MANILA, Philippines — Senators sought clarification from the Department of Budget and Management (DBM) on how to tackle the unprogrammed appropriations (UA) after the Supreme Court ruled as unconstitutional the 2024 and 2025 national budgets and portions of the 2026 outlay.
Budget Secretary Kim de Leon said the executive department’s version of the 2027 national budget under the National Expenditure Program (NEP) doesn’t have prohibited lump sum items flagged by the SC like the Strengthening Assistance for Government Infrastructure and Social Programs (SAGIP).
During the DBM budget hearing yesterday, De Leon vowed to work with Congress on how to proceed with the special provisions that serve as triggers for the release of the UA, or standby funds which can only be released when there are excess revenue collections from non-tax revenue sources and new revenue from new tax or non-tax sources.
Senate President Sherwin Gatchalian asked the DBM if the Supreme Court decision that flagged Congress’ move – bloating the 2024 and 2025 General Appropriations Act (GAA) with UA increases and creating an artificial fiscal space – meant that the Senate cannot go beyond what the President proposed in the NEP.
“Basically, the SC said Congress cannot exceed the NEP proposal of the President for programmed and unprogrammed (appropriations). That’s the bottom line and one of the most important directions,” Gatchalian said.
He also inquired about the SC decision that struck as unconstitutional the UA special provisions triggering their release, and whether the remaining special provision not flagged by the court – if there are approved loans for foreign-assisted projects (FAP) – is the only legal way to release the standby funds.
The Special Provisions 1(a) and 1(b) struck down as unconstitutional refer to the “availment of the unprogrammed appropriations” in cases of “excess revenue collections in any one of the identified non-tax revenue sources from its corresponding revenue collection target” and “new revenue collections or those arising from new tax or non-tax sources.”
“It means in the unprogrammed appropriations in the 2027 budget, only the FAPs will remain,” said Gatchalian, adding these questions will prevent the Senate from passing an “unconstitutional” national budget.
De Leon said their “initial reading” is that the “excess can still be triggered,” prompting Gatchalian to say the unconstitutional special provisions of the UA need to be replaced with new provisions.
“We commit to work with the Senate and Congress to fine-tune the special provisions for unprogrammed funds to fully subscribe and follow the SC decision,” De Leon said.
In the covered budgets, the UA was increased by Congress from P281.9 billion in the 2024 NEP to P731.5 billion in the 2024 GAA; and P158.7 billion in 2025 NEP to P363 billion in the 2025 GAA.
The executive is proposing P111.98 billion in UA in the 2027 NEP, lower than this year’s level.
As for criticisms that the Local Government Support Fund (LGSF) is a new form of “pork barrel” or discretionary funds, De Leon said the SC had affirmed its constitutionality.
Local government units (LGUs) are only qualified to receive the financial assistance if they comply with good financial housekeeping and reporting requirements in its utilization of the LGSF, particularly the component the Financial Assistance to Local Government Units (FALGU).
Sen. Imee Marcos flagged the increase in FALGU appropriations in her brother’s budget as compared to the previous year’s NEP.
De Leon said the FALGU item was increased because of the administration’s Bawat Bayan Makikinabang and rice distribution programs.
Gatchalian urged the DBM to make the LGSF implementation “transparent, rational and merit-based” because “we don’t want this to be viewed as a pork barrel.”
In a chance interview after the hearing, Senate finance committee chairman JV Ejercito said he is hopeful the SC would reverse its decision that struck as unconstitutional Special Provisions 1(a) and 1(b).
Ejercito said he will be dismayed if the new and excess revenue sources cannot be used to trigger the release of UA, which also funds the Armed Forces of the Philippines modernization program.
Ejercito opposed calls to recall the House of Representatives version of the General Appropriations Bill, saying it would derail the ongoing budget proceedings and run the risk of having a reenacted budget.
Marcos Jr. can veto items- Koko
President Marcos needs to exercise his full constitutional authority and stay alert to prevent another budget fiasco, according to former Senate president Aquilino Pimentel III.
Pimentel, who with the late lawmaker Edcel Lagman successfully challenged the unprogrammed appropriations in the 2024 General Appropriations Act, reminded the President that the Constitution gives him the authority to veto budget line items he deems unfit.
“I hope the Department of Budget and Management teaches him which budget items should be vetoed because there’s no problem with that. It will actually lower our deficit,” Pimentel told “Storycon” on One News yesterday. . – EJ Macababbad