Manila: The Marcos administration is eyeing a PHP7.2-trillion national budget for 2027, which is equivalent to 21.7 percent of the country's gross domestic product (GDP).
According to Philippines News Agency, the proposed 2027 budget is higher by six percent or PHP407 billion than the PHP6.793 trillion national budget for 2026, based on National Budget Memorandum (NBM) 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 memorandum emphasized that the proposed budget for next year will focus on programs, activities, and projects (PAPs) aimed at creating better opportunities and addressing the needs of the Filipino people, ensuring a more resilient and secure future for all. De Leon stated that agency budget proposals underwent a careful review with the goal of allocating more funds for productive and key development expenditures.
De Leon highlighted that agency absorptive capacity and implementation readiness would be considered when appropriating funds for new and expanded PAP proposals. The move aims to ensure that every budgeted peso translates to meaningful and tangible accomplishments. In crafting the proposed fiscal year 2027 budget, the government is confronted with a narrow fiscal space, further constrained by funding pressures from automatically appropriated items, such as the National Tax Allotment shares of local government units and interest payments, as well as the requirements of newly-enacted laws and recurrent mandatory expenditures.
De Leon stressed the importance of pre-construction activities, government counterpart funds for foreign-assisted projects, and remaining funding requirements needed to accelerate the completion of ongoing flagship projects. This prioritization aims to facilitate the timely implementation of infrastructure projects and maximize their economic multiplier effects.
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. 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 challenges from the Middle East conflict, El Ni±o phenomenon, and climate change.
The government acknowledged that current macroeconomic conditions and geopolitical developments have affected the credibility and relevance of the growth targets and fiscal projections in the Updated FYs 2026 to 2030 Medium-Term Fiscal Framework, approved and published by the DBCC in October 2025. Issues like anomalies in flood control projects and the conflict involving the United States, Israel, and Iran have impacted the country's macroeconomic fundamentals, constraining the government's ability to meet revenue targets, sustain economic growth, and address key development gaps.
The Philippine economy grew by 4.4 percent 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 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 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 percent of GDP in 2026 to 3.5 percent 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 noted that reducing non-essential maintenance and other operating expenses can minimize budgetary pressures and 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.
