Senator JV Ejercito is advocating for a P74.4 billion supplemental budget to support the government’s push for universal healthcare and zero-balance billing in public hospitals. But the proposal comes at a time when the Philippines is grappling with rising debt and a widening budget deficit, raising the question: Where will the funding come from?

Debt, deficit near critical levels

Latest data from the Bureau of the Treasury show the country’s outstanding debt rose to P17.27 trillion by end-June, up 2.1 percent from the previous month and 11.5 percent higher year-on-year. This already represents 99.5 percent of the government’s full-year debt ceiling of P17.35 trillion.

Of the total, P11.95 trillion (69.2 percent) came from domestic borrowings, while P5.32 trillion (30.8 percent) was sourced externally.

At the same time, the national government’s budget deficit widened to P241.6 billion in June, up nearly 16 percent from June 2024 and 67 percent higher than May.

From January to June, the cumulative deficit reached P765.5 billion, as spending outpaced revenue growth.

Possible funding sources

While the Department of Budget and Management (DBM) has yet to issue formal guidance, several existing mechanisms under government fiscal operations could support a supplemental budget.

Realignment of unused obligations

One is the realignment of unused or unobligated appropriations. If certified by DBM as available, such funds — whether from lower-priority programs or delayed projects — can be rechanneled through a supplemental appropriations measure.

Another possible source is excess revenue collections.

In June, the government’s total revenue reached P306.9 billion, up 3.5 percent from the same period in 2024. This was driven mainly by tax collections, with the Bureau of Internal Revenue posting P200.5 billion and the Bureau of Customs collecting P77 billion.

However, non-tax revenues declined 43 percent year-on-year to P26.8 billion, largely due to a high remittance base in 2024. Income from the Treasury also dropped to P16 billion in June from P83 billion in May.

Should realignments and revenues prove insufficient, the national government may consider additional borrowings to cover the health budget proposal. But doing so could further stretch public finances already under pressure from rising obligations.

Ejercito: ‘Let’s use what we have’

Despite the financial constraints, Ejercito remains firm in pushing for health to remain a top priority.

“If this passes, the P70 billion supplemental budget will be a big help in supporting the President’s call for zero-balance billing,” Ejercito said in Filipino.