RELEASE AND USE OF FUNDS
Sec. 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions
enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment any item in this Act from
savings in other items of their respective appropriations.
Sec. 53. Meaning of Savings and Augmentation. Savings refer to portions or balances of any
programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available
after the completion or final discontinuance or abandonment of the work, activity or purpose for which the
appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related
costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus, enabled agencies to meet and deliver the required or planned targets, programs, and services approved in this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation,
which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In
no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the
use of appropriations otherwise authorized in this Act.
Sec. 54. Priority in the Use of Savings. In the use of savings, priority shall be given to the
augmentation of the amounts set aside for compensation, year-end bonus and cash gift, retirement gratuity,
terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, and
those expenditure items authorized in agency special provisions and in other sections of the General
Provisions in this Act.
Sec. 55. Rules in the Realignment of Funds. Realignment of funds from one allotment class to
another shall require prior approval of the DBM.
Departments, agencies and offices are authorized to augment any item of expenditure within Personal
Services and MOOE except confidential and intelligence funds which require prior approval of the President of
the Philippines. However, realignment of funds among objects of expenditures within Capital Outlays shall
require prior approval of the DBM.
Notwithstanding the foregoing, realignment of any savings for the payment of magna carta benefits
authorized under Section 40 hereof shall require prior approval of the DBM.
Sec. 56. Mandatory Expenditures. The amounts programmed, particularly for, but not limited to,
petroleum, oil and lubricants as well as for water, illumination and power services, telephone and other
communication services, and rent requirements shall be disbursed solely for such items of expenditures:
PROVIDED, That any savings generated from these items after taking into consideration the agency’s full
year requirements may be realigned only in the last quarter and subject to the rules on the realignment of
funds provided in the preceding section.
Use of funds in violation of this section shall be void, and shall subject the erring officials and employees
to disciplinary action in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.
Sec. 57. Expenditures for Business-Type Activities. Appropriations for the procurement of supplies
and materials intended to be utilized in the conduct of business-type activities shall be disbursed solely for
such business-type activity and shall not be realigned to any other expenditure item.
Use of funds in violation of this section shall be void, and shall subject the erring officials and employees
to disciplinary action in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. No. 292, and to appropriate criminal action under existing penal laws.
Sec. 58. Confidential and Intelligence Funds. No amount in this Act shall be released or disbursed
for confidential and intelligence activities unless approved by the President of the Philippines, or specifically
identified and authorized as such confidential or intelligence fund in this Act.
Confidential and intelligence funds provided for in the budgets of departments, bureaus and agencies
including amounts from savings authorized by special provisions to be used for intelligence and counterintelligence activities, shall be released only upon approval of the President of the Philippines:
PROVIDED, That at least eighty percent (80%) of confidential and intelligence funds shall be used for field operations.
All departments, bureaus and agencies shall submit to the President of the Philippines a quarterly report
on the accomplishments in the use of confidential and intelligence funds.
Implementation of this section shall be subject to guidelines to be issued by the DBM.
Sec. 59 Realignment of Funds for Foreign-Assisted Projects. The amount appropriated in this Act
for the implementation of foreign-assisted projects, including loan proceeds and peso counterpart, shall not be realigned except to other foreign-assisted projects: PROVIDED, That an agency may, with valid reason
realign from one sub-project to another within the same foreign-assisted project as long as total project cost as prescribed in the relevant loan agreement is not exceeded.
Sec. 60. Availability of Appropriations. Appropriations for MOOE and Capital Outlays authorized in
this Act shall be available for release and obligation for the purpose specified, and under the same special
provisions applicable thereto, for a period extending to one fiscal year after the end of the year in which such
items were appropriated: PROVIDED, That a report on these releases and obligations shall be submitted to
the Senate Committee on Finance and House Committee on Appropriations, either in printed form or by way
of electronic document.
Sec. 61. Prohibition Against Impoundment of Appropriations. No appropriations authorized under
this Act shall be impounded through retention or deduction, unless in accordance with the rules and
regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the purposes,
programs, projects, and activities authorized under this Act, except those covered under the Unprogrammed
Fund, shall be released pursuant to Section 33 (3), Chapter 5, Book VI of E.O. No. 292.