The Constitution’s guardrails for the public purse

Public finance rarely captures public attention unless something goes wrong. A controversial insertion in the national budget. A large infrastructure project with questionable costs. A sudden surge in public debt. Or a dispute between the Executive and Congress over spending priorities.

Yet the national budget is the most important policy instrument of government. It determines how public resources are mobilized and how they are spent to advance national development.

This column will examine the national budget and broader public finance issues through one guiding question: Are the guardrails of the public purse working?

The Constitution of 1987 did not treat the national budget as a mere accounting exercise. It established a structured process designed to balance political negotiation with fiscal discipline.

At the heart of that design is a simple but powerful idea: the national budget is not just a spending bill. It is the financial translation of the government’s development program for a given year.

Article VII, Section 22 of the Constitution requires the President to submit to Congress “a budget of expenditures and sources of financing.” This means the budget must be a financed fiscal program — a coherent plan that links spending priorities with identifiable sources of revenue and financing.

In practice, this fiscal program is expressed through the Budget of Expenditures and Sources of Financing (BESF) and the National Expenditure Program (NEP). These documents translate the administration’s development strategy into allocations for agencies, programs, activities, and projects.

Congress then exercises the power of the purse. Legislators may reduce appropriations, reallocate funds, and introduce new programs funded by reductions elsewhere.

Budget deliberations therefore become a site of political negotiation.

When Congress is aligned with the administration, the budget often reflects the President’s priorities. When Congress is controlled by the opposition, the budget becomes a contest over competing visions of national priorities.

That contest is not a flaw in the system. It is part of democratic governance.

But the Constitution places limits on how far it can go.

Article VI, Section 25 provides that Congress may not increase the appropriations recommended by the President and that appropriations must remain as specified in the budget submitted to Congress. These provisions ensure that legislative changes do not erase the fiscal program the President is constitutionally required to prepare.

In other words, Congress has the power of the purse — but the purse must still reflect the fiscal program the President is mandated to propose.

This constitutional balance is essential.

The national budget should remain the financial translation of a coherent national plan. When legislative changes become so extensive that the enacted budget no longer reflects that plan, the constitutional architecture of budgeting begins to strain.

Similarly, when spending authority arises outside the financed fiscal program — through mechanisms that activate appropriations only during budget execution — the integrity of the budget process is also put at risk.

These issues are not merely technical matters for economists and accountants. They go to the heart of fiscal governance and democratic accountability.

In the weeks ahead, this column will examine how the country manages the public purse — from budget preparation and congressional deliberations to debt management, fiscal transparency, and the design of major spending programs.

Public money is, after all, the people’s money.

Following how it is raised, allocated, and spent is one of the most important tasks of democratic governance.

Florencio B. Abad was formerly chairman of the Committee on Appropriations of the House of Representatives and secretary of the Department of Budget and Management. Currently, he is professor of Praxis at the Ateneo School of Government and senior professional lecturer at the De La Salle Tañada-Diokno School of Law.