KEY MESSAGES
| ■ House Bill No. 2807 or the “Budget Reform Bill” (BRB), filed in the 18th Congress, aims to institutionalize fiscal responsibility principles (Section 14) to guide fiscal policy-making in the Philippines. Among these principles are macroeconomic stabilization and inclusive economic development. The BRB also requires a set of reports from the Executive Branch to regularly inform Congress about the goals, targets, and conduct of fiscal policy. |
| ■ The inclusion of macroeconomic stability, fiscal sustainability, and inclusive economic development in the BRB’s principles is consistent with a holistic view of fiscal responsibility. The principles go beyond deficit and debt targets as ultimate measures of fiscal responsibility, and makes macroeconomic stabilization as just one of several fiscal policy objectives. By identifying inclusive economic development as a principle, the BRB ensures that the quality of expenditures, and not just its level, is given emphasis. |
| ■ The BRB adopts a principles-based approach towards fiscal responsibility, in which it outlines a set of ideals in the conduct of fiscal policy. It does not set numerical thresholds or fiscal rules. Thus, it may be said that the BRB espouses a principles-based but not a rules-based approach. |
| ■ Reportorial requirements under Sections 15 to 20 of the BRB is an accountability mechanism to strengthen the power of Congress to hold the President to account for the conduct of fiscal policy. Section 17 on the Mid-year and Annual Fiscal Reports, and Section 19 on the report explaining deviations from the target are two important clauses that provide clear guidance on the information that the President needs to disclose to Congress. Section 19 is particularly significant because it mandates the President to report to Congress any deviation from the target and the means to address fiscal issues. In effect, the President is directly subjected to Congressional scrutiny for actions that result in deviations from the target. |
