DBM identifies projects under 'historic low' P111.9-B unprogrammed appropriations for 2027

The Department of Budget (DBM) on Friday touted the "historic low" unprogrammed appropriations (UA) of the proposed P7.2-trillion national budget for 2027 as it signaled a direction toward further reducing controversial item.

Speaking at the Economic Journalists Association of the Philippines (EJAP) Economic Forum in Manila, Budget Secretary Kim Robert de Leon said that for next year, "the proposed unprogrammed appropriations stand at P111.984 billion, or only 1.6% of the total expenditure program."

"Let me put that number in historical perspective —this is the lowest proposed UA at the NEP (National Expenditure Program) in nominal terms since 2019, and the lowest UA-to-total-expenditure-program ratio since 1991," de Leon said.

On Tuesday, the President Ferdinand "Bongbong" Marcos Jr. formally submitted to the 20th Congress the proposed P7.2-trillion national budget for fiscal year 2027.

In the proposed 2027 spending plan, the DBM set the UA at P111,984,494,000.

The UA gained notoriety as it was among the contentions in the controversial 2025 General Appropriations Act (GAA) amid allegations of insertions in the bicameral conference committee phase—an issue that compelled both chambers of Congress to open the panel's meetings to the public for the 2026 national budget.

Under the 2026 GAA, President Ferdinand "Bongbong" Marcos Jr. vetoed nearly P92.5-billion worth of line items under the unprogrammed appropriations.

The DBM defines unprogrammed appropriations as those that provide standby authority to incur additional agency obligations for priority programs or projects when revenue collection exceeds targets, and when additional grants or foreign funds are generated while appropriations with definite/identified funding as of the time the budget is prepared.

In simple terms, unprogrammed appropriations are akin to planned household purchases that may only proceed if extra money is available, either from additional income, like bonuses or from loans.

Under 2027 NEP, the specific projects to be funded under UA are as follows:

• Restoration of the Fund Balances of the Philippine Deposit Insurance Corp. (PDIC) — P57,000,000,000
• Program on Risk Management — P3,600,000,000
• Support for Foreign-Assisted Projects — P42,553,494,000
• Conversion of National Government Advances into Subsidy for GOCCs — P8,831,000,000

"On the standy provision for the partial restoration of the initial remittance of PDIC… this may have a slight relationship with the return of the PhilHealth remittance that we did for the 2026 budget," De Leon said.

To recall, the Supreme Court ordered the return of P60 billion in excess funds transferred to the national treasury back to the Philippine Health Insurance Corporation (PhilHealth) through the 2026 General Appropriations Act (GAA).

This was in relation to the DOF Circular 003-2024 which ordered the return of funds from PhilHealth at P89 billion and from PDIC at P107 billion to the treasury. These funds were tied to unprogrammed appropriations in the controversial 2025 GAA.

For support to foreign-assisted projects, the Budget chief said these projects are "still being evaluated within the ICC (Investment Coordination Committee) or the ED (Economic Development) Council so the loan proceeds component is lodged under the unprogrammed appropriations while of course, the GOP (government) counterpart is already part of our NEP."

"This ensures, since these are priority projects, we will be able to commence with the preliminary works including right of way acquisition, even as we wrap up the preparation for the signing of loan agreements from our development partners," De Leon said.

The Budget chief said the DBM is reviewing and going back to the basic on the proper use, utilization, and purposes of the unprogrammed appropriations "because there's still a pending case before the Supreme Court."

Last month, the SC concluded the oral arguments on unprogrammed appropriations in the 2024, 2025, and 2026 national budgets after six hearings.

The hearings stemmed from the petitions were filed by the late Albay representative Edcel Lagman, former Camarines Sur representative Gabriel Bordado Jr., former Basilan representative Mujiv Hataman, former senator Aquilino "Koko" Pimentel III, and former Davao del Norte representative Pantaleon "Bebot" Alvarez.

They are seeking to declare as unconstitutional the bicameral insertion of P449.5 billion in the 2024 GAA.

Another petition was filed by the Filipinos for Peace, Justice, and Progress Movement Inc., seeking to assail the amendments allegedly made to the Special Accounts in the General Fund and other appropriations in the 2025 GAA.

A third petition was filed by Caloocan 2nd District Representative Edgar Erice and Mamamayang Liberal Representative Leila De Lima. They questioned the constitutionality of unprogrammed appropriations in the 2026 GAA.

"That's why we're really rationalizing on the purpose, use, and need for UA. Taking into account the medium-term macroeconomic indicators that the budget should be sensitive of," De Leon said.

'The lower, the better'

The Budget chief said the DBM is "working towards a more disciplined budget so the lower, the better."

"We really have to consider the overall fiscal space that we have. If we have an elbow room to work on and also the pipeline of projects we are supposed to implement, the possibility of having even less [than 1%] of UA is not impossible… that's why for 2027, we really made sure that the purposes would really be very limited," he said.

De Leon clarified that unprogrammed "does not mean unaccounted for."

"It is not a blank check, and it is certainly not an unlimited spending authority. It has clear purposes and well-defined triggers prior to release," the Budget chief.

"But as you know, budget discipline cannot stop at budget preparation. The real test comes when money begins to move. That is why transparency, integrity, and accountability must be built into every stage of the budget process. Transparency should not begin only when there is already a scandal; it must be built into the system before every single peso is spent," he added.

The DBM, de Leon said, is implementing the new Government Procurement Act, "which strengthens competition, transparency, and accountability through mechanisms such as open contracting, public and civil society monitoring, video recording of procurement proceedings, and disclosure of beneficial owners of companies participating in government bidding." — VDV, GMA News