Tighter rules for unprogrammed funds sought

By Adrian H. Halili and Chloe Mari A. Hufana, Reporters

THE PHILIPPINES’ Finance chief said the proposed 5% cap on unprogrammed funds is excessive, as the Marcos administration faced renewed scrutiny over their use amid a multibillion-peso infrastructure scandal.

“A 5% limit is too big for the National Government,” Finance Secretary Ralph G. Recto told reporters on the sidelines of a Senate budget hearing on Tuesday. “We can probably implement a benchmark — it’s something we can look into.”

Asked if a 2% threshold would be sufficient, he said: “Maybe.”

Budget Secretary Amenah F. Pangandaman earlier said she wanted to limit unprogrammed appropriations to 5% of the national budget. These standby funds can only be used if revenue collections exceed targets or if more grants or foreign funds become available.

Mr. Recto said the funds should be reserved for “unforeseen situations” such as disasters or foreign-assisted projects excluded during the budget preparation.

“The government should respond quickly [to calamities] — you cannot really program for that,” he said, adding that the President should have flexibility to release funds for emergencies.

Under the proposed 2026 national budget, unprogrammed appropriations amount to P250 billion, largely earmarked for pre-planned initiatives instead of emergency contingencies.

Major allocations include P80.9 billion for infrastructure and social programs, P97.3 billion for foreign-assisted projects, P50 billion for the Armed Forces modernization and P6.7 billion for health emergency allowances.

Meanwhile, Malacañang defended the inclusion of unprogrammed funds, saying they serve as a fiscal buffer rather than a political tool.

“The budget will be handled carefully and will not be released immediately — contrary to fears that it will become a pork barrel fund,” Palace Press Officer Clarissa A. Castro told a news briefing in Filipino.

She said the Department of Budget and Management (DBM) considers unprogrammed funds a “safety net” to supplement the National Disaster Risk Reduction and Management Council (NDRRMC) fund when disaster costs rise.

“When contingent funds are depleted, that’s when we draw from unprogrammed appropriations,” Ms. Castro said.

The House of Representatives on Monday approved on third reading the proposed P6.7-trillion General Appropriations Bill for 2026 amid criticism from the opposition. The Makabayan bloc said the measure perpetuates the “pork barrel” system that enabled misuse of public work funds.

Lawmakers removed P35 billion in unprogrammed appropriations for infrastructure, leaving P45 billion for the Strengthening Assistance for Government Infrastructure (SAGIP) and Social Programs.

House appropriations committee Chairperson Mikaela Angela B. Suansing said the adjustment aims to prevent fund diversion while maintaining support for foreign-assisted projects that require counterpart funding.

Ms. Castro dismissed opposition claims that unprogrammed funds could again be abused, noting that President Ferdinand R. Marcos, Jr. has ordered a probe into anomalies in flood-control and other infrastructure projects.

“With the President leading the probe into irregularities, we can expect even greater vigilance in managing the budget,” she said. “The administration will ensure that these funds are used properly and not wasted.”

Mr. Marcos created the Independent Commission for Infrastructure (ICI) to investigate the multibillion-peso fraud, which he flagged in his state of the nation address in July. The commission has since been holding hearings to trace irregularities in project funding.