Gov’t proposes P7.2-T spending bill for 2027

MANILA, Philippines — The Marcos administration has asked Congress to allocate more than P7.2 trillion for its 2027 national budget when the legislature convenes for its second regular session on July 24, according to the Department of Budget and Management (DBM).

The proposed budget is P407 billion, or 6 percent, more than the P6.793-trillion national budget for 2026, and will be equivalent to 21.7 percent of the country’s gross domestic product (GDP), the DBM said in its National Budget Memorandum No. 158, its framework for next year’s budget.

The memorandum, signed by acting DBM Secretary Kim Robert de Leon and posted on the agency’s official website on Friday, did not contain project details because it was meant to only guide agencies in seeking funding from Congress.

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READ: Marcos gov’t lowers GDP growth targets

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At this stage in the budget process, DBM is already expected to know key items in an agency’s budget, some of which will likely be featured in the President’s State of the Nation Address on July 24.

“In crafting the proposed [Fiscal Year] 2027 budget, the government is confronted with a very narrow fiscal space, further constrained by funding pressures from automatically appropriated items, such as the National Tax Allotment shares of LGUs (local government units) and interest payments, as well as the requirements of newly-enacted laws and recurrent mandatory expenditures,” the memorandum read.

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Calibrate proposals

“As such, all proposed [Programs, Activities and Projects] should have undergone the necessary review and approval by relevant oversight agencies or committees within the prescribed budget preparation timelines to be considered for funding in the proposed FY 2027 Budget,” DBM added.

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The agency admitted that the “very narrow fiscal space” is limited by automatically appropriated items, such as the national tax allotments of local government units and rising interest payments.

Debt service or interest payments are projected to reach P950 billion in 2026, a 12-percent increase that outpaces revenue growth, as shown by the government’s reduced growth target.

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The 2026 growth target was scaled back to 3.5 percent to 4.5 percent due to lower-than-expected performance and global uncertainties, like rising global oil prices driven and the flood control graft scandal, which slowed infrastructure spending and dampened private consumption.

The government last met its infrastructure spending target of 5.3 percent of GDP in 2024, although it missed its plan to achieve “upper middle-income status” with gross national income per capita falling short of the World Bank threshold.

The following year, the government failed to meet its fiscal targets, with the deficit running at more than 5.6 percent of GDP and public debt closing at 63.2 percent.

Short of target

The government again failed to meet its initial spending and deficit reduction targets for 2026 budget because of lower economic growth and significant spending cuts.

The interagency Development Budget Coordination Committee (DBCC) said the national government’s fiscal policy should be recalibrated to spur economic growth and support vulnerable sectors.

“The issues surrounding alleged anomalies in flood control projects last year and, more recently the conflict involving the United States, Israel, and Iran made a drastic impact on the country’s macroeconomic fundamentals,” the memorandum said.

The Philippine economy grew by 4.4 percent in 2025. The slowdown was due to concerns over anomalous flood control projects and global economic uncertainties.

The government first reached its first trillion-peso budget in 1999 during the administration of former President Joseph Estrada.

Before 1999, the government’s budget had remained below the trillion-peso level even amid the growth during the administration of then President Fidel Ramos was growing.

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Since 1999, however, the budget has grown substantially over the decades due to inflation, population growth, and expanded government services. By 2025, the national budget reached a record P6.33 trillion, and further increased in 2026 to P6.793 trillion. —PNA