Respecting the national budget

August marks the beginning of the marathon congressional deliberations on the national budget. For 2026, the Marcos administration has set the national budget at P6.79 trillion, a 7.4-percent increase from this year’s P6.33 trillion budget. This is also equivalent to 22 percent of the country’s economy.

Because of its magnitude and far-reaching impact on the direction of the economy and future of its people, the national budget is the most vital piece of legislation that Congress passes every year. The budget must, therefore, be carefully designed to maximize the use of our limited resources and to prioritize programs and projects that address the urgent needs of Filipinos.

Last year, crafting the 2025 budget was a disappointing exercise in fiscal recklessness. For example:

• A portion of funds for the Pantawid Pamilyang Pilipino Program and counterpart funds for foreign-assisted projects were transferred from programmed appropriations to unprogrammed appropriations (UAs). This meant a delay in implementation since items lodged under UAs do not have a definite source of funding.

• The budget of the Department of Public Works and Highways was raised to P1.08 trillion, despite being one of the agencies with the weakest capacity to utilize its budget. The DPWH budget was even larger than the combined P909 billion budget of the Department of Education and state universities and colleges.

Then there’s the perennial problem of corruption, particularly in flood control projects under the DPWH. The President even acknowledged the gravity of the situation during his fourth State of the Nation Address. According to Sen. Panfilo Lacson, only 40 percent of allotted funds for flood control projects are actually left for implementation, after deductions for kickbacks and commissions.

The misalignment in priority expenditures and corruption in public projects undermines not only the government’s fiscal consolidation program, but also the Philippine Development Plan. Resources that should have been invested in productive sectors, such as agriculture, early childhood healthcare and education, and mass transport infrastructure, are being lost.

Currently, the projected P5.0 trillion in revenue collection for 2026 is not enough to finance the proposed expenditure program. To augment the shortfall in revenues, more than P2.6 trillion will be raised from domestic and external borrowings. This will push the national government’s total outstanding debt to P19 trillion by end-2026, equivalent to 61.8 percent of the economy. In the original Medium Term Fiscal Framework, the NG debt-to-GDP ratio should have already gone down to below the 60 percent threshold this year.

Accordingly, we reiterate our recommendations as follows:

1. Strengthen executive-legislative coordination. The President should convene and preside over the Legislative-Executive Development Advisory Council at least once a month. This is a critical time for the President to remind legislators to stick as much as possible to the projects included in the list of programmed appropriations as proposed by the executive department.

Likewise, the P250 billion for UAs, representing 3.7 percent of the budget in 2026, should remain as it is. While Congress has the prerogative to make adjustments, UAs should have a ceiling of not more than 5 percent of the total budget.

2. Enhance transparency and accountability in the budget process. The resolutions adopted by the House and Senate to open the budget process are steps in the right direction. Aside from opening the bicameral conference committee via livestreaming and accreditation of third-party observers, they also mandate the publication of budget documents, transcripts, and a comprehensive, detailed matrix of budget changes on the Congress’ website. To further boost transparency, we support the call that all proposed individual amendments to the budget must be tracked and discussed in public, not during closed-door sessions.

3. Strictly monitor public spending. The joint congressional oversight committee on public expenditures and the Department of Budget and Management should be more proactive in monitoring the fund utilization of agencies and government corporations. The President should also continue his provincial visits to track the progress of major government projects.

4. Widen citizen participation in the procurement process and auditing of government projects. The Government Procurement Policy Board’s procurement observation portal and the Commission on Audit’s citizen participatory audit program should be expanded to cover critical projects at the national and local levels. The government must establish clear guidelines to encourage more civil society organizations to participate. The New Government Procurement Reform Act is a welcome development.

Ultimately, the national budget is the people’s budget. Our policymakers must treat it with utmost respect and prudence since it is funded by the people and for the people. To respect the national budget means allowing more transparency and citizen participation in its legislation and execution. This will ensure that the people’s more urgent needs are addressed by the national budget.

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Gary B. Teves had served as finance secretary under the Arroyo administration.