Manila: The Philippine Supreme Court ruled that Congress exceeded its constitutional power when it added ₱449.5 billion ($7.12 billion) to the 2024 national budget’s unprogrammed appropriations, raising total spending above the amount President Marcos proposed.
Unprogrammed funds are standby allocations under the General Appropriations Act (GAA) released only if revenue or financing becomes available.
The Court said such funds are not inherently unconstitutional, but Congress must "set clear limits, priorities and safeguards" to prevent unchecked executive spending.
It also struck down a ₱17.99-billion increase in the 2025 Special Road Fund and certain 2026 budget provisions.
The ruling was dated Oct. 7 and published Oct. 20, 2026.
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The basics
Under the Constitution, the President proposes the national budget, and Congress may cut it or move money around but can’t raise the total.
In 2024, lawmakers in the bicameral conference committee moved programs and projects from the regular (programmed) budget into the “unprogrammed” column, creating extra room for other spending.
The Court found this effectively increased total appropriations by ₱449.5 billion.
Unprogrammed appropriations are "standby funds", released only if extra revenue or foreign loans come in.
The Court said they are not unconstitutional in themselves, but need clear limits and safeguards.
'Never been a catalogue of licences to abuse or steal'
Associate Justice Marvic Leonen wrote that the GAA (the national budget), must serve to honour the sacrifice of the people whose money is collected by the government.
“Every peso collected in taxes and fees represents labor rendered, needs deferred, perseverance, and sacrifice endured by our people. The General Appropriations Act must honor that sacrifice,” Leonen wrote in the Supreme Court’s decision which declared the 2024 and 2025 budgets as unconstitutional.
The high court gave notice to the items pertaining to unprogrammed appropriations which become “constitutionally infirm when they lack sufficient standards.”
What exactly was struck down
The 2024 budget law (RA 11975), because of the ₱449.5 billion increase.
The 2025 budget law (RA 12116), because Congress added ₱17.99 billion ($284.9 million ) to the DPWH’s "Special Road Fund", pushing total appropriations beyond the President’s recommendation.
Specific unprogrammed-fund provisions in the 2026 budget (Special Provisions 1(a) and (b), Chapter XLIII).
The SAGIP allocations in the 2024 and 2025 budgets, which the Court called "prohibited lump-sum appropriations".
Your draft says the Court voided the increases. More precisely, it declared the budget laws themselves unconstitutional because of those increases.
‘NEVER BEEN A CATALOGUE OF LICENSES TO ABUSE OR TO STEAL’
— Philstar.com (@PhilstarNews) October 21, 2026
Associate Justice Marvic Leonen wrote that the General Appropriations Act, which represents the national budget, must serve to honor the sacrifice of the people whose money is collected by the government.
“Every peso… pic.twitter.com/JiPL9OWUer
Background
Opposition lawmakers brought the case.
The petitioners included the late Rep. Edcel Lagman, ex-Rep. Gabriel Bordado Jr., and former senator Koko Pimentel.
Pimentel had argued the extra money pushed the budget to ₱6.498 trillion ($102.9 billion), above the ₱5.768 trillion the President proposed. The Budget Department defended the funds, saying they’re standby funds outside the national budget.
What it means
It sets a firm limit on Congress.
Under the "doctrine of operative fact", spending already done under the 2024 and 2025 laws is recognised, so the government isn’t being ordered to claw back money.
Whether anyone is accountable for the insertions is not addressed.
In its media statement published on its X account on Tuesday, the apex court stated: "The Supreme Court partially granted the petition of Edgar R. Erice and Leila M. De Lima (G.R. No. E-04036), which questioned the constitutionality of Chapter XLIII of the 2026 GAA that allows the allocation of unprogrammed appropriations.
"According to the Supreme Court, unprogrammed appropriations are not automatically unconstitutional. However, they must have clear limitations and safeguards to ensure proper management of government finances, transparency in public expenditures, and accountability in the use of funds.
"They become unconstitutional when there are no sufficient standards for the use of funds and they become a means for the Executive to have nearly unlimited spending power.
"This can weaken government financial discipline and affect the funding of projects already set to be funded if the expected government revenues are not achieved.
"The Court also stated that the limitation on the total funds that the government may allocate, in accordance with Article VI, Section 25(1) of the Constitution, covers the combined amount of programmed and unprogrammed appropriations.
It emphasized that for unprogrammed appropriations to be constitutional, they must meet the following conditions:
"a. At no time should there be lump-sum appropriations under Unprogrammed Appropriations
b. As part of Congress's power to exercise legislative discretion, and because spending to address budget shortfalls is distinct from spending through unprogrammed appropriations, the conditions governing the use of new revenues, as well as additional government revenues from non-tax sources, for programmed and unprogrammed expenditures must be clearly distinguished. Congress shall be presumed to allocate these new funds to programmed expenditures, unless there are clear and compelling reasons, such as projects with assistance from other countries, to include them in Unprogrammed Appropriations
c. Congress must set sufficient standards on spending priorities when there is more than one purpose under Unprogrammed Appropriations
d. The provision must be within the national financial program established in the budget and consistent with its character as a narrow contingent allocation The Supreme Court permanently prohibited the Senate, House of Representatives, Office of the Executive Secretary, and Acting Secretary of the Department of Budget and Management from implementing Special Provision 1(a) and (b), Chapter XLIII of the General Appropriations Act (GAA) for 2026."
Key points
The Supreme Court permanently prohibited the Senate, House of Representatives, Office of the Executive Secretary, and Acting Secretary of the Department of Budget and Management from implementing Special Provision 1(a) and (b), Chapter XLIII of the General Appropriations Act (GAA) for 2026.
As for the GAA for 2024 and 2025, the Court stated that the "doctrine of operative fact" is appropriate.
This means that good faith acts done in accordance with a law presumed to be valid will not be invalidated.
However, the doctrine only covers irreversible programs where the beneficiaries acted in good faith.
It does not protect the authors, proponents, or implementers of such programs from criminal, civil, or administrative liability, unless the relevant courts or tribunals expressly determine that they acted in good faith.
What’s next
The 2027 budget, now in the Senate, will be written under these limits, and the House has vowed safeguards on ₱112 billion in "unprogrammed funds".
Reactions from Congress and the Palace are still coming.