If you are part of a government agency planning a procurement, a contractor or supplier preparing a bid, or a citizen trying to understand how public projects get funded, you may have encountered situations where a single procurement draws money from both the current year’s appropriations and continuing appropriations carried over from previous years. This is a common and legally recognized practice in Philippine government procurement. It allows agencies to complete projects efficiently, avoid wasting available funds, and maintain continuity—especially for infrastructure, equipment, or multi-year activities. This article explains exactly how it works under current law, the rules you must follow, practical steps, common challenges, and what it means for everyone involved.

What Are Current and Continuing Appropriations?

Current appropriations come from the General Appropriations Act (GAA) enacted by Congress for the present fiscal year. These funds are generally available for obligation only during that year (subject to specific rules on lapsing and extensions).

Continuing appropriations are authorizations that remain valid beyond the original fiscal year. They typically cover unexpended balances of capital outlays (CO) and certain maintenance and other operating expenses (MOOE) that carry over so agencies can finish ongoing projects or obligations without needing fresh annual authorization every time. Their exact availability period depends on the language in the relevant GAA and Department of Budget and Management (DBM) guidelines—often extending for a defined period or until the purpose is fulfilled.

Both types of funds must be used strictly for the purpose for which Congress or the local sanggunian authorized them. You cannot freely move money between unrelated items.

Legal Basis Under the New Government Procurement Act

The primary law is Republic Act No. 12009, the New Government Procurement Act (NGPA) of 2024, together with its Implementing Rules and Regulations (IRR) published in February 2025. RA 9184 (the old Government Procurement Reform Act) has been repealed.

Key provisions supporting the use of both funding types for a single procurement include:

The definition of Approved Budget for the Contract (ABC) explicitly covers amounts “within the authorized amount in the General Appropriations Act (GAA), continuing, and automatic appropriations, or other authorized source of funds” for national government agencies (NGAs). Similar principles apply to local government units (LGUs) via their appropriations ordinances and to government-owned and -controlled corporations (GOCCs) via their corporate budgets.
Procurement planning and budget linkage rules require that every procurement be included in an approved Annual Procurement Plan (APP) that is consistent with the agency’s duly approved budget. The APP must indicate the source of funds.
The IRR and GPPB standard bidding documents require disclosure of the source of funds in the Invitation to Bid and bidding documents. Nothing in the law prohibits listing more than one source for a single contract, provided the total ABC stays within authorized and available amounts for the specific purpose or project.
Pre-procurement conferences must confirm availability of funds. Early procurement activities (EPA) short of award are allowed in many cases even before the full GAA is enacted, facilitating use of continuing funds alongside upcoming current-year allocations.

In short, Philippine law treats the ABC as one ceiling amount for one procurement activity or contract. The money behind that ceiling can legitimately come from a combination of current and continuing appropriations when they are available for the same authorized purpose.

How Procuring Entities Properly Use Both Sources for One Procurement

Here is the typical sequence agencies follow:

The end-user unit prepares the Project Procurement Management Plan (PPMP) showing the total estimated cost and identifies which portions can be charged against available current appropriations and which against continuing appropriations for that specific program, project, or activity.
The Bids and Awards Committee (BAC) consolidates PPMPs into the APP. The Head of the Procuring Entity (HoPE) approves the APP. The APP must clearly reflect the funding sources.
Before advertising, the BAC holds a pre-procurement conference to confirm that the combined funds are (or will be) available and that all documentary requirements are ready.
Bidding documents are prepared using GPPB-prescribed forms. The ABC is stated as a single amount. The source of funds section (or a dedicated provision) indicates something like: “Current Appropriations under the FY 2026 General Appropriations Act for [specific item/project] and Continuing Appropriations from FY 2025 for the same purpose.”
The procurement proceeds through the chosen mode (usually competitive bidding). Bidders see one ABC and one set of requirements.
Award of contract occurs only after the Chief Accountant and Budget Officer issue a Certification of Availability of Funds (CAF) covering the full ABC, specifying the fund sources.
During contract implementation, the agency obligates and disburses payments according to the contract terms while charging the appropriate fund source in its accounting records (using the Unified Accounts Code Structure). The contractor has one contract and deals with one procuring entity; internal fund charging is the agency’s responsibility.

This process keeps everything transparent, auditable, and aligned with fiscal rules.

Common Scenarios Where Mixed Funding Occurs

Agencies frequently combine the two sources for practical reasons:

A multi-year infrastructure project has an unexpended balance from the previous year’s continuing appropriation plus a new allocation in the current GAA. One bidding process covers the remaining scope using the total available funds.
Equipment or goods procurement where part of the budget carried over and the agency received additional current-year funding to complete the purchase at once.
Projects that risk fund lapsing if not obligated promptly; combining allows faster implementation while respecting the original purpose of each appropriation.

These situations are especially common in agencies like the Department of Public Works and Highways (DPWH), Department of Education, and local government units handling capital projects.

Challenges, Pitfalls, and How to Handle Them

Even though mixing is allowed, problems arise when rules are not followed carefully:

Purpose misalignment — Using continuing funds for a completely new project or item not covered by the original appropriation can lead to Commission on Audit (COA) disallowances. Always tie the procurement to the same authorized program or project.
Incomplete or outdated APP/PPMP — If funding sources change after approval, update the plans promptly (the IRR requires periodic updates).
Insufficient certification of funds — Awarding without a proper CAF for the full combined amount is a serious violation. Never proceed to award on the hope that funds will arrive later.
Cash allocation delays — Even with appropriations, actual cash releases (via Notice of Cash Allocation) can lag. Contractors should factor this into their cash-flow planning; agencies should coordinate early with DBM.
Perception of contract splitting — Breaking one logical scope into artificial smaller contracts just to match different fund sources is prohibited. Keep it as one coherent procurement when that is the genuine requirement.
For LGUs and GOCCs — Rules are analogous but based on local ordinances or corporate budgets. Sanggunian approval and local budget rules add another layer.
Foreign bidders or contractors — The same funding rules apply. Eligibility, joint-venture requirements, and domestic preference (where applicable) are governed by the NGPA IRR. Foreign documents usually need apostille or authentication. Payment is normally in Philippine pesos.

Ordinary citizens and watchdogs can review the APP (often posted on agency websites or PhilGEPS) and bidding documents to see declared funding sources. This promotes transparency and helps detect irregularities early.

Key Documents, Offices Involved, and Typical Timelines

Core documents:

Approved APP and PPMP (with funding sources indicated)
Pre-procurement conference minutes and BAC resolutions
Bidding documents / Philippine Bidding Documents (PBDs) using GPPB forms
Certification of Availability of Funds (CAF)
Notice of Award, Contract, and Notice to Proceed
Post-qualification and abstract of bids

Main offices:

End-user units and BAC of the procuring entity
Agency Budget and Accounting offices (for CAF and fund tracking)
DBM (budget release and guidelines)
GPPB-TSO (policy, forms, and non-policy opinions)
COA (audit)
PhilGEPS (posting and transparency portal)

Timelines: GPPB-prescribed maximum periods apply to each stage (advertisement, bid submission, evaluation, etc.). EPA can begin as early as the National Expenditure Program stage in many cases. Continuing appropriations are often more immediately usable since they do not depend on new GAA enactment.

There are no special fees just for using mixed funding; standard procurement costs (advertising, PhilGEPS, etc.) apply.

Frequently Asked Questions

Can one government contract legally use both current and continuing appropriations?
Yes. RA 12009 and its IRR allow the ABC for a single procurement to be funded from authorized amounts in the GAA (current), continuing appropriations, automatic appropriations, or other authorized sources, as long as the total stays within approved limits for the specific purpose and proper documentation is maintained.

How do bidders know the funding comes from mixed sources?
The Invitation to Bid and the bidding documents must disclose the source of funds. Procuring entities commonly state both current and continuing appropriations explicitly when both are used.

Does combining funds change the procurement mode or requirements?
No. The mode (competitive bidding or alternative) is chosen based on the nature and value of the procurement, not the mix of funding sources. All other rules on eligibility, bidding, evaluation, and award remain the same.

What happens if continuing funds run out before the contract is fully paid?
The agency must ensure at the time of award that sufficient total funds (current + continuing) are available or will be available. If a shortfall occurs later, the agency may need to request additional authority or realign within legal limits; contractors should monitor progress billings against available cash allocations.

Is this practice limited to national government agencies?
No. LGUs can do the same using their annual or supplemental appropriations ordinances (with continuing balances where locally authorized). GOCCs follow their corporate operating budgets. The same principles of consistency with approved budgets and proper disclosure apply.

Can continuing appropriations be used for entirely new projects?
Generally no. Continuing appropriations are tied to their original authorized purpose or ongoing projects. New projects or activities usually require current appropriations unless the specific GAA or special law provides otherwise.

How does mixed funding affect payment schedules to contractors?
The contractor has one contract and submits claims according to its terms. The procuring entity handles internal accounting and charges payments to the appropriate fund source. Cash releases still depend on DBM’s overall cash program and agency allotments, so timing can vary.

Where can I verify the funding source of a particular procurement?
Check the agency’s approved APP (usually on its website or transparency seal page), the bidding documents on PhilGEPS, or the contract documents after award. Post-award notices and the agency’s financial reports (such as FAR statements) also show fund utilization.

Does RA 12009 introduce any major changes to how mixed funding is handled compared to the old law?
The core flexibility already existed under RA 9184 and continues under RA 12009. The new law strengthens transparency, updates procedures, and reinforces budget linkage and disclosure requirements, but the ability to combine authorized current and continuing sources for one ABC remains intact.

Key Takeaways

Using both current and continuing appropriations for a single government procurement is legal and common when the funds support the same authorized purpose and the total ABC stays within approved limits.
The Approved Budget for the Contract (ABC) is treated as one amount; the mix of funding sources is managed internally through proper planning and accounting.
Success depends on accurate APP and PPMP preparation, clear disclosure in bidding documents, and a valid Certification of Availability of Funds before award.
This approach helps finish projects faster, avoids wasting lapsing funds, and maintains continuity—especially valuable for infrastructure and capital projects.
Contractors and suppliers benefit from reviewing the declared funding source to assess project stability and payment timelines.
Always follow the latest GAA special provisions, DBM circulars, and GPPB issuances, as exact validity periods and release rules can vary yearly.
For specific situations, consult your agency’s BAC, budget office, or the GPPB-TSO. Official resources include the GPPB website (gppb.gov.ph), PhilGEPS, and the Official Gazette for RA 12009 and its IRR.

Understanding these rules helps everyone—government staff, bidders, and the public—ensure that public funds are used efficiently, transparently, and in accordance with law. Proper planning at the start prevents most problems later on.