No budget safe with thieves
The sliver of fiscal space is almost exactly equal to what the government owes in interest payments alone for the coming year.
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The sliver of fiscal space is almost exactly equal to what the government owes in interest payments alone for the coming year.
When the Marcos administration touted its P7.2-trillion National Expenditure Program as a record-high figure, roughly six percent higher than this year’s P6.8-trillion budget, President Ferdinand Marcos Jr. called it “a prudent and forward-looking investment that sustains economic growth.”
But public finance expert Zy-za Nadine Suzara said the proposed budget leaves hardly enough for investment. With debt payments consuming a huge portion of the total, the government is left with only about 16 percent, or roughly P1.15 trillion, for new and urgent programs.
Suzara, a guest on last Wednesday’s DAILY TRIBUNE online program Straight Talk, dissected the proposed budget and noted that the development agenda outlined at the start of the Marcos administration has, in practice, been largely abandoned.
The sliver of fiscal space, she pointed out, is almost exactly equal to what the government owes in interest payments alone for the coming year, which means the Philippines is essentially budgeting itself into a corner where debt servicing, local government transfers and the basic cost of running the bureaucracy swallow up a vast portion of public funds.
Suzara traces this shrinking fiscal space directly to the country’s growing debt burden, noting that interest payments alone have climbed from over P800 billion in 2025 to P950 billion this year and now to P1.1 trillion in the 2027 proposal.
The huge portion of debt payments was linked to years of fiscal mismanagement, including the raiding of Philippine Health Insurance Corp. (PhilHealth) and Philippine Deposit Insurance Corp. funds, the flood control ghost projects, and the broader pattern of Unprogrammed Appropriations (UA) pushing the government to borrow more than it should.
Debt servicing, she explained, is an invisible tax on the future, since every peso spent paying the interest on debt is a peso that cannot go toward agencies tasked with building human capital, supporting livelihoods, or boosting agricultural productivity.
In the narrow 16 percent of discretionary space, moreover, Suzara estimated, around 37 percent, or more than P400 billion, is earmarked for populist and patronage-driven programs, or soft pork, tucked into agencies like the Department of Social Welfare and Development and the Department of Health, alongside hard pork infrastructure.
Legislators’ usual pet projects are traditionally associated with the Department of Public Works and Highways and the Department of Agriculture.
A newer wrinkle to this pattern is the Local Government Support Fund, a discretionary pool that is not a constitutionally mandated share of local government revenue but has nonetheless ballooned since legal challenges against the UAs began, and which she says disproportionately benefits vote-rich, already wealthy regions like Metro Manila, CALABARZON and the Central and Ilocos regions rather than the poorer localities the fund is supposedly designed to equalize.
She pointed to the disproportionate distribution as evidence that the budget remains shaped more for the exigencies of the coming elections.
UAs, the budgetary mechanism that lets the government spend beyond its stated deficit ceiling whenever it claims to have found windfall or excess revenue, remain despite the public outrage they generated.
Drawing on data submitted to the Supreme Court challenging the pork receptacle in the budget, more than P400 billion in supposed excess revenue was funneled through this channel.
It should have been used to reduce the fiscal deficit as intended. That would have lowered borrowings and preserved a wider, healthier fiscal space today.
She likened the practice to a household that receives a one-time bonus but, instead of using it to pay down debt, takes it as an excuse to spend even more.
Without a High Court ruling to curb the practice, the perversion of the 2027 budget is almost inevitable, particularly with a pre-election spending plan at stake.
The crooks in government cannot be trusted to wield public funds in a truly “people-oriented” manner.
