BEYOND BUDGET

Assalamu alaikum wa Rahmatullahi wa Barakatuh.

Last July 29, I was honored and privileged to submit the Fiscal Year (FY) 2025 National Expenditure Program (NEP), or the proposed national budget of President Ferdinand R. Marcos Jr. (PBBM), to Congress. It amounts to ₱6.352 trillion, equivalent to 22.1 percent of Gross Domestic Product and higher by 10.1 percent than the ₱5.768 trillion 2024 budget.

While there may be an increase of 10.1 percent from the 2024 budget, let me note that the ₱6.352 trillion proposed budget is 69 percent of the ₱9.2 trillion total budget proposed by agencies, consistent with the budget ceiling set by the Development Budget Coordination Committee. Due to our limited fiscal space, we prepared the 2025 NEP considering the absorptive capacity of the agencies, implementation readiness of the programs, activities, and projects, and their alignment with the Philippine Development Plan (PDP) 2023-2028 and the President’s 8-Point Socioeconomic Agenda, as well as the Three-Year Rolling Infrastructure Program (TRIP), the Information Systems Strategic Plan (ISSP), and Program Convergence Budgeting (PCB).
As PBBM highlighted during his third State of the Nation Address just a week before the NEP submission, “Guided by strong fiscal discipline, our proposed government budget was crafted with utmost care, diligence, and meticulous attention.” We are focusing on smart spending and economic recovery, decreasing our deficit while maximizing every centavo of the revenue we raise.

The PBBM Administration’s ultimate goal is to respond to our kababayan's basic needs and position the Philippines as a booming, competitive, and equitable country, where the people are empowered to achieve their ambitions — hence, the theme “Agenda for prosperity: Fulfilling the needs and aspirations of the Filipino people.” 

To support our nation’s economic and social transformation that fosters a robust Philippines, we are building on the progress of the past two years, anchored on the three pillars of the PDP 2023-2028. Pillar 1 aims to “Develop and Protect the Capabilities of Individuals and Families,” promoting human and social development, reducing vulnerabilities, protecting purchasing power, and increasing the income-earning ability of Filipinos. Meanwhile, Pillar 2 aims to “Transform Production Sectors to Generate More Quality Jobs and Competitive Products,” by modernizing agriculture and agri-business; revitalizing industries; reinvigorating services; and advancing research and development, technology, and innovation. Finally, Pillar 3 seeks to “Create an Enabling Environment,” institutionalizing good governance and improving bureaucratic efficiency.

Looking at the budget dimension by sector, to ensure inclusivity, the Social Services will receive the bulk of the budget pie with ₱2.121 trillion (33.4 percent); toward sustainability, the Economic Services with ₱1.853 trillion (29.2 percent); General Public Services with ₱1.083 trillion (17 percent); Defense with ₱419.3 billion (6.6 percent); and Debt Burden, ₱876.7 billion (13.8 percent).

By expense class, we allotted almost ₱2.421 trillion (38.10 percent) of the total expenditure program (TEP) to Maintenance and Other Operating Expenses, higher by ₱145.94 billion, or 6.42 percent, than the ₱2.275 trillion 2024 budget. Meanwhile, almost ₱1.757 trillion (27.66 percent) was allotted for Personnel Services, a ₱273.57 billion increase, or 18.44 percent higher than the ₱1.483 trillion allocation in this year’s budget. On the other hand, we allotted Financial Expenses with ₱848.07 billion (13.35 percent), up by ₱177.54 billion, or 26.48 percent from this year’s ₱670.53 billion; and Capital Outlays and Net Lending with almost ₱1.327 trillion (20.89 percent), a slight decrease of ₱12.26 billion, or 0.92 percent, from the ₱1.339 trillion budget this year.

Further, the proposed FY 2025 budget prioritizes National Government Agencies, allocating ₱4.116 trillion, increasing by ₱256.66 billion, or 6.65 percent, compared to the FY 2024 level, to support the operations and implementation of various programs and projects across the departments and agencies. On the other hand, local government units (LGUs) will receive ₱1.184 trillion, marking a 17.09 percent increase from this year’s budget, to support local governance and development efforts. Budgetary support for Government-Owned or -Controlled Corporations totals ₱204.48 billion, including subsidies, equity, and net lending. Lastly, ₱848.03 billion is allocated for interest payments to address higher borrowing costs and the impact of previous and ongoing loans that support health emergencies and infrastructure development needs.

Thus, we extend our gratitude to the House of Representatives, led by Speaker Martin Romualdez, who underscored “the collective responsibility bestowed upon us as legislators to scrutinize, deliberate, and ensure that every peso is judiciously allocated and spent.” We also thank the Senate of the Philippines, led by Senate President Francis Joseph “Chiz” Escudero, Finance Committee Chairperson Senator Grace Poe, and members of the Senate leadership, for their support. 

Lastly, I laud the President for the immediate approval of the FY 2025 NEP and for urging Congress during his SONA to, not only approve the proposed National Budget “in your usual timely manner but it be adhered to as closely as possible.”

On the part of the DBM, we are eager to work with our colleagues from the legislative branch and reiterate PBBM's call for agencies to wisely use the budget for “urgent priorities and socially impactful programs”

Beyond budget, the proposed 2025 National Budget is our commitment to a prosperous, inclusive, and resilient country.   Let us, therefore, sustain the momentum and stay on track with our Agenda for Prosperity. Together, let us fulfill the needs and aspirations of the Filipino people to achieve a Bagong Pilipinas for our citizens and future generations.

(Amenah F. Pangandaman is the Secretary of the Department of Budget and Management.)