[In This Economy] Debunking misleading claims about the 2026 budget

Consummatum est. It is finished.

On January 5, President Ferdinand Marcos Jr. signed the 2026 General Appropriations Act (GAA), confirming that for the first few days of the year, the government ran on a reenacted budget.

As expected, President Marcos and congressional leaders couldn’t be prouder of the signing. But I think it’s important to push back against the many misleading statements and narratives they have issued about the new budget. It’s not as squeaky clean as they claim.

Highest budget ever?

At P6.793 trillion, the 2026 budget is the largest ever in history. But in fact, you can say that’s the case for every budget, because it never goes down from one year to the next. So boasting that the 2026 budget (or any component of it) is the “highest ever,” is no news at all, and not something to be proud of by itself.

President Marcos in his signing speech boasted that, “Education receives the highest allocation — amounting to over PhP1.34 trillion…. The 2026 GAA also has the largest health sector budget ever in the history of our country — P448.125 billion…” Again, you can say that for the entire budget and any of its major sectoral components.

Many politicians are parroting the view that the education budget, for the first time ever, exceeded 4% of gross domestic product (GDP). But as I keep saying, this is only possible because of the dubious way by which the House of Representatives did the computation (including the Philippine National Police Academy, Philippine Military Academy, etc.). Take away those agencies and the truer number comes at less than 4%, based on the People’s Budget Coalition’s estimates.

Aligned with development plan?

President Marcos said, “Totaling P6.793 trillion, the National Budget is aligned with our medium- and long-term development plans and vision, reflecting our investment in the Filipino.”

If this were true, then the government should prioritize spending on sectors that constrain Philippine development, including education, health, ease of doing business, infrastructure, and social protection.

While education still takes the lion’s share of the budget, and local flood control projects have been removed, the 2026 budget prioritizes instead many patronage-driven allocations, including road networks, untargeted ayuda, and the Local Government Support Fund (LGSF). These benefit politicians at the local level, and aren’t necessarily needed nor efficient.

A significant chunk of funding for foreign-assisted projects (including big-ticket infrastructure) remains in the unprogrammed appropriations. There are also dubious budgets for confidential and intelligence funds and NTF–ELCAC. On paper you might say these allocations help development. But who are we kidding? Based on past experience, these slush funds, amounting to tens of billions of pesos, can be used willy-nilly and are highly discretionary.

Cleanest ever? Pork-free?

Senate President Vicente Sotto III said, “I know the 2026 budget is by far the cleanest ever but it seems the President wants it squeaky clean. He even highlighted the Senate provision that prevents political patronage by politicians.” 

Meanwhile, congressional leaders like Senate finance committee chair Sherwin Gatchalian and House appropriations chair Mikaela Suansing are wont to say that the 2026 budget is “pork-free.”

The thing is, politicians seem to be espousing an overly narrow definition of pork. To them, pork is anything involving discretionary funds. But pork has evolved in the wake of the 2013 Supreme Court decision, so that politicians identify projects before the budget is finalized.

Pork has always come in two variants: hard and soft. “Hard” pork now is in the form of “allocable” infrastructure projects in agencies like the Department of Public Works and Highways. Farm-to-market roads under the Department of Agriculture might also be considered hard pork, too. 

“Soft” pork, on the other hand, comes in discretionary ayuda projects (like MAIFIP or Medical Assistance for Indigent and Financially Incapacitated Patients, AICS or Assistance to Individuals in Crisis Situation, TUPAD or Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers, etc.) — proceeds of which are doled out by relevant agencies at the behest of politicians.

In short, there’s still “hard” and “soft” pork in the 2026 budget. Nothing has changed. It’s not pork-free by any means.

Unprogrammed funds clearly-defined?

Budget watchdogs and media are rightly zeroing in on unprogrammed appropriations (UA). The Department of Budget and Management, responding to critics, said in a statement that UA are “constitutional [and] clearly-defined.” They added that UA “may only be released upon the occurrence of clearly defined fiscal conditions and [is] subject to strict validation and control mechanisms,” and UA “is not a lump-sum fund nor a blank check for spending.”

UA is not so worrisome in 2026. After the veto of President Marcos totaling P92.5 billion, it’s been whittled down to a little over P150 billion. He described this as the “lowest since 2019” and the “bare minimum.” The three remaining UA items are: support to foreign-assisted projects (P97.3 billion), program on risk management (P3.6 billion), and revised AFP modernization program (P50 billion).

I concede that discretionary lump-sum funds, previously called SAGIP (Support for Infrastructure Projects and Social Programs of the National Government), have also been removed.

But issues remain. First of all, vetoing most of UA (like what President Marcos did for the 2025 budget) doesn’t amount to anything, because to begin with, UA are standby funds. UA can’t be spent on unless there are excess revenues (which never happens) or new loans. The reason UA became worrisome in past years is that Congress sneakily inserted a provision in the 2024 budget that allowed the cash sweep of government corporations like PhilHealth and the Philippine Deposit Insurance Corporation. That provision is no longer in the 2025 and 2026 budgets.

More worrisome is the fact that UA remains a receptacle of projects and programs that should arguably be put in programmed funds, and they do this to make room for their pork in the programmed funds. In the future, who’s to say that politicians won’t abuse UA again and put discretionary funds there? That’s why legal challenges to declare UA as unconstitutional are most welcome.

Many big-ticket projects are also stalled by putting funds in the UA. In a 2024 report, the Department of Economy, Planning, and Development (DEPDev) said, “Delays in providing government counterpart funds remain a recurring bottleneck in project implementation.” For 2026, the government did the very same. Expect severe traffic congestion to worsen, because many train projects will continue to be delayed.

All in all, don’t take at face value what politicians are saying about the 2026 budget. It’s only marginally cleaner than the 2026 budget, and many reforms are just for show. But that’s the nature of reforms, especially when it comes to deeply entrenched problems: incremental and snail-paced. We just have to keep at it every year. – Rappler.com

Dr. JC Punongbayan is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. In 2024, he received The Outstanding Young Men (TOYM) Award for economics. Follow him on Instagram (@jcpunongbayan).