[In This Economy] The 2027 budget: Hocus-pocus prevails once more

• The proposed P7.2-trillion national budget for 2027 is set to be passed by Congress, but a significant portion is already allocated for interest payments and local government shares, limiting available funds for other programs.
• Historical patterns show that Congress often adds funds to the budget, but many of these additions are removed in subsequent proposals by the President, indicating a cyclical tug-of-war over budget allocations.
• Concerns about budget transparency and accountability persist, as recent reforms have not fully addressed civil-society participation, and the appropriations committee approved the budget without amendments, raising fears of a return to less transparent practices.

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The proposed P7.2-trillion national budget for 2027 reached the House of Representatives plenary on Tuesday, September 15. Lawmakers want to pass it on third reading by October 9.

P7.2 trillion is an incomprehensible amount. Divide it among 113.9 million Filipinos and it comes to roughly P63,200 per person for the year. That daily amount must pay for public schools, hospitals, soldiers, subsidies, government workers, roads—and God forbid, anomalous flood control projects.

But while large, much of the budget is actually already spoken for. Interest payments alone will consume 15.5% of next year’s budget. The National Tax Allotment (NTA), or the automatic share of national taxes going to local governments, will take up roughly another fifth. Together, these two items already account for more than a third of the entire budget.

The budget is also shrinking relative to the economy. At 21.7% of projected gross domestic product (GDP), the 2027 proposal is back to its 2023 level, down from 22.6% in 2025. The budget is a record in pesos largely because the economy and prices have grown. Relative to GDP, though, the national government’s spending footprint has barely expanded.

Size is only the first question. The more revealing question is what happens to the money as the budget moves from Malacañang to Congress and then back again.

Budget game

I recently built an online dashboard tracking how every national budget changed between the President’s proposal and the enacted law from 2023 to 2026, together with the proposed budget for 2027.

Several patterns stand out. First, Congress rewrites much more of the budget than the broad department totals suggest. At the department level, only around 6% of funds seem to change between the President’s proposal and the enacted budget. At the program level, however, between 16% and 23% changes.

This suggests that much of the reshuffling happens inside departments. The department’s total allocation may look almost untouched even as billions of pesos move from one program to another.

Second, the president removes much of what Congress inserts, but only in the following year’s proposal. Of the roughly P500 billion that Congress added to the 2026 budget, P283 billion disappeared from the proposed 2027 budget. Meanwhile, P306 billion of what Congress cut in 2026 was restored.

Across the past five budget cycles, only 30% to 50% of congressional additions survived into the next president’s proposal. The pattern is apparent: Congress inserts funds, Malacañang removes many of them the following year, and Congress gets another chance to put them back.

Third, the additions that survive show us which programs have acquired political staying power.

Red flags

Consider the Local Government Support Fund (LGSF), a pool that finances projects and financial assistance for local governments. Malacañang proposed P16.1 billion for it in 2026. Congress raised the allocation to P57.9 billion. The 2027 proposal retains P58.5 billion—seemingly a copy-paste of what Congress previously approved.

Most congressional additions eventually disappear from the next proposal, but the LGSF didn’t. The insertion of Congress effectively became the new baseline.

The same pattern is visible in ayuda or cash assistance. Congress added P31.8 billion to the president’s proposal in 2023, P92.6 billion in 2024, P53.5 billion in 2025, and P75 billion in 2026.

Ayuda is useful during genuine emergencies. But large discretionary assistance programs also allow politicians to present public money as coming from their own pockets, especially in the run-up to the 2028 elections.

Interestingly, flood control moved in the opposite direction, but only after the scandal forced everyone’s hand.

For 2026, the Department of Public Works and Highways (DPWH) proposed P250.8 billion for its Flood Management Program and ended up with just P4.8 billion, a 98% cut. The proposed 2027 allocation partly restores the program to P103.5 billion.

Some flood-control spending is plainly necessary. But restoring the money is not the same as proving that the projects are well designed, properly located, or free from corruption. No hearing has established that yet, even as the Independent Commission for Infrastructure (ICI) had closed shop already.

Then there are unprogrammed appropriations, the standby list of projects that may be funded when additional revenues or financing become available. Congress added P219 billion to this list in 2023, P450 billion in 2024, and P373 billion in 2025.

The 2026 enacted budget was the first in years to contain less unprogrammed spending than President Ferdinand Marcos Jr. had proposed, after he vetoed P92.5 billion. For 2027, Malacañang proposed just P112 billion, the lowest amount at the proposal stage since 2019.

That is progress. But it will remain progress only if Congress leaves the amount alone. Until now, people who ballooned and abused unprogrammed funds in the past few years have gone scot-free.

Recently, the Philippine Center for Investigative Journalism (PCIJ) released a bombshell report showing that unprogrammed funds were used not just for flood control projects but also school buildings—half of which went to the 4^th District Engineering Office of Batangas province, which happens to be the bailiwick of current Executive Secretary (and former senator) Ralph Recto.

Tokenistic

The integrity of the budgeting process remains to be in question. But Congress is moving toward less rather than more budget transparency and accountability.

After the flood-control scandal erupted in 2025, the House promised to end the “small committee” that finalized amendments behind closed doors.

Under Representative Mika Suansing, chair of the House Committee on Appropriations (following immediately after Zaldy Co, the previous chair turned international fugitive) Congress created the Budget Amendments Review Subcommittee (BARSc). They also issued interim rules for civil-society participation and livestreamed the bicameral conference committee in December 2025 (also called “open bicam”).

Suansing said in August that the 2027 budget process would retain these reforms. But civil-society groups soon complained that they were being excluded from agency hearings. Tim Salomon of the Caucus of Development Non-Government Organizations Networks said the committee had “gone cold on us” and that questions they submitted were “seen-zoned.” Meanwhile, my friend and public finance analyst Zy-za Suzara said the House was “not walking their talk.”

After the complaints, the House convened a separate People’s Budget Review on September 8 with 13 civil-society organizations (CSO). That was better than nothing. But it was more of an open forum, where each CSO representative was given only a few minutes to air their thoughts. It’s not the same as allowing watchdogs to participate throughout the agency hearings, submit questions on time, and see those questions answered on the record.

As the People’s Budget Coalition, Makati Business Club, and Roundtable for Inclusive Development put it, observing a hearing and being able to speak in one are different things.

The old habits are also intact. The Office of the President’s P10.15-billion proposed budget, including P4.58 billion in confidential and intelligence funds, cleared the appropriations committee in less than 20 minutes on September 1. By a vote of 37 to 5, lawmakers ended questioning in the name of “institutional and interbranch courtesy.”

That is the same sort of courtesy that they previously extended to Vice President Sara Duterte’s confidential funds—which are now being scrutinized in her impeachment trial.

Dimming lights

Most troublingly, the appropriations committee approved the entire P7.2-trillion bill without a single amendment because BARSc had not yet convened. The committee vote therefore settled almost nothing. The budget rewriting was merely postponed to a subcommittee working under an increasingly tight timetable.

Suansing insists that “there is no amendment to the budget that we do not deliberate publicly.” But words are cheap, and they must live up to that promise. For instance, every BARSc session should be livestreamed. Every amendment, its sponsor, and the amount involved should be published before the second-reading vote. The bicameral conference later this year should remain open to the public.

Last year, the flood control scandal forced Congress to turn on the lights. This year, as the outrage fades, and as politicians train their sights on 2028, the room seems to be darkening again. Expect budget hocus-pocus to prevail. – Rappler.com

Jan Carlo “JC” Punongbayan, PhD is an associate professor at the University of the Philippines School of Economics (UPSE). His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for Rappler.com. He is also co-founder of UsapangEcon.com and co-host of Usapang Econ Podcast.

His first book, False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them, was published by Ateneo de Manila University Press in February 2023. His second book, Twin Plagues: How Duterte and Covid-19 Wrecked the Philippine Economy, was published by Penguin Random House SEA in June 2026. Follow him on Instagram (@jcpunongbayan).