Peoples Participation in the National Budget Process Act

sochalle TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) AUG -4 P1:25 SENATE RECEIVED EX. S. No._ Introduced by Senator Loren Legarda AN ACT INSTITUTIONALIZING THE PARTICIPATION OF CIVIL SOCIETY ORGANIZATIONS (CSOs) IN THE PREPARATION AND AUTHORIZATION PROCESS OF THE ANNUAL NATIONAL BUDGET, PROVIDING EFFECTIVE MECHANISMS THEREFOR, AND FOR OTHER PURPOSES EXPLANATORY NOTE Civil society participation ensures that the voices of ordinary citizens, especially those from marginalized sectors, are heard in governance. In 2023, the Philippines scored 0.649 on the Civil Society Participation Index, slightly above the global average of 0.641 but down from 0.712 in 2022. This remains close to the country's historical average of 0.647, but marks a steady decline from the 2016 high of 0.83, reflecting a shrinking space for civic engagement over time. 1 While civil society in the Philippines has historically played an active role in various facets of governance, one critical area that remains underutilized is national budgeting. To reverse this trend and expand the avenues for meaningful participation, this bill is introduced to institutionalize civil society's role in the preparation of the annual national budget. By giving the people a more active voice in determining how public resources are allocated, the bill seeks to foster a more participatory and accountable 1 The Civil Society Participation index is produced by the Varieties of Democracy (V-Dem) Institute, a globally recognized research center based at the University of Gothenburg, known for its rigorous and peer-reviewed assessments of democratic institutions worldwide. The Global Economy. (2025). Philippines: Civil society participation index. Retrieved July 29, 2025, from https://www.theglobaleconomy.com/Philippines/civil_society_participation_index/ V-Dem(2025) - processed by Our World in Data. Civil society participation index - V-Dem [dataset]. Our World in Data, "Democracy" topic. Retrieved July 29, 2025, from https://ourworldindata.org/grapher/civil-society- participation-index?mapSelect=~PHL

budgeting process, one that directly aligns public spending with the needs and priorities of the communities it intends to serve. This bill strengthens public accountability in budget preparation and authorization by institutionalizing the participation of legitimate and independent Civil Society Organizations (CSOs) at all levels of government. Beyond merely granting access to hearings and budget documents, the bill now establishes a comprehensive accreditation framework, mandates sectoral representation, and integrates CSO involvement within the existing performance-based budgeting system. Among its new provisions are: • At least 30% of participating CSOs must come from marginalized, disadvantaged, or underrepresented sectors, such as women, Indigenous Peoples, persons with disabilities, and environmental advocates. This provision ensures that the most affected by public spending decisions are meaningfully represented. • To safeguard the independence of the process, the bill mandates full disclosure of affiliations, contracts, and funding sources. A Code of Conduct and Grievance Redress Mechanism will also be institutionalized for CSOs to uphold standards of ethical participation. • It requires NGAs and GOCCs to make available all relevant budget documents, agency performance ratings, and hearing records, including those from the bicameral conference committee. This will allow for evidence-based monitoring and policy critique by CSOs. • CSOs will have access not only to budget proposals but also to agency performance indicators. This empowers them to assess whether public expenditures are aligned with stated outcomes and national goals. The national budget is a reflection of national priorities, a tool for governance, and a measure of public accountability. For civil society participation to be truly meaningful in this process, mechanisms must not only promote engagement but also ensure integrity, transparency, and fairness in how that participation is structured and exercised.

By embedding these new safeguards and participatory structures, this proposed measure seeks to shift the culture of budgeting from closed-door negotiations to one that is grounded in public oversight, constructive engagement, and sectoral equity. In view of the foregoing, the immediate enactment of this bill is earnestly sought. LOREN LEGARDA

Sellate Ditier of the tortarg TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) First Regular Session ) 25 AUG -4 P1:25 SENATE RECEIVED BV S. No. 804 Introduced by Senator Loren Legarda AN ACT INSTITUTIONALIZING THE PARTICIPATION OF CIVIL SOCIETY ORGANIZATIONS (CSOs) IN THE PREPARATION AND AUTHORIZATION PROCESS OF THE ANNUAL NATIONAL BUDGET, PROVIDING EFFECTIVE MECHANISMS THEREFOR, AND FOR OTHER PURPOSES 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 "People's Participation

2 in the National Budget Process Act".

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

4 facilitate the establishment of adequate consultation and feedback mechanisms to 5 promote meaningful and effective participation of Civil Society Organizations (CSOs) 6 in the preparation and authorization of the annual national budget in order to ensure 7 that the annual appropriations will be an instrument of development that is reflective 8 of the national objectives, strategies, and plans beneficial to the people.

Sec. 3. Definition of Terms. - For purposes of this Act, the following terms are

defined as follows: 1. Accreditation - refers to the registration process of CSOs with the National Government Agencies (NGAs) and Government-Owned and Controlled Corporations (GOCCs), in order to allow them to participate in the preparation and authorization of the annual national budget; 2. Accredited CSO - refers to CSOs that have fulfilled the requirements in

Section 5 of this Act;

3. Budget Call - refers to the budget document issued by the Department of Budget and Management (DBM) and sent to all NGAs and GOCCS, which contains the policy guidelines and procedures in the preparation of the annual budget, including the budget preparation calendar for any given year. The issuance of a budget call signals the beginning of the budget preparation phase; 4. Civil Society Organizations (CSOs) - include non-government organizations (NGOs), cause-oriented groups, people's organizations, cooperatives, trade unions, professional associations, faith-based organizations, media groups, indigenous peoples movements, foundations, and other citizen groups formed primarily for social and economic development, which monitor government projects, engage in policy discussions, and actively participate in collaborative activities with Government; 5. Conflict of Interest - refers to a condition which occurs when a CSO or any of its key officers are involved in multiple interests that prevent an impartial or unbiased attitude towards their participation in the national budget process; 6. Constructive Engagement - refers to a partnership between Government and counterpart CSOs marked by sustained dialogue towards problem solving while respecting and retaining the focus on assertion for reforms; 7. Government-Owned or Controlled Corporation (GOCC) - refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government of the Republic of the Philippines directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least a majority of its outstanding capital stock; 8. National Government Agency (NGA) - refers to a unit of the National Government, including the Judiciary, both Houses of Congress, and Constitutional Offices; and

9. Participatory Mechanisms - refer to the means by which CSOs can participate meaningfully and effectively in the government process of formulating and authorizing an annual national budget that is responsive to the needs of the different sectors in our society.

Sec. 4. Coverage. - This Act shall apply to all NGAs and GOCCs whose budget

6 is included in the Annual General Appropriations Act.

Sec. 5. Accreditation. - The application for accreditation for the Senate, the

House of Representatives, the Judiciary, and the Constitutional Offices shall be filed 9 at the Office of the Secretary, the Secretary-General, the Supreme Court Clerk of 10 Court, and the Office of the Chairman, respectively. Each office shall prescribe its own application form, which shall conform to the eligibility criteria provided under this Act and incorporate the minimum required information prescribed by the Department of Budget and Management (DBM). The DBM-prescribed standards shall be adopted by all NGAs and GOCCs to ensure uniformity and consistency in the accreditation process. Each office shall make the prescribed application form publicly available, including through their official websites. For all other NGAs and GOCCs, the application for accreditation may be filed at their respective regional or central offices. The completed application shall be submitted together with the following supporting documents: 1. Articles of Incorporation and By-Laws of the applicant CSO; 2. Certificate of Registration and/or other such similar documents, issued by an appropriate government agency tasked to register civil society organizations, such as, but not limited to, the Securities and Exchange Commission, Bureau of Labor Relations, Department of Human Settlements and Urban Development, Insurance Commission, and the Cooperative Development Authority. 3. The list of officers, directors, trustees, and members; 4. Duly audited financial statements for the past three (3) years showing the assets and liabilities of the organization; 5. Full disclosure of the sources of fund, including grants and donations from foreign or domestic entities; and

6. Full disclosure of service contracts with other NGAs, CSO, GOCC, private corporations, other CSOs, and other engagements which may result in conflict of interest. These disclosures shall be submitted under oath and made publicly available 5 through the websites of the concerned NGA or GOCC, subject to existing laws on data privacy and confidentiality. Upon approval of the application, the head of the concerned NGA or GOCC shall issue the certificate of accreditation. This shall be valid for three (3) years following its issuance, except for the certificate of accreditation issued by the Senate and the 10 House of Representatives, which shall be valid for the entire term of the Congress under which such certificate of accreditation was issued. No application shall be denied without due notice and hearing. The decision of the head of the concerned NGA or GOCC shall be rendered within twenty (20) working days from the time of the filing of the application. Failure to act upon the application within the prescribed period shall constitute automatic approval of the application for accreditation of the concerned CSO, and the issuance of a certificate of accreditation shall necessarily ensue.

Sec. 6. Eligibility Criteria. - To be accredited under this Act, a CSO must:

1. Have at least three (3) years of demonstrated experience in civic engagement, public accountability, or development work; 2. Have no record of administrative or criminal liability involving fraud, misrepresentation, or misuse of public funds; 3. Be independent from any political party or government official; 4. Have an identifiable sectoral, geographic, or thematic constituency; 5. Be able to demonstrate capacity to engage in budget analysis and advocacy, including through existing projects, networks, or trained personnel.

Sec. 7. CSO Participation. - In the interest of transparency, CSO participation

29 shall be a component in the preparation and authorization of the annual national budget. All NGAs and GOCCs shall be required to formulate and adopt guidelines outlining the mechanism for the accreditation and active participation of the CSOs in 32 the preparation and authorization of the annual national budget.

1 The DBM shall ensure that the NGA or GOCC has complied with the above-mentioned 2 requirement. Accredited CSOs, through their duly authorized representatives, shall be 4 allowed to participate as resource persons in the budget hearings to be conducted by the appropriate Committees of each House of Congress, provided that they comply 6 with the guidelines to be issued by both Houses of Congress. Notwithstanding their participation in the budget hearings to be conducted by the appropriate Committees of each House of Congress as provided in the preceding paragraph, the Committee on Appropriations of the House of Representatives and the Committee on Finance of the Senate shall schedule one hearing day for the presentation of the positions of accredited CSOs on the budget.

Sec. 8. Privileges and Incentives. - An accredited CSO shall enjoy the following

privileges and incentives: 1. To have similar participation rights accorded to NGOs in the Local Development Councils pursuant to the provisions of RA No. 7160 otherwise known as the "Local Government Code of 1991", in setting the direction of economic and social development, coordinating development efforts within its territorial jurisdiction; 2. To receive notices and participate as resource person through its duly authorized representatives in any regular and consultative public meetings, hearings, conferences, and dialogues on matters related to the preparation and authorization of the annual national budget; 3. To observe at the budget deliberations and at the bicameral conference; 4. Access to copies of the budget proposals submitted by the NGAs or GOCCs to the DBM; 5. To provide position papers to the DBM on the budget proposal of NGAS or GOCCs submitted pursuant to the budget call; 6. To submit its own alternative or proposed budget or position paper; 7. Access to issuances such as, but not limited to, policy orders, circulars and memoranda that are related to the budget;

8. Access to the documents prepared by the DBM for submission to Congress by the President as a basis for the General Appropriations Bill required under Article VII, Section 22 of the Constitution; 9. To present written proposals on projects and activities of the government entities whose budget is under deliberation; and 10. Immediate access to stenographic notes and committee reports released by both Houses, including the bicameral conference committee report. The bicameral conference committee meetings and all other meetings related or associated thereto shall be recorded and be made accessible immediately to promote transparency and to allow members of both Houses to easily determine how conflicting provisions in the proposed national budget were reconciled or resolved prior to the submission thereof for ratification by both Houses of Congress.

Sec. 9. Sectoral Representation. - To ensure inclusive and balanced

participation, the accreditation and engagement of CSOs under this Act shall reflect 16 sectoral diversity. At least thirty percent (30%) of accredited CSOs participating in the budget process at any level shall represent marginalized, disadvantaged, or underrepresented sectors, including but not limited to women, Indigenous Peoples, workers, youth, senior citizens, persons with disabilities, environmental groups, and consumer organizations. The DBM, in coordination with relevant oversight agencies and CSO networks, shall issue guidelines to operationalize sectoral representation and verify constituency legitimacy.

Sec. 10. Alignment with Performance-Based Budgeting. - To promote

transparency, accountability, and results-driven governance, the participation of CSOs under this Act shall be integrated into the framework of performance-based budgeting as implemented by the DBM. In line with this, all NGAs and GOCCs shall publicly disclose their performance ratings, including accomplishments measured against their Key Performance Indicators (KPIs), targets, and outcome indicators. These disclosures shall form part of the budget documents accessible to CSOs and the public.

Accredited CSOs may examine, assess, and provide recommendations on the 2 alignment of agency performance with proposed budgets.

Sec. 11. Notice to CSOs. - Notice to CSOs may be sent through electronic mail,

4 facsimile machine, postal mail, and by posting at the website of the NGA or GOCC 5 concerned. Any of the said modes of sending notices shall be deemed compliance to 6 the requirements under Section 7(a) of this Act.

Sec. 12. Conflict of Interest. - It is the responsibility of the CSO to inform the

8 NGA or GOCC of a conflict of interest in their work with the concerned agency, if and when such a situation arises. 10 However, if the NGA or GOCC deems that the CSO has a conflict of interest with the work of such NGA or GOCC, the latter shall allow the applicant-CSO to explain and prove that the conflict of interest does not exist.

Sec. 13. Cancellation of Accreditation. - Upon receipt of a verified complaint in

writing, which charges the holder of a certificate of accreditation of having procured 15 their certificate of accreditation by fraud or deceit, the head of the NGA or GOCC shall 16 notify and serve a copy of the complaint to the CSO concerned, who shall be given an opportunity to be heard. Inaction by the NGA or GOCC on the said complaint within twenty (20) working days from the receipt of such complaint shall be deemed a dismissal of the complaint against the CSO involved.

Sec. 14. Non-Accredited CSOs. - Non-accredited CSOs may still participate in

the budget process by submitting position papers for the consideration of the NGA or 23 GOCC and by attending and observing public consultations. They may be invited to expound on their critique or proposals when said institutions deem it fit. Nothing in this Act shall be construed to deprive non-accredited CSOs of the rights, privileges, and incentives accorded to them by the Constitution, existing laws, executive orders, rules and regulations, and other issuances.

Sec. 15. Public and Timely Disclosure of Budget Documents and Other Related

Data. - For CSOs to participate in an informed manner, the NGA or GOCC shall post 30 on their websites or other public posting areas, budget documents to which CSOs shall have access, as provided for under Section 7 of this Act.

Nothing in this Act shall be construed to delay or impair compliance with the 2 timeline and procedural requirements for the enactment of the General Appropriations 3 Act.

Sec. 16. Ethics and Accountability Framework. - The DBM shall prescribe the

5 standard application form, minimum required information, and accompanying ethics 6 and accountability requirements for CSO accreditation under this Act. As part of these requirements, the DBM shall develop, in consultation with CSO networks, a Code of Conduct for participating CSOs and establish a Grievance Redress Mechanism to address violations, abuse of participation, or ethical misconduct. Accredited CSOs shall commit to the Code of Conduct as a condition of participation. Breaches may result in suspension, revocation of accreditation, or blacklisting, subject to due process.

Sec. 17. Penalties and Blacklisting. - Any CSO found to have secured

accreditation through fraud, misrepresentation, or concealment of material information, or to be acting as a front or proxy for any political actor, government 16 official, or government contractor or supplier, shall be subject to the following penalties: 1. Immediate revocation of accreditation and disqualification from participation in the national budget process for a period of five (5) years; 2. Inclusion in a national blacklist and red-flag database, to be maintained by the DBM, in coordination with relevant accrediting agencies and oversight bodies; 3. Referral for investigation to appropriate authorities if there is evidence of violation of anti-graft, procurement, or other applicable laws. The following acts shall be grounds for blacklisting or red-flagging: a. Acting as a dummy or proxy organization for a government official, elected representative, political party, public utility, or business entity engaged in procurement contracts, joint ventures, franchises, among other privileges with the national government; b. Engaging in undue lobbying or influence-peddling for the benefit of a public official or agency;

c. Receiving or funneling funds from government agencies, suppliers, or contractors that compromise the independence of the CSO; d. Failure to disclose relationships, contracts, or funding sources that present a conflict of interest. CSOs included in the blacklist may file a verified petition for delisting, subject 6 to rules and evaluation procedures to be issued by the DBM.

Sec. 18. Separability Clause. - If any provision of this Act shall be declared

8 invalid or unconstitutional, the remaining part or provisions not otherwise affected 9 shall remain in force.

Sec. 19. Repealing Clause. - Any law, decree, ordinance, administrative circulars

not consistent with any provision of this Act is hereby amended, repealed, or modified accordingly.

Sec. 20. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,