DBM Budgeting and Management Reforms EO

The issuance is made by the President pursuant to the Constitution and existing laws.
Executive Order No. 87 rests on Republic Act No. 3526, which authorizes the reversion of unliquidated accounts payable outstanding for two years or more.
It also invokes Presidential Decree No. 1445 (1978), the Government Auditing Code of the Philippines.
The order is designed to ensure transparent, accountable, and realistic disbursement and annual expenditure planning by reexamining prior-year accounts payable.

Executive Order No. 87 requires prior-year accounts payable to be reexamined and kept at manageable levels.
It mandates that the actual cash requirements for prior-year accounts payable be ascertained.
It aims to prevent the immobilization of public funds caused by prior-year accounts payable recorded in agency books.
It seeks to improve the determination of the national government’s actual financial condition and effective resource planning and allocation.

The order provides operative rules for two categories of accounts payable: documented and undocumented (or not covered by perfected contracts on record).
Section 1 governs documented accounts payable, with automatic reversion triggered by the two-year outstanding period and absence of filed claims.
Section 2 governs undocumented accounts payable or those not covered by perfected contracts on record, regardless of when incurred.
Section 3 addresses what happens after reverted accounts payable are validated by competent authorities or final and executory decisions.

Section 5 applies to all accounts payable of all National Government Agencies.
The order exempts trust or fiduciary funds, as long as the purposes for their creation have not been accomplished.
The order exempts accounts payable corresponding to foreign-assisted projects for the duration of the said projects.
Section 1 applies to documented accounts payable for fiscal year 2016 and years prior thereto.
Section 2 applies to undocumented accounts payable regardless of the year in which they were incurred.

Section 1 requires that all documented accounts payable for fiscal year 2016 and years prior thereto be reverted to the Accumulated Surplus or Deficit of the General Fund, or the Cumulative Result of Operations of the National Government.
Section 1 mandates automatic reversion for all documented accounts payable that remain outstanding for at least two years, where no actual administrative or judicial claim has been filed.
Section 2 mandates that all undocumented accounts payable or those not covered by perfected contracts on record, regardless of year incurred, automatically be reverted.
Section 2 prohibits the recording of undocumented accounts payable in the books of accounts of agencies.

Section 3 requires that if reverted accounts payable are subsequently validated by competent authorities or by final and executory decisions, the funding for them must be determined by the Department of Budget and Management (DBM).
Section 3 directs that DBM funding determination shall be made subject to the applicable laws, rules, and regulations.
Section 3 frames reversion as not extinguishing the possibility of later validation, but it requires lawful funding determination after validation.

Section 4 states that nothing in the order authorizes reviving or validating claims already barred by prescription.
Section 4 also states that nothing authorizes reviving or validating claims already disallowed by final judicial or administrative determination.

Section 6 provides that failure to comply with the order is a ground for appropriate sanctions and/or administrative action against responsible government officials and employees.
Section 6 ties the sanctions and administrative action to what is warranted under the circumstances.

Section 7 requires the DBM, in consultation and/or coordination with the Commission on Audit, to prepare the rules and regulations to implement the order.
Section 8 provides immediate effect, so implementation and compliance are effective upon issuance as directed by the order.

The executive order does not provide for a separability clause, repeal clause, or sunset provision within its operative sections.