A.        General Policies for All Entities

1.1    All national government entities, including state universities and colleges, government corporations and local government units, and other political subdivisions shall institute internal economy measures and budgetary restraint. They shall likewise review office procedures and decentralize operations whenever feasible to eliminate unnecessary reports, requirements, and in general, red tape and unnecessary expenditure. Agency heads shall institute necessary measures to optimize the use of rental, utilities, supplies and materials.

1.2    All entities shall identify and reassess their organizational objectives and functions to determine duplicatory, overlapping, non-essential and non-productive activities which may be eliminated, postponed or rescheduled to generate reserves.   

1.3    Work simplification techniques shall be vigorously applied to increase office productivity without adding personnel or equipment, thereby reducing operating costs.

1.4    Heads of agencies shall pursue more vigorously the implementation of their Management Audit and Improvement Program as called for under Letter of Instructions No. 802.

1.5    Filling of positions shall not be allowed in entities which are in the process of reorganization and where the final staffing pattern/compensation scheme has not been duly approved.

1.6    Full implementation of the New Performance Appraisal System of the Civil Service Commission shall be effected.  

1.7    The restrictions on the purchase of motor vehicles, teaching aids, books, and other items contained in LOImp. No. 29 and LOI No. 1043 are hereby reiterated. Any and all exemptions issued on behalf of specific agencies of government, including state universities and college, are hereby revoked.

1.8    The Philippines shall as much as possible be represented in international conferences by qualified embassy personnel assigned abroad, nearest to where the conferences are to be held or conducted, as provided in Memorandum Circular No. 355 dated May 19, 1970.

1.0    General Policies for National Government Agencies, including State Universities and Colleges

National Government agencies shall re-examine their respective operating budgets to identify additional savings and shall strictly conform to the following financial guidelines:

1.1.1    In no case may national government agencies divert funds from one item of expense to another contrary to allocations in the approved Budget Program for CY 1981, except as may be authorized under P.D. No. 1177;

1.1.2    All accounts payable and unliquidated obligations which are two (2) years old or over against which no actual administrative or judicial claims have been filed or which are not covered by perfected contracts on record and other undocumented payable accounts, irrespective of age, shall be reverted to the unappropriated surplus as provided for under Executive Order No. 228. Prior years' receipts recorded as trust liabilities but not authorized under Batas Pambansa Blg. 80 shall be reverted to the unappropriated surplus of the General Fund. Current year receipts recorded as trust liabilities but not authorized under Batas Pambansa Blg. 80 shall be credited to income of the General Fund. No disbursement shall be made chargeable against trust liability accounts unless exemption from the provisions of Letter of Instructions No. 981 is authorized by the Committee created by Sec. 51 of P.D. No. 1177. The Commission on Audit is hereby instructed to determine all accounts payable and unliquidated obligations that shall be reverted to unappropriated surplus.

1.1.3    Mandatory Reserve Requirements. The Ministry of the Budget shall implement the following mandatory reserves on the budget program of all agencies of the National Government, in order to generate P5.1B budgetary reserves for CY 1981 aside from additional reserves that may be voluntarily offered:  

1.    For new positions itemized in the Personal Services Itemization Document and lump sum items for creation of new positions, fifty percent (50%) of the programmed appropriations;

2.    For emergency laborers, including contractual employees and consultancy services, except for vocational schools and hospitals, twenty five percent (25%);

3.    For maintenance and other operating expenses. On traveling expenses, fifty percent (50%) or more; on intelligence and extraordinary expenses; thirty percent (30%); on supplies and materials, ten to fifteen percent (10 to 15%); and on other maintenance and other operating expenditures, ten percent (10%);

4.    For equipment outlays, fifty percent (50%) or more;

5.    For capital outlays, without prejudice to the completion of on-going projects, twenty percent (20%);

6.    On Special Accounts of the General Fund except Oil Equalization Fund and state universities and colleges under certain exceptions, ten percent (10%).

2.0    Specific Policies for National Government Agencies

2.1    Existing vacant positions, including unfilled new positions in CY 1980, may be filled by agencies without the need for authority from the Personnel Effectiveness Review Committee (PERC) only in the following cases:  

2.1.1    When the filling of positions is being made by virtue of a promotion from within, provided the position involved has not been declared redundant by the Ministry of the Budget;

2.1.2    When the position is the sole item of its class in the agency and charged with essential functions directly rendered to the agency's clients;

2.1.3    When the position pertains to Heads of organizational units from division level and up; and

2.1.4    When the position has been identified by the Ministry of the Budget as necessary in order not to hamper essential projects.

2.4.1    Officers and employees entitled to commutable/reimbursable transportation allowance shall elect between the proportionate daily rate of such allowances and the daily allowances as prescribed by COA General Circular No. 127, but in no case shall they be paid both while away on official business from their permanent official station.

2.4.2    Only those school officials, faculty members and employees who teach or work outside of regular office hours in school, college or university programs such as evening summer and Saturday classes for secondary, post secondary, undergraduate or graduate programs and only those school officials and faculty members who participate in programs of vital national significance as envisioned under Letter of Instructions No. 1039 may be authorized honorarium at rates prescribed by the Minister of the Budget.

2.7.1    Domestic travel or travel outside of one's assigned station shall be limited to what is absolutely necessary for the good of the service.

2.7.2    When absolutely necessary, participation of the Philippine representatives from the home office in international conferences/activities shall at all times be composed of not more than two (2) persons, a senior official of the level/rank called for in such activity and one (1) technical staff or assistant if needed. Required representation from the foreign services (MFA) should come from duly accredited Philippine Missions. Any deviation herein shall require special request and full justification to be submitted to the Office of the President, through the Minister of Foreign Affairs.

2.8.1    The cheapest and most efficient means of transportation in hauling and handling of equipment and supplies and materials, must be availed of.

2.8.2    Proper planning, scheduling and synchronization of transport items should be made. All vehicles of the Republic of the Philippines shall be subject to trip tickets approved by individual trips, except use of government motor transportation authorized under Sec. 43 of Batas Pambansa Blg. 80 and other pertinent existing regulations.

2.8.3    A total ban shall be enforced on the use of government vehicles on Saturdays, Sundays, official holidays and before 7:30 a.m. and after 6:00 p.m. during working days unless specifically authorized by the Ministry/Agency Head.

2.8.4    Transport of vehicles and other equipment weighing more than 500 kilograms by sea shall be authorized only by the Minister/Department Head for all agencies and attached units in the regions, including state universities and colleges.

2.9.1    As much as possible, government agencies conducting training programs and other similar activities shall avail of lecturers, resource persons and/or facilitators from their own ranks to minimize expenses for honoraria.

2.9.2    Government agencies holding seminars and other similar activities for their regional or field personnel shall conduct such activities at their regional or field centers.

2.9.3    Except when expressly authorized, Ministry/Agency Heads, government agencies may not hold seminars in expensive hotels, clubs and restaurants. The use of less expensive government facilities should be preferred, if available and suitable.

2.13.1    Agencies shall not be provided medical/dental units, except in those cases where units are intended to benefit the clientele of the agencies concerned and not the agency staff members.

2.13.2    The procurement of equipment, supplies and materials, if economical must be on site where these are required.

1.0    Government-Owned and/or Controlled Corporations

1.1    Government-Owned and/or controlled corporations shall review and reassess their budgets to make them more flexible and consistently supportive of the main thrusts of the government. They shall be subject to the same restrictions as that of the national government agencies, whenever applicable, specifically the reduction/elimination of redundant activities.

1.2    Self-sustaining institutions/corporations are enjoined to implement necessary conservation measures to effect reduction in the consumption of electric power, gasoline, water, etc., to effect desired savings in operations.

1.3    The Ministry of the Budget shall conduct a review of the peso counterpart requirements of foreign-assisted projects which are normally released to corporations as part of equity, with the purpose of reducing same to the level as required by the covering loan agreements and/or actual drawdowns on foreign loan/grant proceeds.

1.0    Local Government Units

1.1    Local government units shall likewise follow the rigid economy measures for national government agencies and reassess their budgetary requirements to be able to put up the necessary contingency reserve of at least 10% of its general and infrastructure fund regular income. This contingency reserve shall only be made available for expenditures of local government units to cover their urgent needs, and as a last recourse, when no local funds are available, subject to local government budget review pursuant to PD. No. 1375.  

1.2    Hiring of contractual and consultancy services may be allowed only for special projects requiring special expertise not available in house and only for specified periods of time. Casual or emergency personnel may be hired when there are activities which are seasonal and intermittent in nature and whose peak loads occur regularly during specific times of the year.

1.3    No local funds shall be appropriated to increase or adjust salaries or wages of officials and employees of the national government assigned in the local government, except as may be expressly authorized by the President.

1.4    All live-in training programs sponsored by local governments shall be suspended except those that may be jointly approved by the Chairman of the Civil Service Commission and the Minister of the Budget.

1.5    The purchase of equipment shall be suspended except for urgently needed items which shall not exceed twenty thousand pesos per unit, supplementing restrictions in A.1.7.

1.6    Accounts payable and unliquidated obligations not covered by perfected contracts and against which no administrative or judicial claims have been filed, as well as prior years savings, shall be reverted to the unappropriated surplus of the General or Infrastructure Fund of Local government units, as the case may be.  

REPEALING CLAUSE

Since 19.07.98.