The Marcos administration is proposing a ₱7.2-trillion national budget for 2027, a six percent increase from this year’s spending plan, with the government prioritizing infrastructure, essential public services, and high-impact development programs despite tighter fiscal conditions.
The proposed budget, outlined in National Budget Memorandum (NBM) No. 158 issued by the Department of Budget and Management (DBM), is equivalent to 21.7 percent of the country’s gross domestic product (GDP) and is ₱407 billion higher than the ₱6.793-trillion budget for 2026.
“The proposed budget for next year will focus on programs, activities and projects (PAPs) that seek to create better opportunities and address the needs of the Filipino people, helping ensure a more resilient and secure future for all,” the memorandum stated.
DBM Acting Secretary Kim Robert de Leon said government agencies’ budget proposals underwent careful review to ensure additional funding would be directed toward productive and priority development expenditures.
He said agencies’ absorptive capacity and implementation readiness would be key considerations in funding new or expanded programs to ensure the efficient use of public funds.
“In crafting the proposed FY 2027 budget, the government is confronted with a very narrow fiscal space,” the memorandum said, citing growing obligations from automatically appropriated expenditures such as local government shares, interest payments, newly enacted laws, and other mandatory spending.
The DBM said only programs that have secured the necessary approvals from oversight agencies within the prescribed budget preparation timeline will be considered for funding.
The proposed budget also prioritizes pre-construction activities, government counterpart funding for foreign-assisted projects, and the completion of ongoing flagship infrastructure projects to maximize their economic impact.
The budget framework is based on macroeconomic assumptions and fiscal targets approved by the Development Budget Coordination Committee (DBCC) on June 16.
The DBCC also called for a recalibration of the government’s fiscal policy, citing mounting economic pressures brought about by the Middle East conflict, climate-related disruptions, and other global uncertainties.
According to the memorandum, recent geopolitical tensions involving the United States, Israel, and Iran, as well as issues surrounding alleged anomalies in flood control projects, have affected the country’s macroeconomic outlook and fiscal projections.
“The issues surrounding alleged anomalies in flood control projects last year and, more recently, the conflict involving the United States, Israel, and Iran made a drastic impact on the country’s macroeconomic fundamentals,” the memorandum said.
The government noted that the Philippine economy grew by 4.4 percent in 2025, but growth was tempered by climate-related disruptions, weaker construction activity, and global economic headwinds.
Despite higher projected deficits, the government said it remains committed to fiscal consolidation, with the budget deficit expected to gradually decline from 5.4 percent of GDP in 2026 to 3.5 percent by 2030.
De Leon said stricter spending priorities, reduced non-essential operating expenses, improved procurement, and stronger government efficiency measures will help ease fiscal pressures while ensuring funds are directed to programs with the greatest public impact.
