Philippine President Ferdinand Marcos Jr signed the budget Bill into law on Dec 30, 2024. - AFP
MANILA: The Philippines’ 6.33 trillion peso (US$110 billion) national budget for 2025 could face legal challenges, as critics prepare to question alleged unconstitutional provisions before the Supreme Court.
President Ferdinand Marcos Jr signed the budget Bill into law on Monday (Dec 30), saying the record-high spending programme will spur economic growth and reduce poverty.
He had delayed the signing by almost a week, citing the need to review the budget after civil society groups accused Congress of diverting money – from the education and health sectors as well as services to help the poor – to fund their pet projects instead.
Marcos vetoed 194 billlion pesos’ worth of items in the budget that he said were “inconsistent with the administration’s priority programmes”.
But analysts and stakeholders said the president’s veto did not address the alleged irregularities, as the budget still failed to meet the constitutional requirement to prioritise health and education.
For example, the proposed 74 billion peso subsidy for the Philippine Health Insurance Corporation (PhilHealth), which subsidises the medical expenses of paying members and shoulders the costs for non-paying indigent groups, was slashed in its entirety.
With the reduction, the entire health budget for 2025 is at 267.8 billion pesos, the fifth-highest among all sectors for 2025.
Marcos-allied lawmakers argued that officials of PhilHealth, which has long been plagued by corruption issues, need to be taught a lesson for irregular spending. They said the agency can still provide healthcare services, since it has an untapped 600 billion pesos in reserve funds.
But pro-health organisations Medical Action Group and Action for Economic Reforms said on Dec 31 that they will file a case against the Marcos government for defunding PhilHealth.
They said doing so violates the universal healthcare law and the sin tax law, both of which mandate that PhilHealth should receive annual funding from taxes on tobacco products and sugar-sweetened beverages.
“The 2025 national budget is unconstitutional,” the groups said in a joint statement, adding that a budget law cannot supersede other existing laws.
Economist J.C. Punongbayan told The Straits Times that the government may also be challenged by education advocates in court for failing to allot the highest budget to the sector, a constitutional requirement.
Dr Punongbayan said a traditional reading of the Constitution requires that the education department receive the largest funding, but it received only 793 billion pesos this year in the new budget, lower than the 1.007 trillion peso allocated to the public works department.
But the Marcos government’s position is that the education department still gets the largest share. It has computed the entire education budget by combining the department’s share and the allocations for education programmes run by other agencies, with the total amount effectively adding up to 1.055 trillion pesos.
Dr Punongbayan said: “I think this is an opportunity for the Supreme Court to lay down the rules concretely because the computation for the education sector’s budget has been a matter of tradition rather than any concrete rule.”
Marcos also drew flak for not restoring the 10 billion pesos that lawmakers took out from the education department’s computerisation programme for students during the budget deliberations in Congress.
Budget experts told ST that the funds were diverted to local infrastructure projects like roads and bridges in lawmakers’ legislative districts, as well as an unconditional cash transfer project called AKAP.
Under AKAP, minimum wage earners and poor Filipinos can receive up to 5,000 pesos each to help tide them over the effects of inflation. The project had a budget of 20 billion pesos in 2024, but the Marcos government increased it by six billion in 2025.
Budget analysts say this is worrisome, as politicians seeking re-election in the May midterm polls could abuse such programmes and use them as their “pork barrel” during the campaign period.
Pork barrel refers to the practice of allocating government funds for local projects that are deemed to benefit a legislator’s constituents, often in exchange for political support.
“It’s legislated electioneering,” budget analyst Zysa Suzara of the Manila-based public finance think-tank iLead told ST. “They’re really just fooling the citizenry”.
Marcos said the 2025 budget will promote human capital development, but Suzara noted that this claim is difficult to reconcile due to the government’s significant reductions in health and education.
To help quell accusations of pork barrel spending, Marcos said that stricter guidelines on the implementation of AKAP will soon be crafted by the ministries of social welfare, labour, and national economic development.
But Dr Punongbayan warned it may already be too late to do so, as lawmakers have already been heavily promoting AKAP since last year.
He added that several legislators have ties with construction companies, which have cornered government infrastructure projects over the years.
“So I expect the level of patronage in the run-up to the 2025 elections will be quite colossal,” Dr Punongbayan said.
Government officials, however, have denied that the 2025 budget allocations for infrastructure and AKAP would be used for electioneering.
Executive Secretary Lucas Bersamin said during a press briefing on Dec 30 that they anticipate legal challenges against the 2025 budget, but expect to win in court.
“We cannot prevent challenges that may be mounted by any group that might find this budget worthy of contesting,” he said.
“We are confident that we have worked diligently on this, and we believe our efforts will be upheld, barring any unforeseen challenges.” - The Straits Times/ANN
