Philippines’ Marcos proposes US$118bil budget for 2027
Next year's proposed spending plan is equivalent to 21.7% of gross domestic product, said the Department of Budget and Management.
Manila, Philippines: President Ferdinand Marcos Jr. submitted a budget proposal on Tuesday, requesting approval for a 7.2 trillion-peso (US$118.1 billion) budget for 2027. This budget represents a 6% increase compared to the current year, as his administration aims to revive economic momentum following a significant slowdown and a corruption scandal that has hindered infrastructure spending.
In the second quarter, the Philippine economy expanded by 2.3% from the previous year, marking the weakest growth rate since 2021. This decline was primarily due to a slump in construction and reduced domestic demand, resulting in first-half growth of 2.6%, which fell short of the projected 3.5% to 4.5% target for the year.
The budget allocation for 2027 is equivalent to 21.7% of the country's gross domestic product (GDP), according to the Department of Budget and Management. Education continues to receive the largest share of the budget at 1.15 trillion pesos, although it has decreased by 11.5% from the current year's 1.3 trillion pesos. Healthcare will receive 353.8 billion pesos, which is 21% lower than the 448.1 billion pesos allocated this year, while agriculture funding is set at 261.7 billion pesos, a 13% reduction from nearly 300 billion pesos this year.
The Department of Public Works and Highways, which has been embroiled in an infrastructure scandal, will see its budget rise to 644 billion pesos, a 22% increase from the 530 billion pesos allocated for 2026. This increase comes after the agency's budget was slashed by approximately 40% from the proposed 881 billion pesos in 2026 due to allegations of irregularities in public works projects.
Defence spending is projected to rise to 328.8 billion pesos from the current budget of 305.5 billion pesos, marking a 7.6% increase. Of the proposed budget increase, 316 billion pesos, or nearly four-fifths, will be allocated to cover mandatory obligations such as salary adjustments for military and uniformed personnel.
The government anticipates total disbursements of 6.9 trillion pesos in 2027, compared to projected revenues of 5.2 trillion pesos, resulting in a fiscal deficit of 1.7 trillion pesos. This deficit will need to be financed through borrowing. The government has set a GDP growth target for 2027 to 2030, aiming for 5.0% to 6.0% growth.
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