President Ferdinand R. Marcos, Jr. delivered his fifth (penultimate) State of the Nation Address (SONA) on July 27. His much applauded 1-1/2 hour speech centered on the themes of security, self-sufficiency, and government accountability. Marcos devoted the opening portion of his speech to vowing full accountability in the corruption scandal that had rocked the government in 2025. He said nearly P25 billion has been recovered or frozen from those accused, according to a story in the Philippine Star.
Less than two weeks after the plans and promises made in his SONA, Marcos Jr. presented his logistics strategy: “Our proposed P7.2-trillion national budget for 2027 is focused on protecting families, creating jobs, keeping food on the table, and investing in the services and infrastructure our people need. We will be prudent with our resources, disciplined in our spending and relentless in making sure that every peso delivers for the Filipino people,” he said in a Facebook post on Oct. 10.
The National Expenditure Program (NEP) of P7.2 trillion (roughly 21.7% of GDP), submitted by the Department of Budget Management (DBM) through acting Secretary Kim Robert de Leon, showed a 6% increase compared to the 2026 budget, according to the DBM. The government projects P5.21 trillion in revenues and P6.9 trillion in direct spending (within the broader framework), resulting in a projected deficit of P1.69 trillion or 5.1% of GDP.
The Philippine government plans to raise P3.3 trillion in gross borrowings to help fund the proposed P7.2-trillion national budget for 2027.
The key Department shares: Education (DepEd): P975B-P976B; Public Works (DPWH): P644B; Health (DoH): P271B-P353B; Defense (DND): P328B; and Debt Interest: over P1.1 trillion (taking roughly 15.5% of the total budget).
Former Finance Secretary Margarito “Gary” Teves (who served under President Gloria Macapagal-Arroyo, 2005-2010), worried about the budget cuts to be suffered by important departments (inquirerdotnet, Aug. 29). “Our initial assessment shows that the 2027 budget will find it difficult to address key concerns of Filipinos. While it reduces allocation for ayuda (assistance), key social services and agriculture programs also suffered budget cuts. It is also alarming that interest payments will get a larger share of the pie.
“A higher infrastructure budget is not an issue. But the poor absorptive capacity and vulnerability to corruption are. The DPWH and DoTr (Department of Transportation) are among the agencies with the lowest disbursement rates at 36% and 50%, in 2025, respectively,” Teves said.
The 2027 infrastructure budget will amount to P1.47 trillion, a 13% jump. The DPWH will receive a 21% increase at P644 billion due to the restoration of the flood management program (P103.5 billion) after it was scrapped this year due to corruption. The DoTr will have P301 billion, a 118% increase. More than half (P197 billion) will fund foreign assisted projects like the LRT Cavite Extension, North-South Commuter Railway, and Metro Manila Subway.
The Management Association of the Philippines (MAP) stressed that “the 2027 budget process is a litmus test for the government which is still reeling from the flood control corruption mess that has not only put graft in the public spotlight but also dampened investor confidence in the country.” It likewise described the 2027 budget as an opportunity for both Mr. Marcos and Congress to confront corruption concerns head-on (inquirerdotnet, Aug. 28).
MAP called for “zero tolerance” for hidden insertions, questionable appropriations, favored contractors, ghost or substandard projects, unexplained realignments and the use of public funds for political accommodation or personal gain. In particular, MAP wants greater scrutiny during congressional deliberations and the bicameral conference, where changes to the spending plan can be introduced before the final budget is submitted to the President for signing.
But civil society organizations remained excluded as rules for their participation remain unclear, blocking access and leaving their queries unanswered. “The House appropriations committee has gone cold on us,” Tim Salomon, program officer at Caucus of Development Non-Government Organizations Networks (CODE-NGO), complained to the Inquirer (Aug. 27).
The House of Representatives announced on its website on Oct. 12, that House Bill No. 10858 (the proposed P7.2-trillion General Appropriations Bill for Fiscal Year 2027) was approved on third and final reading with a vote of 281–13 and one abstention. An Inquirer report on the same day noted that the House terminated sponsorship and plenary deliberations on the proposed P27.89-billion budget for the Congress of the Philippines for 2027 without any interpellation.
Included in the proposed 2027 national budget are P111.984 billion worth of unprogrammed appropriations (UA), “the lowest amount nominally of the UAs since 2019 and only accounts for 1.5% of the total expenditure program — the lowest ratio since 1991,” the DBM declared up front when Marcos Jr. first presented his NEP in August.
The programs under UA in the proposed 2027 budget are: Restoration of the fund balances of the Philippine Deposit Insurance Corp.: P57 billion; Risk management program: P3.6 billion; Support to foreign-assisted projects: P42.6 billion; and Conversion of National Government advances into subsidy for GOCCs: P8.8 billion. Unprogrammed appropriations have come under heavy criticism after the government used them to fund flood control projects that were later linked to anomalies, as Rappler pointed out on Aug. 11.
Unprogrammed appropriations surged in 2023, the first approved budget under Marcos, when it reached P807.16 billion or more than triple the P251.64 billion UA in 2022. The amount stood at P731.4 billion in 2024 and P531.7 billion in 2025, but significantly dropped to around P150 billion in 2026, after strong opposition from civil society groups (Ibid.).
Civil society groups, along with lawmakers and concerned citizens, filed consolidated petitions with the Philippine Supreme Court (SC) in late 2025 and early 2026 to challenge the constitutionality of unprogrammed (standby) appropriations and unauthorized budget adjustments. The cases question specific provisions in the 2024, 2025, and 2026 General Appropriations Acts (GAAs), particularly those involving unprogrammed funds, appropriations that may only be released upon the availability of excess revenues or new funding sources, and the use of special accounts within the general fund (tribune.net.ph, March 31).
The 121-page SC decision was handed down on Oct. 7:
“The Supreme Court declared as unconstitutional, first, the 2024 General Appropriations Act because of Congress’s increase of the unprogrammed appropriations by P449.5 billion, which resulted in an increase in the president’s total recommended appropriations, second, Special Provisions 1(a) and (b), Chapter XLIII of the 2026 GAA and third, the 2025 GAA because of Congress’s increase of the Special Road Fund by P17.99 billion, which also resulted in an increase in the president’s total recommended appropriations.”
The Philippine Star (Oct. 21) puts it in layman’s terms:
“While the UA per se is not unconstitutional, the SC said it becomes ‘constitutionally infirm when they lack sufficient standards, effectively granting the Executive unchecked spending authority that weakens fiscal discipline and undermines funding for programmed projects when estimated government revenues are not realized.’
“The SC ruling also emphasized that ‘unprogrammed funds, as standby appropriations, must be released only when there are revenues in excess of the total revenue targets stated in the BESF (Budget of Expenditures and Sources of Funding)’.”
As a consequence, the high tribunal “permanently prohibited the Senate, House of Representatives, Office of the Executive Secretary and the Department of Budget and Management acting secretary from implementing Special Provision 1(a) and (b), Chapter XLIII of the 2026 GAA.” The Office of the Solicitor General (OSG) advised the DBM and the Executive branch to hold off on projects relying on these unprogrammed funds if they have not yet started. Projects already underway or being implemented in phases are allowed to continue.
GMA News of Oct. 22 reported that the Makabayan Bloc in the House of Representatives, together with the Kabataan Party-list called on the House of Representatives to recall the 2027 House General Appropriations Bill to correct what its members said were unconstitutional provisions in the proposed (2027) national budget measure. But Senate finance panel chairman JV Ejercito said in an interview on Super Radyo dzBB that funding for infrastructure flagship projects of the Marcos administration under the 2027 national budget should not be reduced so the Philippines can keep up with its neighbors in Southeast Asia, like Malaysia, Thailand, Indonesia, and Vietnam.
But maybe, parting with inappropriate unprogrammed appropriations in the budget process is a timely and necessary sacrifice, at this time of systemic, endemic corruption in our troubled country. Unprogrammed appropriations (UA) worth P111.984 billion, though only 1.5% of the total expenditure program, if deleted will teach discipline and accountability to our government officials. Stopping UA will also close “another avenue for the pork barrel and patronage,” ACT Teachers Party-list Rep. Antonio Tinio said, when the 2027 Budget was being debated (GMA News, Oct. 1).
And we hold President Ferdinand Marcos, Jr. to his promise: “We will be prudent with our resources, disciplined in our spending and relentless in making sure that every peso delivers for the Filipino people.”
There should be no inappropriate unprogrammed appropriations in the “Marcos budget.”
Amelia H. C. Ylagan is a doctor of Business Administration from the University of the Philippines.