Budget and Management Secretary Florencio B. Abad announced that beginning 2013, the Department of Budget and Management (DBM) will begin phasing out Special Allotment Release Orders (SAROs) and Agency Budget Matrices (ABMs) in authorizing fund releases to government departments and agencies.


"The Aquino administration continues to aim for faster budget execution so that we can facilitate the efficient delivery of public services. We are now moving towards eliminating SAROs and ABMs as a rule, with the ultimate aim of using the approved national budget as a comprehensive release order come 2013," Abad said.

The DBM Secretary added that under the proposed expenditure plan, only a few budgetary items will require the clearance of the DBM before the corresponding releases can be made.

Traditionally, all agencies are required to secure ABMs—a disaggregated record of an agency's programmed funds—before they can receive their respective fund releases. For projects that require further clearance, the agency must submit a Special Budget Request to the DBM. Once the project and its required funding are approved, the DBM issues a SARO to the implementing agency.

"Release documents like the SARO and ABM are supposed to aid in record-keeping and budget transparency. We noted, however, that fulfilling these documentary requirements can take considerable time for agencies, time that could otherwise have been spent in implementing crucial projects," he added.

Abad noted that the elimination of SAROs and ABMs will occupy two phases, the first of which will begin on fiscal year 2013. The second phase will be executed in 2014, during which the Administration expects to completely phase out the release documents.

He also said that the removal of SAROs and ABMs will rest on the full disaggregation of agency lump sums in the ongoing 2013 budget preparations. The DBM earlier reported that lump sum funds for government departments and agencies will be stricken out from the 2013 proposed budget, paving the way for heightened transparency in public fund management.

"Once the General Appropriations Act can act as the release document, appropriations for all departments and agencies will have a one-year validity period. Lapsed allotments will not automatically carry over into the next fiscal year," Abad said.

Under instruction from President Benigno S. Aquino III, the DBM has pushed for broader reforms in its budget preparation process, which began with the budget call in late December 2011. Key reforms include the expanded engagement of civil society organizations and grassroots communities in the budget process, as well as the enhancement of public expenditure management reforms.

The 2013 budget also promises to strengthen its focus on President Aquino's five Key Result Areas as identified in his Social Contract with the Filipino People.

Meanwhile, the DBM hit the ground running in executing the 2012 General Appropriations Act, having released around 90.5% of all agency budgets in the first two weeks of January alone.

"We are very optimistic about our performance in 2012, and are confident that fund releases will be quicker and more efficient this year. Through effective public fund management, we can ensure that critical government services are swiftly delivered, and that the gains of good governance are immediately and substantially felt by all Filipinos," Abad said.

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