Budget Circular No. 2026-1

For GOCCs, which by the nature of their functions consistently incur losses, the current year's operating loss should have been minimized or reduced compared to or at most equal to that of the prior year's level; Actual operating expenses as of September 30, 2026 are less than the DBM-approved level of operating expenses in the COB so as to generate sufficient source of funds for the payment of CNA Incentive; and For income generating GOCCs required to remit earnings, an amount equivalent to at least fifty percent (50%) of the annual earnings of the immediately preceding year should have been remitted to the National Treasury in accordance with Section 3 of RA No. 765614 dated November 9, 1993. 4.3.6 For L WDs The CNA Incentive shall be sourced solely from the allowable MOOE allotments in FY 2026, as enumerated in Item 4.3.1, under their Board of Directors-approved COBs, subject to the provision of Item 4.1.2(c) hereof. 4.3.7 For LGUs The CNA Incentive shall be sourced solely from the allowable MOOE allotments in FY 2026, as enumerated in Item 4.3.1, under their respective approved LGU budgets. 4.4 Payment of the CNA Incentive 4.4.1 The FY 2026 CNA Incentive is a one-time benefit which shall be paid not earlier than December 15, 2026 but not later than December 31, 2026. 4.4.2 It cannot be given immediately upon signing and ratification of the CNA as this will transform the CNA Incentive into a CNA Signing Bonus which the Supreme Court, in the case of Social Security System v. COA15, has prohibited for not being a truly reasonable compensation. 4.4.3 The CNA Incentive for the year shall be granted within the current year and charged against the available allowable MOOE allotments from the current year's appropriations. An Act Requiring Government-Owned or —Controlled Corporations to Declare Dividends under Certain Conditions to the National Government, and for Other Purposes 384 SCRA 548 Page 8 of 21