Budget reform push and front-loaded spending
From AB Capital's The Opening Bell: Three Moves
Event
DBM is considering lowering the cap on unprogrammed appropriations to around 3% (from previous proposals of 5%) to enhance transparency. It is also targeting roughly P1.4tn in 1Q26 disbursements to help offset last year’s growth slowdown.
View
We think tightening the UA cap is aimed at restoring fiscal credibility amid scrutiny over infra spending. In our view, clearer definitions and stricter limits could strengthen governance perception.
Catalyst
Front-loaded spending could lift 1H26 growth if agencies accelerate disbursements, particularly after 4Q25’s weak 3% GDP print. However, delays in fund releases or cautious departmental spending may limit multiplier effects.
Action
We believe markets will focus on actual disbursement data rather than reform rhetoric. Infra-linked stocks and domestic cyclicals could benefit if spending momentum materializes, while sustained underspending would reinforce defensive positioning.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
- Latest
