General Principles

of Public Fiscal
Administration
Prepared By:
Jonathan A. Rivera

Overview of Public Fiscal

Administration
Public Fiscal Administration refers to the formulation,
implementation, and evaluation of
the Policies and Decisions on
taxation, revenue administration,
resource allocation, budgeting,
public expenditure, borrowing, debt
management, accounting, and
auditing.

 It is also defined as the act of managing incoming and

outgoing monetary transactions and budgets for
governments, educational institutions, nonprofit
organizations, and other public service entities.
Public administration has to do with the practical
management and direction of the various organs of the
state and the execution of state policies by the
executive and administrative officers entrusted with
such functions.

 Public - mean the whole government sector the NGAs

(National Government Agencies), GOCCs (Government
owned and Controlled Corporations), GFIs (Government
Financial Institutions), and LGUs (Local Government
Units). It also mean, the people whom the government
serve the beneficiaries, voters, taxpayers, youth,
farmers, and the urban poor.

 Fiscal refers to fiscal policies closely linked with other

policy instruments of the government such as monetary,
price and trade policy, investment and wage
Administration refers to the Formulation,
Implementation, and Evaluation of Government fiscal
policies.

The principal agencies tasked with fiscal

functions:

Congress, especially
the Lower House,
Department of
Finance
Department of
Budget and
management
Commission on Audit

Other agencies tasked with fiscal functions:

CONGRESS
DEPARTMENT OF FINANCE (DOF)
DEPARTMENT OF BUDGET AND
MANAGEMENT
COMMISSION ON AUDIT
DEPARTMENT OF INTERIOR AND
LOCAL GOVT
OFFICE OF THE PRESIDENT (OP
Bureaus:
Bureau of Internal Revenue (BIR)
Bureau of Customs (BOC)
Bureau of the Treasury (BTR)
Bureau of Local Government
Finance (BLGF)
Offices:
Privatization and Management

Agencies and Corporations

Insurance Commission (IC)
National Tax Research Center
(NTRC)
Central Board of Assessment
Appeal (CBAA)
Philippine Deposit Insurance
Corporation (PDIC)
Philippine Export-Import Credit
Agency (PHILEXIM)
Government Service Insurance
System (GSIS)
Social Security System (SSS)
Public Estates Authority (PEA)
Cooperative Development
Authority (CDA)
Regional Offices

Meaning of Administrative Agency.

Administrative Agency - is the term used

generally to describe an agency exercising some
significant combination of executive, legislative
and judicial powers. It is a government body
charged with administering and implementing
particular legislation.
Under the Administrative Code of 1987, the term
agency of the government is used to refer to any
of the various units of the government, including
a department, bureau, office, instrumentalities,
or GOCCs, or LGUs.

PUBLIC FISCAL ADMINISTRATION AT A GLANCE

Also talks about government revenues and expenditures and their
impact in the economy
Concerned with the implementation and practicalities of these concepts
Encompasses the practical aspects of fiscal governance such as:
> revenue collection
> preparation of budgets
> budget allocation and spending
> management of debt
> auditing of account
Deals with, but is not restricted to the more limited issues covered by
public fiscal
In recent times, however, with the emergence of the field of public
administration, much interest has been directed towards the political
administrative and management aspects of formulating, implementing
and evaluating fiscal policy-hence, the term public fiscal administration
Is centered on the determination and analysis of fiscal policies starting
from their formulation to their implementation and evaluation.

Fiscal Policy Functions

Allocation
It is the process by which total resource use is
divided between private and social goods and
which the mix of social goods is chosen.
In the performance of allocation function,
fiscal policy is expected to regulate the
balance in making available both private goods,
merit goods, and social goods. The government
intervenes through subsidies, price regulation,
and direct provision of social goods.

Fiscal Policy Functions

Distribution
The distribution of income and wealth is
shaped by the distribution of the factors of
production.
Fiscal policy is directed toward correcting
this income and wealth.
ex. high tax for rich, and low tax for poor;
favorable public policies on agrarian
reform, wages, labor and employment,
among others

Fiscal Policy Functions

Stabilization
instability may be due to changes in prices of major
imports, cost of foreign borrowings, and the availability
of foreign borrowings which lead to huge deficits in the
budget and balance of payments and trade.
Using expenditure and tax policies for stabilization in
developing countries may be more difficult. An increase
in expenditures may entail either additional taxes or
more borrowing. The low tax base and inefficient tax
administration makes a case of public borrowing.
A country aspiring to achieve growth and development
may have to experience instabilities and suffer chronic
balance of payments deficit, severe inflation, high levels
of unemployment and underemployment and the like.

Definition of Administrative Relationship.

Supervision and Control shall include authority

to:
Act directly whenever a specific function is entrusted
by law or regulation to a subordinate;
Direct the performance of duty; restrain the
commission of acts;
Review, approve, reverse or modify acts and decisions
of subordinate officials and units;
Determine priorities in the execution of plans and
programs; and
Prescribe standards, guidelines, plans and programs.

Definition of Administrative Relationship.

Administrative Supervision It shall govern the administrative

relationship between a department or its equivalent and
regulatory agencies or other agencies.
To generally oversee the operations of such agencies and to ensure that
they are managed effectively, efficiently and economically but without
interference with day-to-day activities;
To require the submission of reports and cause of conduct of
management audit, performance evaluation and inspection to
determine compliance with policies, standards and guidelines of the
department;
To take such action as may be necessary for the proper performance of
official function, including rectification of violations, abuses and other
form of maladministration; and
To review and pass upon budget proposal of such agencies but may not
increase or add to them.

Scope of Powers of Administrative Agencies.

Express and Implied Powers The Jurisdiction and powers of

administrative agencies are measured and limited by the
Constitution or law creating them or granting their powers.
Inherent powers An administrative agency has no inherent
powers, although implied powers may sometimes be spoken of as
inherent. Thus, in the absence of any provision of law,
administrative agencies do not possess the inherent power to
punish or contempt which has always been regarded as a
necessary incident and attribute of courts.
Quasi-Judicial Powers Official powers cannot be merely
assumed by administrative officers, nor they can be created by
the courts in the exercise of their judicial functions.

Powers of Administrative Agencies Classified

As to Nature. The powers of administrative

agencies may be classified into:
Investigatory power
Quasi-legislative or Rule-making powers; and
Quasi-judicial or adjudicatory powers.

As to the degree of subjective choice.

According to the degree of subjective choice
involved in their exercise, the powers of
administrative agencies are, in general,
classified either as discretional or ministerial.

Fiscal Control Mechanisms

Prevent Misappropriation of Funds requires review and approval
by the administrative official of the line or operating agency, of
all requests for money releases and budgetary allotments,
vouchers and similar papers before payments are made so that
expenditures are in accordance with policy and law and not
irregular, unnecessary, excessive, extravagant and
unconscionable
Control to Implement Prospective Policy proactive
administration inhibits governmental units from directly
transacting and negotiating money matters since such kind of
transaction is officially channeled through the Department of
Budget and Management in the form of budget estimates as
endorsed by the President

Fiscal Control Mechanisms

Ensure the Wisdom and Propriety of Expenditure
claims for payment from public funds, legality,
prudence, reasonableness, the morality of the claim
or charge should be established. A review of existing
contracts and transactions should be made.
Prevent Deficits Fiscal supervision and control may be
useful but should not unduly interfere with agency
prerogative to carry out programs mandated by the
constitution and the laws.

References:
De Leon, H & De Leon Jr., H. (2010) Administrative Law: Text and Cases. Rex
Book store. Manila Philippines.

Public Administration in the Philippines Running a Bureaucracy retrieved on

August 18, 2016 retrieved from http://www.scribd.com/doc/37770745/LocalFiscal-Administration
Department of Budget and Management Retrieved on August 18, 2016 from
http://www.dbm.gov.ph/?page_id=8959.
Pilar, Nestor N., Philippine Public Administration: From Classical to New Public
Administration to New Public Management', Philippine Journal of Public
Administration, Vol. LII