P735.56 Billion ‘Red Flag’ Items Spotted In 2027 Budget

A coalition of civil society organizations has flagged P735.56 billion in President Marcos’ proposed 2027 national budget as vulnerable to political intervention and insertions, raising concerns ahead of the 2028 polls.

The People’s Budget Coalition (PBC) said these red flags consist of P140.07 billion in “soft pork” or social assistance and other programs susceptible to politicking and P483.51 billion in “hard pork,” covering infrastructure projects vulnerable to budget insertions, ghost projects and other anomalies.

The remaining P111.98 billion falls under “shadow pork,” referring to unprogrammed appropriations that the group said raise questions on transparency and constitutionality.

“In theory, or in a vacuum, these programs shouldn’t be harmful. For example, infrastructure and social protection are necessary. However, we have observed the pattern of insertions in previous years’ budgets, and from feedback on disbursement and implementation, we can see the high politicization hijacking these programs,” PBC co-convenor AJ Montesa told The Philippine STAR.

Montesa said the red flags should be monitored closely at every stage of the budget process, from the National Expenditure Program (NEP) to congressional deliberations.

While the P735.56-billion high-risk items are already identified in the executive’s proposed budget, Montesa said the red flags could become bigger once Congress begins reviewing the spending plan.

“The pattern has been for Congress to really increase these red flag items when enacting the GAA (General Appropriations Act), but the hope is that the respective budget committee chairs will be open to civil society’s feedback and monitoring,” he said, after calls from civil society organizations that they are being sidelined in budget talks.

Montesa cited Senate President and finance committee chair Sherwin Gatchalian as an example, saying he had been receptive to civil society feedback and that the Senate had required stronger documentation for infrastructure-related amendments.

“It really takes full openness and transparency to prevent budget anomalies or misallocations,” he said.

Election budget

More than P71 billion of the red flag items under “soft pork” amount is tied to government assistance programs, with proposed allocations having been sharply reduced from their 2026 levels.

In an interview with “Storycon” on One News, public finance analyst Zy-Za Suzara said while funding for such programs has been reduced from 2026 levels, they still account for a significant portion of next year’s proposed budget.

She cited programs such as the financial aid projects like the Assistance to Individuals in Crisis Situation (AICS) under the Department of Social Welfare and Development, the Department of Labor and Employment’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) and the Medical Assistance to Indigent and Financially Incapacitated Patients (MAIFIP) under the Department of Health (DOH).

Suzara also flagged the Local Government Support Fund (LGSF), which she described as lump sum allocations that are discretionary in nature.

“If you look at the (proposal), you will see that the budget for human capital development… they were all cut,” she said. “What were maintained? If we look at the figures, the large amount that was maintained are for soft pork or hard pork…  We can see that election is the priority.”

The AICS is proposed to receive P33.28 billion, about 48 percent lower than the P63.9 billion allocated under the 2026 GAA. 

Meanwhile, TUPAD would get P14.25 billion, down 36.5 percent from P22.44 billion this year, while MAIFIP is proposed to receive P24.24 billion, a 53 percent reduction from P51.65 billion in 2026.

Montesa said these programs are prone to “pet insertions as they entrench patron-driven politics to the detriment of rules based social protection,” building political visibility ahead of the polls.

“Social protection has been hijacked as a means for politicians to create utang na loob with voters, instead of having a rights-based and rules-based system for social protection – this is patronage,” he said.

The Commission on Higher Education’s Tulong Dunong program and the Presidential Assistance to Farmers and Fisherfolk received no allocation in the proposed 2027 budget, after getting P2.73 billion and P10 billion, respectively, in 2026.

‘Ballooning LGSF’

 While acknowledging the high inflation, the PBC said social protection remains important, but the payouts and disbursements should be rules-based and based on data and needs.

“Additionally, we also see an uptick in the budgets for confidential and intelligence funds, as well as for ‘local pork’ – the Local Government Support Fund,” Montesa said. He said this is a lump-sum fund whose allocation and distribution are decided by Malacañang.

The P58.53-billion LGSF allocation forms part of the P109.13 billion earmarked for local government units in the proposed 2027 budget. This is slightly higher than the P57.87 billion in the 2026 budget.

This fund is transferred to provinces, cities, municipalities and barangays to finance priority development programs and urgent local needs.

Gatchalian has scrutinized the LGSF, which – he pointed out – historically hovered between P10 billion and P15 billion before quadrupling last year.

Department of Budget and Management (DBM) acting Secretary Kim Robert de Leon explained the ballooned fund is currently focused on two main fronts: a nationwide rice distribution program to cushion the impact of inflation and infrastructure development to stimulate local economic growth.

While De Leon cited “sustained gains” to justify repeating the massive allocation, Gatchalian demanded a concrete study proving the fund’s actual impact on countryside development and poverty reduction.

Hard pork

The biggest chunk of the coalition’s red flags comes from infrastructure.

Of the P483.51 billion in infrastructure projects that PBC classifies as “hard pork,” the Department of Public Works and Highways (DPWH) has proposed a nearly P650-billion budget for 2027, including funding for asset preservation and flood management.

Other infrastructure-related allocations include P16 billion for farm-to-market roads, P46.36 billion for the National Irrigation Administration and P14.54 billion for the DOH’s Health Facilities Enhancement Program.

The government is seeking to ramp up infrastructure spending to support economic growth. But for the PBC, the increase also means more projects that need to be protected from political intervention.

Montesa said the group has observed patterns of anomalous infrastructure insertions in previous budgets, particularly in flood-control projects.

“Flood control projects were awarded to legislative districts with congressmen who have ties to the Speaker or President rather than being based on a master plan or a mapping of risk. This pattern has been evident since at least 2019,” he said.

Montesa also called for infrastructure projects to be backed by detailed data, including geotagging, to allow the public to track where projects are located.

Another category is the “shadow pork,” which consists of P111.98 billion in unprogrammed appropriations, generally intended to serve as standby funds subject to specified conditions before they can be released.

Among the biggest items are P57 billion for the fund restoration of the Philippine Deposit Insurance Corp. and P42.55 billion for support for foreign-assisted projects.

Montesa said unprogrammed appropriations have increasingly become a red flag since 2022, as they are increasingly prone to insertions, and the bloating of this item signifies abuse of the budget.  

Confidential funds

The DBM has rejected requests for confidential funds from civilian agencies lacking legitimate surveillance mandates for the proposed 2027 national budget, amid the ongoing impeachment trial highlighting the potential abuse of secret funds.

During the Development Budget Coordination Committee (DBCC) hearing at the Senate on Thursday, Gatchalian sought assurances that the proposed P10.7-billion allocation – comprising P4.3 billion for confidential and P6.4 billion for intelligence funds – was strictly vetted by the executive branch.

De Leon confirmed the agency filtered out requests from unqualified offices, ensuring such allocations are strictly limited to law enforcement and intelligence bodies.

Ping flags P3.2-B lump sum  

Meanwhile, Sen. Panfilo Lacson asked the DBM if it thinks the proposed P7.2-trillion national budget for 2027 is “execution ready” when it has millions in “lump sum” funds.

Speaking during the DBCC hearing, Lacson questioned De Leon for saying the 2027 NEP is “execution ready.” 

Lacson said he has flagged P180 million in “lump sum” funds under the DPWH budget for the construction of evacuation centers in each region.

With 18 regions in the country, the total lump sum fund for evacuation centers stands at P3.24 billion.

“Interestingly, you (De Leon) said the budget preparation is execution-ready. There’s a program of work, etc. But we saw P180 M for each (region), a lump sum, intended for all (18) regions, evacuation centers. It doesn’t even specify at which part of the region... there are no specifics,” Lacson said.

De Leon said the agencies would be required to submit the final details to the DBM, and the Office of Civil Defense has yet to finalize the list.

At the same committee hearing, the senator also called for persistently nonperforming government-owned and controlled corporations (GOCCs) to be abolished or completely defunded to maximize the state’s limited resources.

In response, Finance Secretary Frederick Go disclosed that the Governance Commission for GOCCs is currently evaluating 21 GOCCs for closure, winding down or absorption by other state firms. – With additional reports from Janvic Mateo, Neil Jayson Servallos and Marc Jayson Cayabyab