‘Budget insertions’ alarm business groups anew
Over 30 business and civil society groups on Thursday demanded that Congress ensure that no budget insertions lacking technical justification should be allowed to make it into the 2027 national budget, as they seek to avoid a repeat of the “ghost” and substandard flood control projects that had tainted previous appropriations.
The groups specifically flagged more than P180 billion worth of items added to the proposed budget of the Department of Public Works and Highways (DPWH), the embattled agency at the center of the flood control corruption scandal.
In a joint statement issued on Thursday, they warned that funding questionable “insertions” at the expense of legitimate infrastructure and health programs could result in another major corruption scandal.
“The Filipino people have already paid dearly for this practice. Insertions in the 2023 to 2025 budgets were linked to ghost and substandard flood control projects that betrayed public trust, wasted scarce resources, and left communities exposed to floods,” they said. “The 2027 budget must not repeat that history.”
Among the signatories were the Philippine Chamber of Commerce and Industry, the country’s largest business association, Makati Business Club, Management Association of the Philippines and Federation of Philippine Industries (FPI).
Civil society organizations, including Foundation for Economic Freedom, Parish Pastoral Council for Responsible Voting and Judicial Reform Initiative, also signed the statement.
Citing analyses by budget watchdogs, the groups flagged the House General Appropriations Bill (HGAB). They said the HGAB inflated the DPWH budget to accommodate at least 6,000 additional projects, bringing the total to more than 16,000.
They questioned the basis for many of these projects, which they said “appear as lump sums for multipurpose buildings and access and bypass roads, without published project lists or named proponents.”
The groups also lamented cuts to other programs to make room for the DPWH insertions. These included about P130 billion for foreign-assisted projects, P9.5 billion for calamity funds, P1.76 billion for the Edsa Busway and P4.9 billion for health programs.
Five demands
They presented five specific demands:
1. Remove every insertion lacking any technical basis. A budget item stays only if backed by a feasibility study or detailed engineering design, is consistent with the implementing agency’s master plans, and validated as ready for implementation in 2027.
2. Restore the funds taken from foreign-assisted projects, calamity funds, Edsa Busway and health programs to the amounts proposed in the National Expenditure Program (NEP).
3. Remove special provisions that allow agencies to modify or replace projects after enactment to avoid turning the budget into a “blank check.”
4. Publish every amendment in full—the specific project, its location, amount, source of funds, justification, and the legislator who proposed it—before the Senate votes on second reading and before the bicameral conference begins.
5. Admit no new items at the bicameral conference committee, which must reconcile only what the House and the Senate had each approved. These items must contain no blank or lump-sum entries. The bicameral deliberations must be fully livestreamed.
Win: ‘We agree’
Responding to the groups’ appeal, Senate President Sherwin Gatchalian said that while fiscal space remains tight, the chamber was already looking into restoring the funding for foreign-assisted projects and the Edsa Busway.
“We agree. Infrastructure is important, especially transportation,” Gatchalian told reporters on the sidelines of a business summit organized by the FPI on Thursday.
The Senate President also assured the public that any changes to the budget, particularly during the bicameral conference committee deliberations, would be transparent.
Gatchalian emphasized that Congress was working to avoid a reenacted budget given the country’s slow economic growth rate of 2 percent.
“So, if we reenact, we won’t have new infrastructure … and if you don’t have new infrastructure, you don’t have a driver for growth,” he said.
The business and civil society groups also reject a reenacted budget, saying that “a clean budget and a timely budget are not in conflict.”
“A budget free of politically driven insertions will strengthen investor confidence, protect the country’s fiscal space, and ensure that every peso builds the infrastructure, schools, and health services the nation truly needs,” they said.
All about ‘survival’
Former Budget Secretary Florencio “Butch” Abad said it was possible to remove budget insertions since the senators were still deliberating on the General Appropriations Bill.
“But the real question is: will the House agree. Probably not. This is about political survival,” he said in an exchange of messages with the Inquirer on Thursday.
The insertions are not “administrative, technical nor legal” issues. “It is political,” Abad said.
He said they feared that “the Dutertes will go after them” in the 2028 elections if they do not “take care” of themselves ahead of the polls.
In May this year, the House overwhelmingly voted to impeach Vice President Sara Duterte.
“The administration is not sending the right message with (the President’s son, Ilocos Norte) Rep. (Alexander) Sandro (Marcos) getting the biggest allocation in the infrastructure projects,” he said.
“The failure of the administration to prosecute those who plundered the budget and its refusal to pursue substantive fiscal reforms is pushing confidence and trust in the government at low levels. That is the fundamental problem,” Abad said.
The thousands of insertions have raised fresh concerns that public works funds were being used to reward political allies and punish districts outside the leadership’s circle.
“This shows that the pork barrel system as a carrot-and-stick is very much alive and kicking,” ACT Teachers Rep. Antonio Tinio said in a statement over two weeks earlier.
The People’s Budget Coalition (PBC) found that public works funding appeared to have shifted from the DPWH central office to district engineering offices.
The central office lost P42 billion, while 158 district engineering offices gained a combined P54 billion, according to the watchdog. The biggest local offices collectively received an additional P24.9 billion, while middle-ranking offices gained an average of P151 million.
Lowest-funded offices
At the other end of the scale, the 10 lowest-funded engineering offices received less than P150 million each, according to Tinio’s data.
“The gap between the favored and the forsaken districts is widest at the extremes,” Tinio said.
Several red flags were raised last week by PBC in the proposed budget for 2027 of the Department of Agriculture (DA), particularly in infrastructure projects like farm-to-market roads (FMRs) with dubious locations that included the Benham Rise in the Pacific Ocean and the Celebes Sea near Brunei and Indonesia, per their geographic coordinates.
The group said 355 FMR projects worth P6 billion inserted by the House were not in the NEP or in the proposed DA budget.
DA spokesperson Assistant Secretary Arnel de Mesa said the questionable locations of proposed FMRs were the result of “human errors” in encoding.
On Monday this week, PBC told the Senate that over P1 trillion of the allocations in the 2027 national budget were red flags or suspected “pork.”
PBC coconvener Adolfo Jose Montesa said the House worsened the “soft pork” by increasing the proposed budget for “ayuda,” or aid, programs from P72 billion in the NEP to P137 billion in the HGAB. —WITH REPORTS FROM YASMIN LEE ARPON AND INQUIRER RESEARCH
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