DBM: Returning full P107 billion to PDIC not fiscally prudent

MANILA, Philippines — The Department of Budget and Management (DBM) is putting the brakes on the immediate return of the full P107.23 billion in unused reserve funds to the Philippine Deposit Insurance Corp. (PDIC).

The DBM said returning the entire amount in one year would strain the government’s limited fiscal space and displace expenditures programmed under the proposed national budget for 2027.

In a statement, the DBM said setting aside the full amount at once would not be “fiscally prudent” given the size of the amount and the absence of a final and executory court directive requiring the immediate restoration of the PDIC funds.

“The P57 billion is there precisely so the government has fiscal room to respond should a definitive legal obligation arise,” acting Budget Secretary Kim Robert de Leon said, prompting the DBM to put the proposed P57-billion provision under the unprogrammed funds.

UA serves as a standby appropriation authority that may be tapped only when the conditions provided by law are met, including the availability of the applicable fund source.

PDIC remitted the P107.23 billion to the Bureau of the Treasury in January 2025 pursuant to a congressional mandate under the 2024 General Appropriations Act and an opinion from the Office of the Government Corporate Counsel.

The DBM said the P57-billion provision is intended to provide appropriation cover should the Supreme Court ultimately order the government to restore the funds, subject to the availability of the required funding source and other applicable conditions.

It explained that the provision provides a “fiscal buffer” while protecting funding for education, health, infrastructure, social protection and other essential services.

Regarding the remaining balance of P50.23 billion from the entire PDIC fund remittance, the DBM said this would depend on a final court ruling or legal directive, the government’s fiscal position and revenue performance and the requirements of succeeding national budgets.

“It would therefore be premature to commit to a specific timetable for restoring the full amount,” the DBM added.

Executive Secretary Ralph Recto earlier said the government plans to complete the restoration in two tranches, with the remaining P50.23 billion eyed for inclusion in the 2028 National Expenditure Program.

“Should there be a final and executory court directive, the government will comply in an orderly and fiscally responsible manner – one that respects the law while protecting essential public services and the priorities already funded for the Filipino people,” De Leon said.

Classroom funding

At the same time, the DBM issued a clarification on the classroom figures raised during the recent Development Budget Coordination Committee briefing at the House of Representatives, where ACT Teachers party-list Rep. Antonio Tinio said the return of the P107.4-billion flood control allocation should be directed toward classrooms.

Tinio said that the government is targeting the construction of only about 700 classrooms in the budget for next year despite the 160,000 shortage.

The DBM clarified that under the proposed 2027 NEP, funding is provided for the construction of 6,587 new classrooms, not 700.

“The 700 figure refers specifically to (the Department of Education)’s commitment on the number of classrooms it expects to complete within the 2027 budget year. It does not represent the total number of classrooms proposed to be funded or undertaken under the FY 2027 NEP,” it said.