Palace propose P6.352 trillion 2025 budget

MANILA, Philippines — The Marcos administration is proposing another record budget of P6.352 trillion for 2025 as the government moves to finance its priority programs and achieve its macroeconomic targets.

At a briefing following the 188th Cabinet-level Development Budget Coordination Committee meeting yesterday, Budget Secretary and DBCC chair Amenah Pangandaman said the proposed National Expenditure Program for 2025 is P6.352 trillion.

The record budget level proposed for next year is 10.1 percent above this year’s allocation of P5.768 trillion.

“Social sector will definitely, again, get a big chunk of the budget – that’s education, health and social protection,” Pangandaman said.

“Agriculture will also remain to be a top priority as we increase our investments for food security. We also have infrastructure development and digitalization as well as climate projects,” she said.

The P6.352 trillion is 2.45 percent higher than the previous proposal of P6.2 trillion last April. Next year’s budget is equivalent to 22 percent of the economy.

Pangandaman explained that the increase has taken into consideration the higher budget allocation for local government units (LGUs) – up by almost 20 percent to P1.03 trillion.

The national tax allotment (NTA) for LGUs for 2025 will be up 18.7 percent to P1.03 trillion from this year’s level of P871.38 billion.

LGUs will get a higher share as the NTA is based on the 2022 revenue collection, which improved as the economy significantly bounced back from a two-year slump at the height of the COVID pandemic.

“Next year is also an election year so we have to fund that, we increased the allowance for those who will help in the election,” Pangandaman said.

She added that there is also an expansion in the conditional cash transfer program of the government, as well as the higher allowance of P10,000 for teachers.

She noted that the economic team is set to present the NEP to the Cabinet on July 2 and submit it to Congress on July 29, a week after the President’s State of the Nation Address. The process will be significantly ahead of schedule as the constitutional deadline for the submission of budget is 30 days after the SONA.

Furthermore, Pangandaman emphasized that the budget will build on the gains from the first two years of the Marcos administration and continue to usher in economic and social transformation for a prosperous, inclusive and resilient society.

In line with the Philippine Development Plan, the proposed budget also aims to protect the capabilities of individuals and families and transform production sectors to generate more quality jobs and produce competitive products.

It also targets to foster an enabling environment encompassing institutions, physical and natural environments.

In evaluating the agencies’ budget proposals for 2025, Pangandaman said the Department of Budget and Management considered several factors such as the availability of fiscal space, implementation-readiness of programs and projects, agency absorptive capacity, and alignment with expenditure directions.

The administration’s economic team, meanwhile, was less optimistic on the inflation trend in the country, hiking its assumption to three percent to four percent range from the previous target of two to four percent in April. Inflation quickened to a six-month high of 3.9 percent in May, bringing the five-month average to 3.5 percent.

The trend is not expected to significantly impact overall growth, however, according to the economic team.