Question & AnswerQ&A (EXECUTIVE ORDER NO. 518)
Executive Order No. 518 is officially titled "Government Corporate Budget Executive Order of 1978."
The declared policy is that the budgets of all government components, including government-owned or controlled corporations, shall be supportive of national objectives and development plans, and must be consistent with national government agencies' budgets, following budget, organization, and compensation policies applicable to government agencies.
They are corporations created by law as state agencies for limited purposes, either wholly owned by the state or where the Government is the majority stockholder, performing proprietary functions, and governed by a board, including financial institutions but excluding state universities and colleges.
The operating budget consists of estimates of revenues, expenditure (both current operating and capital), and borrowings, which must be prepared prior to the fiscal year and approved following procedures determined by the President or Prime Minister.
They must include a projected Balance Sheet, Profit and Loss Statement, Cash Flow Statement, underlying assumptions, and for financial institutions, a projected sources and uses of funds statement for the budget year, an estimated statement for the current year, and actual statement for the preceding year with comparative data.
The fiscal year begins on January 1st and ends on December 31st of each calendar year.
Changes can only be made with the approval of the President or Prime Minister, subject to the budget flexibility provisions allowing automatic adjustments or delegated authority within specified limits.
Positions may only be created or reclassified, and reorganizations carried out if approved by the Governing Board, within approved budget levels, and must comply with position classification and compensation laws.
Yes, but only if their operating revenues net of expenses are sufficient to cover these donations and contributions and must be within the limitations of their approved budget.
Each corporation must declare at least five percent of its net earnings as cash dividends, with certain exceptions for specific corporations like the Government Service Insurance System and those with profit distribution governed by special laws.
They must submit an annual report on financial performance comparing actual results with the approved budget, explanations of work and financial results, solvency, liquidity, profitability, and capital project status, to be submitted to the Ministry of the Budget and the Batasang Pambansa by June 30 following the fiscal year.
They must be in accordance with P.D. No. 985 and other relevant compensation laws, with fringe benefits and allowances subject to guidelines approved by the President or Prime Minister.
It is the allowance for corporations to adjust their budget allocations automatically or through approved processes in response to changes in revenue, costs, or economic conditions, including the option for the President/Prime Minister to delegate reallocation authority to the Governing Board.