Budget experts are confident the Supreme Court may impose limitations on, if not invalidate, the Unprogrammed Appropriations (UA) in the annual national budgets, whose function was perverted under the term of President Ferdinand Marcos Jr.

The tenor of the questions and presentations of the friends of the court, or amici curiae, pointed to the possibility the UA, as well as certain automatic appropriations, would be declared unconstitutional, Davao City Representative Isidro Ungab, a former House appropriations panel chairperson, said.

Ungab pointed to the special accounts in the general fund and the use of general fund income to increase the number of items that should have been automatic appropriations but were altered by the bicameral conference committee as items the High Court may void.

The alterations resulted in the final budget amount exceeding the proposed National Expenditure Program (NEP) which, under the Constitution, should not happen.

“You should stay within what was submitted by the President,” Ungab stressed.

The objective of the SC’s oral arguments on 7 April was to examine the constitutionality of the UA and related special accounts in the 2024, 2025, and 2026 national budgets.

Four petitions filed by lawmakers and groups, including the late Albay 1st District Representative Edcel Lagman, Caloocan 2nd District Representative Edgar Erice, Mamamayang Liberal Representative Leila de Lima, and others, were consolidated.

The petitioners asked the Court to nullify specific provisions allowing unprogrammed funds, arguing that they violated the Constitution by allowing Congress to effectively increase the national budget beyond what the Executive proposed, contrary to Article VI, Section 25(4), which bars lawmakers from raising the Executive’s recommended appropriations without offsets; treating unprogrammed appropriations as “rider” provisions that do not comply with Article VI, Section 25(2); violating the separation of powers amounting to an undue delegation of legislative authority to the Executive; and failing to specify clear sources of financing, contrary to Article VII, Section 22.

In essence, the oral arguments focused on whether unprogrammed appropriations — originally intended to be flexible “standby” funds for unexpected surpluses, new revenues, or approved loans — have been abused as a mechanism to insert politically favored projects, shift priority items (such as health worker pay, education and AFP modernization) out of guaranteed (programmed) funding, and expand the budget without transparency or accountability.

University of the Philippines School of Economics professor and former Finance Undersecretary for fiscal policy and monitoring, Cielo Magno, held that the UA, a mechanism that was a narrow tool for foreign-assisted projects, had become a backdoor for congressional and executive overreach, sidelining national priorities while ballooning discretionary spending.

“Former National Economic and Development Authority director-general Solita Monsod, former DBM Secretary Benjamin Diokno, former Secretary Butch Abad, and former Senator Frank Drilon all pointed out that the budget is based on the Philippine Development Plan. Everything written in the budget should reflect that plan,” according to Ungab.

What Congress did, through the bicameral conference committee, was to move programmed or priority appropriations, which had already passed through NEDA, the regional development councils, and the Development Budget Coordination Committee, and to relegate these to the UA.

Then the fiscal space that was freed up, meaning the amount vacated when those priorities were moved, was filled in with pet projects (of members of Congress), Ungab added.

In 2013, the SC declared the Priority Development Assistance Fund (PDAF), or the legislative pork barrel, unconstitutional.

Pork resurrection

“As Secretary Monsod explained, this effectively replaced priority programs with legislators’ preferred projects. And as another official noted, this is a new form of pork barrel,” the lawmaker underscored.

The replacements, in turn, skirted NEDA or the DBCC as they were inserted.

The biggest insertions appeared in the 2024 and 2025 budgets. The Department of Public Works and Highways’ budget grew significantly, but there were also increases in the Department of Social Work and Development (including expanded aid programs) and in the Department of Health (including medical assistance for indigents).

“These large insertions resembled the pork barrel,” Ungab said.

The most important items — foreign-assisted projects — were moved. These projects undergo extensive evaluation, including by foreign lending institutions. They are the so-called “big-ticket projects” that significantly contribute to the economy.

They were replaced by smaller, fragmented projects serving as a pork barrel.

Large flood control projects like the Pasig-Marikina River Channel project, worth billions of pesos, were replaced by smaller, piecemeal projects.

“In simple terms, it’s like replacing a superhighway with small local roads. But those small roads don’t solve the overall problem — especially in flood control, where you need a coherent system,” Ungab explained the implication of the reallocations that may have even contributed to the flooding problem.

Magno, meanwhile, explained that the UA had existed since the late 1980s primarily for foreign-assisted infrastructure projects, such as subways, inter-island bridges, and airports, where counterpart funding might not be in place when the budget was passed.

Placing them in the unprogrammed category avoided penalties if loans materialized later. “That’s how unprogrammed appropriations historically worked,” she said.

That restraint, she said, had vanished. Data from recent budgets showed unprogrammed appropriations ballooned under the Marcos administration.

What began as modest standby items exploded in the 2023-2025 General Appropriations Acts. Priority expenditures that should have been programmed — compensation for pandemic-era health workers, free tertiary education, and the modernization of the Armed Forces of the Philippines — were shifted into the uncertain category.

At the same time, Magno said, Congress inserted massive new projects, notably flood-control initiatives that swelled the Department of Public Works and Highways budget by roughly P200 billion during the bicameral deliberations.

“The 2023 and 2024 budgets became very large — and what’s unfortunate is that important items were moved there,” Magno said.

By inflating the UA, lawmakers effectively enlarged the budget without offsetting cuts elsewhere.

Even more troubling, she said, is how these funds are now being released. Traditionally limited to surplus revenue or approved loans, they are increasingly financed by tapping government-owned or controlled corporations such as the Philippine Health Insurance Corp. and the Philippine Deposit Insurance Corp.

Flood control projects, for example, have drawn from PhilHealth surpluses.

Associate Justice Marvic Leonen pressed the point that if unprogrammed items can be funded the moment any revenue stream exceeds targets, what real distinction remained between programmed and unprogrammed spending?