Philippine National Budget Blockchain Act

THE PHILIP TWENTIETH CONGRESS OF THE RECEIVED® REPUBLIC OF THE PHILIPPINES ) DARCT 2 7 20252 First Regular Session CO TIME: 4:45 pm BY: BILLS INDEX SENATE S. No. 1463 Introduced by Senator Raffy T. Tulfo AN ACT MANDATING THE ESTABLISHMENT OF A NATIONAL BUDGET BLOCKCHAIN SYSTEM TO ENSURE TRANSPARENCY AND ACCOUNTABILITY IN GOVERNMENT SPENDING EXPLANATORY NOTE In a time when corruption, inefficiency, and lack of transparency continue to weaken public trust, there is an urgent need to modernize how the government manages and tracks public funds. For too long, ordinary citizens have shouldered the burden of a system that moves slowly, operates too opaquely, and remains vulnerable to misuse and abuse. This bill seeks to institutionalize the use of blockchain technology in the national budget system to ensure transparency, accountability, and integrity in government spending. Blockchain is a secure and decentralized digital ledger that records transactions in real time and cannot be altered without leaving a digital footprint. Once a transaction is entered, it becomes permanent and verifiable. Around the world, blockchain has already been utilized to protect data, prevent fraud, and strengthen institutional trust. Applied to the management of public funds, blockchain can make every peso traceable, every transaction auditable, and every record tamper-proof. It will enable agencies to share financial data seamlessly, reduce duplication, and eliminate opportunities for

manipulation. Citizens, in turn, will have easier access to verified information and greater confidence that their taxes are being used properly. More than a modernization effort, this is an anti-corruption measure. Through blockchain, we can close the gaps where public funds are lost and strengthen internal accountability. The bill also supports the digital transformation of government operations in line with the country's shift toward e-governance. By adopting secure and interoperable blockchain systems, the Philippine government can build a budget system that is more efficient, trustworthy, and open to public scrutiny. A government that truly serves its people must be transparent by design. Blockchain technology makes that possible - not by promise, but by proof. In view of the foregoing, the immediate passage of this bill is earnestly sought. RAFFY T. TULFO fog

THE OF THE SECA PHILIP TWENTIETH CONGRESS OF THE RECEIVED REPUBLIC OF THE PHILIPPINES DAQCT 2 7 20252 First Regular Session TIME: 4.45 pm BY: — BILLa * INDEX SENATE S. No. 1463 Introduced by Senator Raffy T. Tulfo AN ACT MANDATING THE ESTABLISHMENT OF A NATIONAL BUDGET BLOCKCHAIN SYSTEM TO ENSURE TRANSPARENCY AND ACCOUNTABILITY IN GOVERNMENT SPENDING Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short title. - This Act shall be known as the "Philippine National Budget

Blockchain Act"

Sec 2. Declaration of Policy. - It is hereby declared the policy of the State to uphold

4 transparency, accountability, and integrity in the use of public funds. The government § shall ensure that every peso collected from the people is spent properly, monitored efficiently, and made visible for public scrutiny. To achieve this, the State shall adopt blockchain technology as an institutional tool to modernize the national budget system and prevent corruption and unlawful manipulation of government resources. Blockchain shall serve as a digital safeguard that 10 records all budget transactions in a tamper-proof, traceable, and verifiable manner. Through this technology, the public shall have access to reliable information on how funds are allocated and spent, while oversight agencies are empowered to audit transactions in real time. The government recognizes that technology must not only make processes faster but must also make them cleaner and more accountable.

By implementing a blockchain-based budget system, the State affirms its duty to build a government that is transparent by design, ensuring that public service is delivered with honesty and respect for every taxpayer's contribution.

Sec. 3. Definition of Terms. - As used in this Act:

a) Blockchain refers to a decentralized and cryptographically secured digital system that permanently records transactions in sequence, making each entry verifiable, transparent, and resistant to alteration or tampering. b) National Budget Blockchain System refers to a government-managed blockchain platform that records and monitors, in real time, all transactions related to the preparation, release, and utilization of the national budget. c) Digital Public Record (DPR) refers to any budget-related entry or document uploaded onto the blockchain, representing the lawful use, movement, or allocation of public funds as a verifiable digital record. d) National Budget refers to the General Appropriations Act (GAA) or any law authorizing the government to allocate and spend public funds for programs, projects, and operations of the State. e) Smart Contract refers to a computer program or automated code deployed within the blockchain that executes pre-agreed conditions, such as fund releases or compliance verifications, once all specified requirements are met. f) Validator Nodes refers to authorized and independent entities, which may include government agencies, academic institutions, or accredited private organizations, tasked with verifying and maintaining the accuracy, transparency, and security of the blockchain system.

g) Interoperability refers to the capability of the blockchain system to connect, exchange, and process data across different government information systems, ensuring seamless integration and consistent transparency in financial reporting.

Sec. 4. Establishment of the National Budget Blockchain system - To strengthen

transparency and accountability in government spending, there shall be established a National Budget Blockchain System (NBBS) to record and monitor all stages of the national budget process, from appropriation and fund release to actual disbursement and 9 audit. The Department of Information and Communications Technology shall serve as the lead implementing agency, in conjunction with the Department of Budget and Management and the Commission on Audit. Together, these agencies shall develop and manage the blockchain infrastructure to ensure that all budget related data are accurate and publicly verifiable. All records of the national budget, including project allocations, disbursements, and procurement transactions, shall be registered in the blockchain as Digital Public Records (DPRs). Each entry shall contain verifiable information that cannot be altered or deleted without leaving a digital trace. Fund releases may be regulated by smart contracts when specific quantifiable milestones, such the approval process and other paperwork, are met. The NBBS shall allow real- time access for authorized oversight institutions and the public through a secure online portal, ensuring that every peso of the public's money can be tracked from the national level down to specific agencies, projects, and beneficiaries. Furthermore, all existing government financial systems shall be gradually integrated into the NBBS to ensure interoperability across agencies.

Sec. 5. Features of the Blockchain based budget system - The National budget

Blockchain system shall be established with the following essential features:

a) Permanence. - All transactions, allocations, and disbursements recorded in the system shall be permanent and tamper proof. No entry may be deleted or changed without leaving a verifiable record of such modification. b) Full Audit Trail. - The NBS shall provide a clear and continuous trail of how public funds move; from budget allocations stated in the General Appropriations Act, to release by the Department of Budget and Management, down to project implementation, and completion. c) Public Access and citizen oversight. - A public facing online dashboard shall be created where citizens, civil society groups, and media can view real time information on budget use, project progress, and fund disbursement. This feature shall be designed in clear, non-technical language to ensure accessibility to the general public. d) Automated Alerts and Reporting. - The system shall automatically generate reports and send alerts to oversight bodies such as the Commission on Audit (COA) and the DBM in cases of inconsistencies, delays, or unexplained transactions. e) Decentralized Verification. - Verification and validation of blockchain entries shall be carried out by multiple independent validator nodes, composed of government agencies, academic institutions, and accredited private or civil organizations to prevent centralized control or manipulation. f) Security and Privacy Safeguards. - The system shall employ advanced encryption, backup protocols, and disaster recovery mechanisms to ensure data protection. Sensitive information, such as personal identifiers, shall be anonymized in accordance with the Data Privacy Act. 9) Performance Transparency. - Each government agency shall have a performance dashboard showing budget utilization rates, project completion status, and audit compliance records. These shall be visible to both internal and public users.

Sec. 6. Duties and Responsibilities of Implementing Agencies.

a) DICT shall serve as the lead implementing agency. It shall be responsible for the design, development, and maintenance of the National Budget Blockchain System, ensuring its cybersecurity, interoperability, and long- term operation in coordination with the Department of Budget and Management and the Commission on Audit. b) DBM, shall integrate the entire national budget process into the NBBS. It shall ensure that all budget data, fund releases, and project disbursements are accurately recorded on the blockchain and made accessible to oversight agencies and the public in a timely manner. c) COA shall utilize the NBBS as an official audit tool to verify the flow and utilization of public funds in real time. It shall develop audit standards compatible with blockchain recordkeeping and promptly flag any inconsistencies or irregularities found in the system. d) All government agencies, bureaus, and government-owned or controlled corporations shall comply with the requirements of this Act by linking their respective financial systems to the NBBS and ensuring the accuracy and timeliness of all submitted data.

Sec. 7. Implementing Rules and Regulations. - The DICT, working with DBM and

COA, will issue the rules and regulations required for this Act's successful implementation within ninety (90) days of its enactment.

Sec. 8 Appropriations. - For the first implementation of this Act, P500,000,000.00

(five hundred million pesos) is hereby appropriated from the National Treasury's available funds. To make the switch to the blockchain-based budget system, this will cover the necessary research, development, infrastructure setup, system integration, and capacity building. The annual General Appropriations Act will then include any funds that may be required for its ongoing implementation and upkeep.

Sec. 9. Separability Clause. - If any provision of this Act is declared unconstitutional,

the remainder thereof not otherwise affected shall remain in full force and effect.

Sec. 10. Repealing Clause. - All laws, decrees, orders, rules, and regulations or

parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

Sec. 11. Effectivity. - This Act shall take effect fifteen (15) days after its publication

in the Official Gazette or in a newspaper of general circulation. Approved,