REVENUE MEMORANDUM CIRCULAR NO. 35-2009 issued on June 29, 2009 publishes the full text of National Budget Circular (NBC) No. 519 dated March 27, 2009 issued by the Secretary of the Department of Budget and Management (DBM) entitled “Guidelines on the Release of Funds for FY 2009”.
      The effectivity date of the FY 2009 General Appropriations Act (GAA) under Republic Act (RA) No. 9524 is April 1, 2009. Thus, all unutilized allotments of agencies as of March 31, 2009 out of the Special Allotment Release Orders (SAROs) issued chargeable against the FY 2008 GAA (R.A. No. 9498 as reenacted) shall no longer be available for obligation.
Consistent with the Fiscal Program set for FY 2009, allotment releases during the year from all sources shall be within the FY 2009 Allotment Release Program (ARP). The ARP of each department/agency shall be an amount equal to the level of the department/agency budget under the FY 2009 GAA or the National Expenditure Program (NEP), whichever is lower, to wit:

1. 1. 1. 1. New GAA; and,
         2. Automatic appropriations e. Retirement and Life Insurance Premiums (RLIP), which shall be computed at 12% of the itemized salaries except for agencies which are not covered by the Government Service Insurance System (GSIS) Retirement Law and Special Accounts in the General Fund (SAGF), among others.

      The following shall likewise be charged against the agency ARP and shall not be considered as an “add-on”:

1. 1. 1. 1. Obligations of the agency during the following periods:
            
            1. Overdraft in obligations from January 2 to March 31, 2009 charged against R.A. No. 9498 as reenacted pursuant to Circular Letter (CL) Nos. 2009-1, 2009-3 and 2009-5;
            2. Obligations from January 2 to March 31, 2009 charged against SAROs issued under R.A. No. 9498, as reenacted pursuant to CL No. 2009-2; and
            3. Obligations to be incurred by agencies starting April 1, 2009, as authorized in

            the Circular.

         2. Releases from the Continuing Appropriations, A. No. 9498; and
         3. Releases from the Unprogrammed Fund under A. No. 9524.

      Departments/agencies with budgetary support for expenditure items not provided in their regular budget may avail of additional budgetary provisions from the multi-user Special Purpose Funds (SPFs) such as Calamity Fund, Contingent Fund, E-Government Fund, International Commitments Fund, Miscellaneous Personnel Benefits Fund (MPBF), National Unification Fund, Priority Development Assistance Fund and Pension and Gratuity Fund (PGF). Releases from these SPFs are considered over and above the department/agency ARP.
      The obligational authorities for agencies to enter into commitments or incur obligations during the year shall be issued comprehensively thru the Agency Budget Matrix (ABM) and thru issuance of SAROs. On the other hand, the disbursement authorities for agencies to pay the goods/services delivered and projects completed shall be thru issuance of Notice of Cash Allocation (NCA), Non-Cash Availment Authority (NCAA) and Cash Disbursement Ceiling (CDC).
Upon effectivity of the FY 2009 GAA and pending approval of the ABM, departments/agencies are authorize d to incur obligations which shall be charged against the amount to be comprehensively released through the ABM.
      In the Agency Performance Review (APR), departments/agencies are required to prepare and submit to DBM the Budget Execution Documents (BEDs) containing the financial and physical plans/targets and Budget Accountability Reports (BARs) containing their accomplishments for FY 2009, prescribed under NBC Nos. 507 and 507-A.
The results of the APR will be used as basis for deciding the necessity of any of the following:

1. 1. 1. 1. Release of the balance of the “For Later Release” under Not Needing Clearance portion of the approved ABM;
         2. Additional release from SPFs;
         3. Withdrawal of released allotment;
         4. Approval of requests for realignment; or
         5. Revision of plans/targets as reflected in their submitted

      In the release of additional funds, the “no report, no release” policy (as it applies to the submission of BEDs and BARs) shall be strictly enforced.
Agencies are authorized the following flexibilities under certain provisions of the FY 2009 GAA (R.A. No. 9524):

1. 1. 1. 1. Use of Savings under Agency Specific Budget
            
            1. Augmentation of any item of expenditure within Maintenance and Other Operating Expenses (MOOE) without prior approval of the DBM with the exception of confidential and intelligence fund, in accordance with General Provision (GP) No. 61 of R.A. No. 9524.
            2. Payment of any deficiency in the actual requirements for compensation, Year – End Benefits, Retirement Gratuity and Terminal Leave (RG/TL), pensions and other personnel benefits which shall be given priority in the use of savings as defined under GP No. 60 of R.A. No. 9524. In no case, however, can any excess provision or release for RLIP be considered as savings of the agency.
            3. Payment of honoraria in accordance with GP No. 46 of R.A. No. 9524, Budget Circular Nos. 2003-5, 2007-1 and 2, National Budget Circular No. 2007-510 and other guidelines that may be issued by DBM.
            4. Payment of Collective Negotiation Agreement benefits if these resulted in
               improved systems and efficiencies and thus enabled agencies to meet and deliver their required plans/targets as reflected in their BEDs.
         2. Use of Fees and Excess Income
            
            1. Use of fees collected from seminars, trainings and conferences for the purpose of conducting said activities, in accordance with GP No. 9 of R.A. No. 9524.
            2. Use of proceeds from sale of official publications for the purpose of defraying the cost of preparing, printing and disseminating such publications provided that the agency was not provided any amount or had insufficient funds programmed under their regular budget for the said purpose, in accordance with GP No. 10 of
               R.A. No. 9524.
            3. Use of proceeds of sale of obsolete, unnecessary equipment for the purchase of new ones and the rehabilitation of existing vital equipment, in accordance with GP No. 11 of R.A. No. 9524.
            4. Use of service fees collection from Bureau of Internal Revenue (BIR), Government Service Insurance System (GSIS), Home Development Mutual Fund (HDMF) and Philippine Health Insurance Corporation (PHIC), mutual benefits associations/cooperatives for the operation of a Provident Fund established in favor of all its employees, in accordance with GP No. 41 of R.A. No. 9524.
            5. Use of excess income realized and deposited with the Bureau of the Treasury
               pursuant to Special Provision No. 9 of the Unprogrammed Fund under R.A. No. 9524 to augment their operating requirements except Personal Services (PS). It must be emphasized, however, that agencies already authorized by law to retain all or portion of their income collections for their operating requirements are no longer qualified to avail of use of excess income.

      The Head of Agency/OU shall be held personally liable for any payment of expenditures not in accordance with the provisions of the Circular.