Philippines agencies work to align regional project lists with budget ceilings

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Philippines regional project budget alignment

Highlights

The Department of Economy, Planning, and Development and Department of Budget and Management will establish regional budget ceilings to improve funding rates for priority projects.
Currently, only 30% of regional development council priority projects enter the General Appropriations Act, with a 50% inclusion rate targeted after implementing ceilings.
Earlier regional consultations aim to align project priorities before budget drafting, and officials warn that a reenacted budget would hamper economic growth and spending efficiency.

Regional ceilings and earlier budget consultations

As reported by BusinessWorld Online, the Department of Economy, Planning, and Development plans to work with the Department of Budget and Management to set indicative budget ceilings for each region so that priority projects have a better chance of being funded.

Economy Undersecretary Carlos Bernardo O. Abad Santos said only about 30% of projects prioritized by regional development councils currently make it into the General Appropriations Act. He said the lack of clear ceilings lets regions prepare long project wish lists without knowing the funding available, while earlier indicative limits would help local government units identify which proposals to prioritize.

A joint memorandum circular between DEPDev and the Department of Budget and Management also seeks to increase the share of regional development council priority projects included in the National Expenditure Program and later funded through the General Appropriations Act. Abad Santos said the target is not full inclusion because of fiscal constraints, but improving on the current 30%, with 50% seen as a meaningful gain once regional ceilings are in place.

Implications for public spending and growth

The planned changes also include holding regional consultations earlier so national agencies can factor in regional development council priorities before submitting budget proposals to the Department of Budget and Management. Abad Santos said that under the previous process, agencies are already preparing their budgets by the time regional councils meet to discuss their priorities.

He also said a reenacted budget could weigh on economic growth by limiting government spending and delaying the benefits of public investment. Because the proposed budget is larger than the previous year's plan and state spending accounts for a significant share of gross domestic product, he said reverting to an old budget would also reduce spending efficiency and create opportunity costs.

Still, Abad Santos said he considers a reenacted budget unlikely, although Senate deliberations and bicameral conference committee discussions could take longer.

In our earlier article on Malaysia’s Budget 2027 spending growth, we noted that federal allocations rose sharply and that historical patterns often show higher spending in the year after a general election. We also outlined key drivers behind the larger budget—such as policy and event-related costs—and pointed to the fiscal implications of maintaining higher outlays alongside deficit-reduction goals.

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