDA,
in coordination with DBM, shall issue the specific guidelines on the
conduct of SEER.
Sec. 13. This Administrative Order shall take
effect immediately upon its approval;.
Done in the City of Manila,
this 28th day of February, in the year of Our Lord, Two Thousand and
One.
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