Budget ‘padding’ in NEP questioned

MANILA, Philippines — A “pattern of padding” is evident in certain items in the National Expenditure Program (NEP), meant possibly to provide “fiscal space” for later budget insertions under a substantially reduced figure in the General Appropriations Act (GAA), according to ACT Teachers party-list Rep. Antonio Tinio.

“We have noticed a pattern, or I should say a modus, of padding under the NEP – padding of certain items. This is what, over the years, has always been big in the NEP, but when it came to the GAA, it shrank significantly,” Tinio said.

“This is what enables massive insertions,” he said at the Development Budget Coordination Committee budget briefing at the House of Representatives.

The NEP outlines the national spending plan submitted by the President to Congress for review and deliberation.

Tinio cited foreign-assisted projects under the Department of Transportation (DOTr) and Department of Public Works and Highways (DPWH), as well as the Miscellaneous Personnel Benefits Fund and Pension and Gratuity Fund, as examples of budget padding.

In his presentation, he said foreign-assisted projects under the DOTr were allotted P135.85 billion in the 2026 NEP proposal. The figure was later cut by 52.8 percent to P64.07 billion in the enacted budget.

The DPWH’s foreign funded projects saw a similar reduction, with P100 billion in the NEP being sharply cut by 82.3 percent to P17.7 billion in GAA.

Acting Budget Secretary Kim Robert de Leon explained that the agency’s proposed amount submitted in the NEP is in accordance with the “evaluated requirement” for foreign-assisted projects.

“In fact, our proposed level in the NEP is lower compared to the actual agency proposal,” he said, adding that the reduced budget is one of the reasons for implementation delays in the foreign-assisted projects.

At the same time, Finance Secretary Frederick Go said the government has incurred a total of P3.4 billion in commitment fees for foreign-funded projects since 2022.

In a separate report, Monetary Board member and former Department of Budget and Management secretary Benjamin Diokno echoed the same concerns, noting that in the 2023, 2024 and 2025 budgets, the bicameral committee went beyond reconciling differences between the House and Senate versions.

Instead, it introduced new items and turned cuts in one department into spending room elsewhere.

Diokno also noted that the “clearest example” was the repeated reduction of proposed foreign-assisted projects under the DOTr and the corresponding expansion of the DPWH.

“Legislators describe this as creating ‘fiscal space.’ In practice, it became a pool for congressional initiatives that, because they were programmed appropriations, could be funded from the first day of the fiscal year,” Diokno said.

He also lamented that the maneuver is costly as most of the displaced DOTr projects are foreign-assisted projects with long lead times and large economic payoffs.

In the 2024 budget, the NEP proposed P161.3 billion for 15 foreign-assisted projects under the DOTr, including Phase 1 of the Metro Manila Subway Project, at P68.4 billion, and the North-South Commuter Railway, at P76.3 billion.

In the GAA, however, only the MRT-3 Rehabilitation Project was retained from the executive proposal. The other foreign-assisted transport projects, including the subway and the North-South Commuter Railway, were removed.

“The cuts helped finance an increase in the DPWH budget from P822.2 billion in the President’s proposal to P997.9 billion in the GAA,” Diokno said.

“The cost is not merely accounting. Delays in major infrastructure projects raise implementation costs and postpone the benefits that citizens were meant to receive,” he added.

Erice claim denied

Meanwhile, DPWH Secretary Vince Dizon has denied Caloocan City Rep. Edgar Erice’s claim that he threatened to give him zero budget for infrastructure projects for his district over his criticisms of the administration.

“I personally called Secretary Vince Dizon and informed him of what Congressman Erice had said in an interview. Secretary Vince Dizon himself refuted the claim, as he has not spoken to Congressman Erice regarding the accusation,” Palace press officer Claire Castro told reporters yesterday. Castro branded Erice’s claims as “fake news” and “baseless.”

She, however, said the administration is open to criticisms and legitimate concerns from the public.

“The government is not afraid of any criticism. The President looks into whatever concerns our fellow citizens convey so he knows what is lacking and what needs to be done,” she added.

Castro advised Erice not to merely repeat unverified statements. “He cannot simply parrot what other people are saying without basis,” she said.

In a television interview, Erice said his district had not received funding for infrastructure projects over the past year, citing political reasons. — Helen Flores