Philippine national budget 2025

[ANALYSIS] 2025 BBM: Budget badly made

Sonny Africa

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[ANALYSIS] 2025 BBM: Budget badly made

President Ferdinand Marcos Jr. delivers the State of the Nation POLICY DIRECTIONS. Address during the opening of the 19th Congress, at the House of Representatives on July 22, 2024.

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The proposed P6.4 trillion budget sounds impressive. But the way it’s spent doesn’t really respond to the nation’s social and economic needs while, unfortunately, favoring the pork of politicians and profits of the rich.

You really can make a bad thing worse.

The proposed budget that Pres. Bongbong Marcos (BBM) submitted to Congress on July 29, 2024, was already deeply flawed from the start. Although grandiosely themed “Agenda for Prosperity: Fulfilling the Needs and Aspirations of the Filipino People,” it was anything but that. From the very beginning, it was clear that the budget would make the poor poorer and the rich richer.

Budget potential

The national government budget is one of the state’s most potent mechanisms for social and economic development that benefits the majority. To do that, however, presumes that there is a genuine strategy for social and economic development to begin with, where the budget — meaning both its spending and revenue program — is the fiscal expression of that strategy.

The proposed P6.4 trillion budget sounds impressive. But the way it’s spent doesn’t really respond to the nation’s social and economic needs while, unfortunately, favoring the pork of politicians and profits of the rich. The budget is a quantitative measure of how much needs to be fixed in the country’s undemocratic politics and inequitable economy.

The President’s Budget submitted to Congress was already grossly unresponsive to grossly adverse trends since the start of the Marcos administration: poverty growing to some 16 to19 million families, hunger worsening to over six million families, manufacturing falling to its smallest share of the economy in nearly 80 years, and agriculture down to its smallest share in the country’s history. It also had billions of pesos in pork barrel projects, confidential and intelligence funds, and other trapo (traditional politician) devices.

Running this through the legislative mill just made things worse. House Speaker and presidential cousin Martin Romualdez once again sneaking in an Ayuda para sa Kapos and Kita Program (AKAP) discretionary cash aid program was controversial but just the tip of the proverbial iceberg. To recall, AKAP wasn’t even in the President’s Budget submitted to Congress in 2023 and 2024.

Bicam magic

So, what does the budget look like especially after being taken up in the House of Representatives (HOR), Senate and especially the bicameral conference committee (bicam) secret chamber? The bicam is just the tail-end of a dubious budget process but its brazenness is disturbing.

Last year, the bicam decided on over P1 trillion for the 2024 national budget – P564.5 billion in realignments and adding P449.5 billion in unprogrammed funds. That’s a huge amount considering the total budget passed for 2024 was just P5.78 trillion. This year, the bicam decided on P860.5 billion for 2025 — P487.5 billion in realignments and adding P373 billion in unprogrammed funds. The total budget for 2025 is Php6.35 trillion.

Congress took care of its own interests in the bicam — the HOR gave itself an additional P17.3 billion and the Senate an extra P1.1 billion. The Office of the President was also given an additional P5.4 billion, ostensibly for hosting the ASEAN Summit in 2026 but with no details of this in the bicameral conference committee report. Similarly, there were no specifics for the HOR and Senate increases.

The most glaring addition though is the additional P288.6 billion for the Department of Public Works and Highways (DPWH) which brings its budget to a massive P1.11 trillion for 2025. This is widely suspected to be more pork barrel projects, which legislators in the upper and lower houses barefacedly inserted on top of what they already lobbied for during the executive budget preparation process from January to July 2024.

This bicam magic has made the DPWH’s budget larger than the P906.9 billion combined budgets of the Department of Education (DepED, P737.1 billion); State University and Colleges (SUCs, P122.2 billion); Commission on Higher Education (CHED, P26.9 billion); and Technical Education and Skills Development Authority (TESDA, P20.7 billion). Even adding another P100 billion in assorted education-related spending under the departments of science and technology, defense, local government, and other executive offices doesn’t change this unprecedented deprioritization of education in the national budget.

It’s also worth recalling how the infrastructure program is unduly biased not just for pork barrel projects but also for supporting the profits of mainly large local and foreign firms. The flagship programs are heavily concentrated not in the regions where infrastructure is scarce and populations poorest, but in the National Capital Region (NCR), Central Luzon and Southern Tagalog where the country’s biggest corporations and foreign-dominated special economic zones are found.

On the other hand, out of the over Php1.5 trillion infrastructure budget (which may reach some Php1.8 trillion because of the DPWH additions) only 2.5% goes to school buildings, 1% to hospitals and health centers, 0.5% to water supply systems, and 0.14% to housing and community facilities.

Budget losers

Congress is constitutionally prohibited from increasing the appropriations in the President’s proposed budget. Where did the budget increases for politicians, pork and patronage come from then? This is where the bicam really made a bad thing worse — it cut the budgets for agriculture, education, health and social protection.

Amid the rising prices of food that burden poor Filipinos the most, the bicam actually cut the budget for agriculture by a massive P43.2 billion — P20 billion from the agriculture department and P23.2 billion from the National Irrigation Administration (NIA). The bicam budget will keep food expensive and worsen rural poverty among farmers and fisherfolk.

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Food inflation is already worst for the poorest Filipino families, and agricultural productivity, measured as agricultural output per employed in the sector, has been steeply falling since 2021. The agriculture sector has also grown by an average of just 0.2% quarterly under the Marcos administration. This is just one-sixth the 1.2% average under the Duterte government and a fraction of the almost 2.5% historical average over the last 25 years.

On the heels of damning findings about the learning competencies of Filipino youth, the bicam cut the budget for education. This deprioratization affected all levels of education from primary to tertiary. The education department budget was slashed by P11.6 billion, CHED’s by P26.9 billion, and TESDA’s by P1.1 billion; taken altogether these overshadowed the marginal P7.2 billion increase for SUCs.

Amid the rising cost of health care and pressure on tight family incomes, the bicam cut the budget for health. The health department budget was defunded by P25.8 billion and, as already widely reported and criticized, the PhilHealth subsidy of P74.4 billion was removed. The health insurance and financing mode to give Filipinos access to health care is flawed and should be replaced with a vastly expanded public health care system. Yet while this flawed system is in place, cutting the budget for it just further limits healthcare for Filipinos in need.

Notwithstanding seemingly favorable labor force data, the crisis of joblessness is so bad that family incomes and earnings are simply not able to ensure a minimum quality of life for tens of millions of Filipinos. Cash assistance or, colloquially, ayuda is urgent in this context. Yet Congress is of the mind to distort even this pressing need of some six to seven-out-of-ten poor and vulnerable Filipino families.

With the welfare of millions of Filipinos worsening, the bicam cut the budget of the social welfare department by P95.9 billion. The bicameral conference committee report is sketchy and it’s not clear where these cuts were made. What’s explicit though is that the Pantawid Pamilyang Pilipino Program (4Ps) was cut by a huge P50 billion. In effect, much of the slack was taken up by the P26 billion for AKAP (albeit P13 billion less than the budget proposed for the bicam).

This replaces the elaborate system of 4Ps beneficiary lists with a completely discretionary ayuda slush fund. The criteria for AKAP is absurd: it targets individuals whose income falls below the minimum wage and who are “severely affected by rising inflation.” This can cover some 75 million poor and vulnerable Filipinos, effectively justifying virtually all intended patronage spending by politicians.

Amid worsening joblessness and informality, the bicam also cut the labor department’s budget by P18 billion – mostly because of the P17.2 billion cut in the TUPAD or Tulong Panghanapbuhay sa Ating Disadvantaged Workers program for informal workers.

Budgeting better

The government’s resources are certainly finite and there are certainly many competing demands. Yet setting aside how these resources can actually be greatly expanded with wealth taxes and a more progressive tax system, there’s actually a deeper problem in play. The government easily decides on austerity for the poor yet just as easily decides to give huge budgets for pork and patronage, infrastructure for the rich, and even sacred debt service.

The bicam just made the national budget even more pro-pork and pro-rich yet anti-poor and anti-development. The only thing to do is to return the budget to Congress to be deliberated with real transparency and public participation, and according to a real strategy for social and economic development. The glaring absence of fiscal support for a program of national industrialization is worth highlighting.

This will take time but the government can easily run on a reenacted budget next year for as long as is needed to come up with a better budget. Kung gusto maraming paraan, pero kung ayaw ay maraming dahilan.Rappler.com

Sonny Africa is the executive director of IBON Foundation.

1 comment

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  1. ET

    When will we have a pro-poor and pro-development budget? Not under this traditional Republican form of government. It will always be pro-pork and pro-rich, and we have to live with that.

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