By Ruth Abbey Gita-Carlos | Philippine News Agency
The Marcos Jr. administration is eyeing a P7.2-trillion national budget for 2027, which is equivalent to 21.7% of the country’s gross domestic product (GDP).
The proposed 2027 budget is higher by six percent or P407 billion than the P6.793 trillion national budget for 2026, based on National Budget Memorandum (NBM) No. 158 issued by the Department of Budget and Management (DBM) on Thursday.
The budget memorandum, signed by DBM acting Secretary Kim Robert de Leon, was posted on the agency’s official website on Friday.
“The proposed budget for next year will focus on programs, activities and projects (PAPs) that seek to create better opportunities and address the needs of the Filipino people, helping ensure a more resilient and secure future for all,” the memorandum read.
De Leon said agency budget proposals underwent a careful review, with an “overarching goal of providing more funds for productive and key development expenditures.”
He said agency absorptive capacity and implementation-readiness would be taken into consideration when appropriating funds for new and expanded PAP proposals.
The move, de Leon said, aims to ensure that “every budgeted peso translates to meaningful and tangible accomplishments.”
“In crafting the proposed FY (fiscal year) 2027 budget, the government is confronted with a very narrow fiscal space, further constrained by funding pressures from automatically appropriated items, such as the National Tax Allotment shares of LGUs (local government units) and interest payments, as well as the requirements of newly-enacted laws and recurrent mandatory expenditures,” the memorandum read.
“As such, all proposed PAPs should have undergone the necessary review and approval by relevant oversight agencies or committees within the prescribed budget preparation timelines to be considered for funding in the proposed FY 2027 Budget,” it added.
De Leon stressed that pre-construction activities, government counterpart funds for foreign-assisted projects, and remaining funding requirements needed to accelerate the completion of ongoing flagship projects will be prioritized.
This will facilitate the timely implementation of infrastructure projects and maximize their economic multiplier effects, de Leon said.
NBM 158 was issued based on macroeconomic assumptions and fiscal aggregates contained in the Development Budget Coordination Committee (DBCC) Ad Referendum Approval dated June 16.
Recalibrating fiscal policy
Meanwhile, the DBCC sought the recalibration of the national government’s fiscal policy to spur economic growth and support vulnerable sectors, as the country faces various challenges brought about by the Middle East conflict, El Niño phenomenon, and climate change.
This, as the government acknowledged that the current macroeconomic conditions and geopolitical developments “have increasingly undermined” the credibility and relevance of the growth targets and fiscal projections in the Updated FYs 2026 to 2030 Medium-Term Fiscal Framework, which was approved and published by the DBCC in October 2025.
“The issues surrounding alleged anomalies in flood control projects last year and, more recently, the conflict involving the United States, Israel, and Iran made a drastic impact on the country’s macroeconomic fundamentals,” the memorandum said.
“These further constrained the national government’s ability to meet its revenue targets, sustain economic growth, address key development gaps, and consolidate gains from past structural reforms and poverty reduction efforts.”
The Philippine economy grew by 4.4% in 2025, demonstrating resilience despite shifting global trade dynamics and persistent external headwinds.
The slowdown was largely attributed to climate-related disruptions, concerns over anomalous flood control projects, and broader global economic uncertainties, which collectively dampened construction activity and private consumption.
Deficit targets for 2026 to 2030 were revised upward to reflect a more realistic fiscal stance, while remaining fully aligned with growth-enhancing fiscal consolidation.
Despite this, the deficit path will continue to decline by an average of 0.5 percentage points annually, from the programmed level of 5.4% of GDP in 2026, to 3.5% of GDP by 2030.
De Leon emphasized that effective prioritization of expenditures, alongside efficiency and sustainability measures, will be crucial in ensuring fiscal discipline.
He added that the reduction in non-essential maintenance and other operating expenses can help minimize budgetary pressures and help ease the debt burden, while making additional funds available for high-impact expenditures.
“These initiatives must be complemented by ensuring strict compliance with the provisions of the New Government Procurement Act, expediting the implementation of the Government Optimization Program, and facilitating full devolution,” he said in the memorandum.
