The budget allocated P26 billion for AKAP, with P21 billion designated for the House of Representatives and P5 billion for the Senate, proving that it was a patronage program.
Political figures are almost always present during the distribution of what are termed social amelioration programs, which are essentially outright doles.
DAILY TRIBUNE file photo
On the surface, the economy is on an even keel with growth exceeding an average 5 to 6 percent a year, supported by a budget that increases geometrically every year.
Government spending, nonetheless, relies on deficit spending backed by debts while an increasing amount is allocated to non-productive dole outs.
Recent government data revealed a troubling rise in government borrowings to support government spending.
The incumbent administration has now recorded the highest monthly average debt increase among recent administrations, including the previous regime of President Rodrigo Duterte that faced bigger fiscal challenges, such as addressing the Covid-19 pandemic and the 2017 Marawi siege.
According to the Bureau of Treasury data, from June 2022, when President Ferdinand Marcos Jr. took office, to last April, the national debt increased from P12.79 trillion to P16.75 trillion, a rise of approximately P3.96 trillion over 34 months. This translates to a monthly average increase in debt of P116.47 billion.
The total debt means each of the 112.6 million Filipinos owe P147,653 to banks and other financial institutions.
In contrast, the Duterte administration, from 2016 to 2022, increased the debt level from P5.9 trillion to P12.79 trillion or P95.83 billion per month.
Under the late President Benigno Aquino III, from 2010 to 2016, debts grew from approximately P4.7 trillion to P5.9 trillion, averaging about P16.67 billion per month.
During the nine years of President Gloria Arroyo’s administration, from 2001 to 2010, obligations rose from P2.2 trillion to P4.6 trillion, or about P22.22 billion per month.
By June 2022, before President Marcos took office, the national debt stood at P12.79 trillion, more than double that of President Aquino. The rapid increase was driven by borrowings to address the pandemic response, which required significant spendings on social amelioration programs, healthcare, and economic stimulus.
The community lockdowns deprived the economy of activity, leading to a sharp 9.5 percent contraction in the gross domestic product in 2020, which reduced government revenues that means the budget was augmented by a huge debt pile.
The “Build Build Build” infrastructure program also relied heavily on loans, contributing to higher obligations.
While the Marcos administration has prioritized economic recovery following the Covid disruptions that led to growth rebounding to 8.3 percent in the first quarter of 2022, the priority quickly turned to the provision to hand outs to the poor that cultivates political patronage.
Major projects, such as railways, airports and energy facilities, were pursued under the rebranded “Build, Build More” initiative, but a huge chunk of the budget went to pork barrel projects.
The debt-to-GDP ratio slightly declined from 61 percent in June 2023 to 60.9 percent in mid-2024.
The indicator, however, worsened to 62 percent in the first quarter of the year after an increase in borrowing supposedly to “frontload expenditures.”
The period coincided with the time when questions were raised about the misuse of the budget, such as the increase in unappropriated allocations to accommodate pork barrel projects ahead of the midterm polls.
The ratio remained above the 60 percent global norm for the economy to be sustainable despite the high debt level, indicating potential risks.
According to data from the Asian Development Bank and the International Monetary Fund for 2023, Indonesia has a debt-to-GDP ratio of 39.9 percent, with monthly debt increases lower than those of the Philippines, due to a smaller budget deficit.
Thailand has a ratio of 61.4 percent, similar to the Philippines, but with a lower debt growth.
Malaysia’s debt profile was at 67 percent, but more substantial fiscal revenues and export performance support it.
Automatic debt servicing limits funds for education, healthcare and poverty alleviation.
The rising figure may indicate a failing strategy, as economic growth lags behind debt accumulation. To accommodate rising borrowings, mostly from domestic sources, the GDP will need to grow at a clip of 6.5 percent to 8 percent.
Doles and more of these
Filipinos were witness to the massive diversion of funds from legitimate programs to the patronage-driven Ayuda sa Kapos ang Kita Program (AKAP), Assistance to Individuals in Crisis Situation (AICS) and the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD).
As a consequence, legitimate services such as those rendered by the Philippine Health Insurance Corp. (PhilHealth) were sidetracked after they were denied subsidies in the 2025 General Appropriations Act, the result of the bicameral conference committee’s work.
Key infrastructure, such as the subway project, which was also affected by the reallocations, were also delayed.
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