The Department of Budget and Management (DBM) on July 29 submitted to the House of Representatives the Marcos administration’s proposed P6.352-trillion national budget for 2025, an election year.
The budget proposal, called the National Expenditure Program or NEP, is traditionally submitted to the House after the State of the Nation Address (SONA).
The NEP will be converted into a budget bill. Its submission signals the beginning of budget deliberations, where lawmakers review, approve, junk, or amend DBM’s proposals.
Below are budget items to watch during the deliberations on the NEP.
The administration earmarked a budget of P14.185 billion for the country’s flagship anti-poverty program — the Pantawid Pamilyang Pilipino Program (4Ps) or the Conditional Cash Transfer Program.
Implemented by the Department of Social Welfare and Development, the program is aimed at reducing poverty by providing financial assistance to low-income families. In exchange for cash grants, 4Ps beneficiaries work to meet specific health and educational requirements such as regular health check-ups and school attendance for children.
Only a few other budget items have a higher allocation than the 4Ps program. Among these are the automatic Debt Service Fund Interest Payments (P848 billion), the Department of Public Works and Highways’ (DPWH) Flood Management Program (P254 billion), and Pension and Gratuity (P232 billion).
The Philippines will be spending more in 2025 to service its debt in big part because of loans made during the Covid-19 pandemic. P848 billion is equivalent to 13.8 percent of the 2025 proposed budget and is higher than the approved P670.525-billion payment this year.
“Nanghiram po tayo noong mga panahon na ‘yun. Most of it matured. At the same time, the forex (foreign exchange), exchange rates, and interest rates are a little high. ‘Yung sa forex natin gumalaw ng kaunti,” Budget Secretary Amenah Pangandaman said in a press conference on July 29.
DPWH’s Flood Management Program was earmarked a budget of P254.289 billion.
The urgency of flood control projects was underscored again in the wake of Super Typhoon “Carina,” which submerged many parts of the country capital in flood waters. Questions were also raised about whether or not the multi-billion-peso projects that were funded in recent years were effective in managing flooding in the metropolis.
Anti-corruption advocates have flagged the vulnerability of these flood control projects to corruption since public works such as dredging, for instance, are not always easy to audit.
The 2025 proposed budget also allocated P232 billion for pension and gratuity, the retirement pay of all retired government employees.
Will Congress approve this amount? Lawmakers last year cut the allocation for Pension and Gratuity from P253.205 billion in the NEP to P142.956 billion in the General Appropriations Act (GAA).
Pension and Gratuity payments ballooned after former President Duterte increased the salaries of policemen and soldiers. These payments are fully funded by the national government since the retirees do not pay contributions.
Fears of fiscal collapse due to the ballooning payments prompted urgent calls to reform the military and uniformed personnel (MUP) pension system. Defense Secretary Gilberto Teodoro Jr. has made proposals to this effect, but a relevant bill is stalled in Congress.
Meanwhile, the modernization program of the Armed Forces of the Philippines was earmarked a budget of P50 billion. It is P10 billion more than the approved allocation for this year.
It may have an additional allocation of P25 billion, earmarked under the unprogrammed funds, but it may be downloaded if government revenues next year will exceed targets.
President Ferdinand Marcos Jr. rejected calls to junk the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC), an office created during the previous Duterte administration that became notorious for the red-tagging of activists, political repression of government critics, and commission of other human rights violations.
The task force’s Support to the Barangay Development Program was allocated P7.8 billion. It is intended for the implementation of “specific programs and projects of the NTF-ELCAC for 780 cleared barangays as certified by the NTF-ELCAC.”
The projects include farm-to-market roads, school buildings, water and sanitation system, health stations, and electrification.
The administration allocated a smaller P1 billion for the compensation of the victims of the 2017 siege of Marawi City in southern Philippines.
It was allocated an additional P2 billion under unprogrammed funds, but this may only be released when total revenues exceed the target.
The Marawi Compensation Board (MCB) has repeatedly asked for a higher budget allocation to compensate thousands of residents who lost their loved ones, homes, and commercial establishments during the five-month-long battle between government security forces and militants linked with international jihadist group Islamic State.
Security analysts have warned that continued failure to address the grievances of the siege victims could lead to discontent that will make them vulnerable to possible recruitment by armed groups operating in the area.
BARMM’s block grant for 2025 amounted to P83.42 billion. It is an automatic allocation representing 5 percent of the national revenue collections, which the regional government has full control of.
This arrangement was a result of the peace process between the national government and the dominant rebel group Moro Islamic Liberation Front, which currently leads the autonomous region.
Officials of the Autonomous Region in Muslim Mindanao (ARMM), the predecessor of BARMM, previously needed to lobby lawmakers for bigger budgets. Apart from this automatic allocation, the peace agreement gave BARMM wider control of its natural resources.
The BARMM, created in 2019, will hold its first regular elections on May 12 next year. The elections will be funded with BARMM’s block grant.
2025 is a big election year. The national and local elections are also scheduled on May 12, 2025. It includes Overseas Absentee Voting which allows Filipino voters overseas to participate in the elections.
The Sangguniang Kabataan and Barangay Elections are also scheduled in December 2025 although proposals were made to postpone these to 2026.
Marcos will get confidential and intelligence funds amounting to P4.56 billion. These items are exempted from the standard procedures of the Commission on Audit.
What other budget items do you want us to watch during the budget deliberations? And why? Post a comment in our social media pages. — PCIJ.org