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 Agencies and Corporations
DEPARTMENT OF FINANCE (DOF) Insurance Commission (IC)
DEPARTMENT OF BUDGET AND National Tax Research Center (NTRC)
MANAGEMENT Central Board of Assessment Appeal (CBAA)
COMMISSION ON AUDIT Philippine Deposit Insurance Corporation
DEPARTMENT OF INTERIOR AND LOCAL (PDIC)
GOV’T Philippine Export-Import Credit Agency
OFFICE OF THE PRESIDENT (OP (PHILEXIM)
Government Service Insurance System
Bureaus:
(GSIS)
Bureau of Internal Revenue (BIR)
Social Security System (SSS)
Bureau of Customs (BOC)
Public Estates Authority (PEA)
Bureau of the Treasury (BTR)
Cooperative Development Authority (CDA)
Bureau of Local Government Finance
Regional Offices
(BLGF)
Offices:
Privatization and Management Office (PMO)
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/Local-Fiscal-
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