Alert flags were strikingly raised in the recent fiscal assessment of the Development Budget Coordination Committee (DBCC), the highest economic agency that President Ferdinand Marcos Jr. regularly consults.

The DBCC said the proposed budget for 2026 would be P6.793 trillion, a 7.4-percent increase from this year’s P6.326 trillion.

The priority in 2026, the economic team said, would be quality education, healthcare, and workforce upskilling.

While proposed expenditures were raised, all economic and fiscal assumptions were slashed.

The target growth range was reduced by 0.5 percent due to “global headwinds,” referring to the ongoing conflicts in key global regions that are affecting trade, primarily impacting oil prices.

What was not said, however, would likely have a more profound effect on the reconfigured indicators.

Budget Secretary Amenah Pangandaman, DBCC head, said revenue collections are expected to increase steadily “in the last half of the Marcos administration and are expected to reach 16.3 percent of the gross domestic product (GDP) by 2028.”

Of course, the figure was an assumption, and the current administration has a poor batting average when it comes to hitting targets, such as missing its growth goals the past two years.

The budget secretary said the implementation of recently enacted revenue reforms would increase revenues.

Department of Finance (DoF) officials, however, were singing a different tune.

Finance Assistant Secretary Karlo Fermin Adriano said collection targets this year and the next are being adjusted in line with projected lower GDP growth figures.

If tax and duty collections scale down, deficit spending increases, following the trajectory from the start of the current administration.

Still, Pangandaman made a commitment that the fiscal deficit will be reduced from 5.5 percent of GDP in 2025 to 4.3 percent by 2028 through “fiscal discipline.”

With the projected drop in revenues, the DBCC is fixing its sights again on “more non-tax revenue.”

This means taking money from government-owned and -controlled corporations (GOCC), a practice that has spurred scandals, one particularly in the 2024 pre-election budget from which the Department of Finance swept up the “excess funds” of state firms.

State agency Philippine Health Insurance Corp. (PhilHealth) suffered a double whammy after the DoF took P60 billion from it, branding the money as idle funds, and it was defunded of more than P70 billion in subsidies earmarked for poor and senior Filipinos.

The remaining shortfall in the budget will be covered through additional borrowing. Finance Secretary Ralph Recto estimates the financing program (borrowings in layman’s terms) of the government this year would increase to about P2.6 trillion, from the previous target of P2.55 trillion, to plug the gap.

Tax payments are strong indicators of confidence and efficiency in government. The Philippines has one of the lowest tax-to-GDP ratios in the region, mainly due to corruption.

Since the economy was growing at more than six percent before the current administration and at a rate of less than five percent lately, government collections should be increased to approximately the same level, rather than show decline or low growth.

Taxpayers, however, feel cheated by the perennial budget manipulation to accumulate the pork barrel for members of the Senate and the House of Representatives.

Every peso pocketed by government officials erodes the confidence of the public who are discouraged from paying their hard-earned money in taxes.