2025 GAA out, 2026 budget in

At the first Cabinet meeting for the new fiscal year, President Ferdinand “Bongbong” Marcos Jr. (PBBM) issued marching orders to all department secretaries to “list down” their respective priority projects contained in the National Expenditure Program (NEP) but that went missing in his newly signed budget law. The presidential directives were issued after the detailed presentation of the budget items for each department under the 2025 General Appropriations Act (GAA).

Department of Budget and Management (DBM) Secretary Amenah Pangandaman disclosed they took up the Congress-approved 2025 GAA as compared to the President’s submission of the NEP at the Cabinet meeting held last Tuesday at Malacañang Palace. Speaking the next day at the Kapihan sa Manila Bay news forum, Pangandaman explained how each of the Executive departments will be affected by the “insertions” and re-alignments done in the 2025 GAA, including the presidential vetoes and “conditional” budget releases.

Together with PBBM, Executive Secretary Lucas Bersamin and the other Cabinet economic managers, Pangandaman recalled they initially went through the fine print of the Congress-approved 2025 budget bill. According to Pangandaman, it was only after the review that PBBM signed the 2025 GAA into law on Dec. 30 last year.

PBBM vetoed a whopping P194 billion from the Congress-approved 2025 budget that consisted mainly of new budget items that were not in the President’s NEP. From the original submission of P6.352 trillion, the 2025 budget law amounted to just P6.326 trillion. The bulk of vetoed items were from new items “inserted” in the 2025 GAA for the Department of Public Works and Highways (DPWH) that got P214 billion more than proposed in the NEP. On the other hand, the Department of Transportation (DOTr) suffered the biggest cut of P92 billion.

All of the line item vetoes were traced to the amendments done at the bicameral conference committee (bicam) that consolidated the differing versions of the 2025 budget bills of the Senate and the House of Representatives.

In his veto message sent to both chambers of the 19th Congress, PBBM pointed to the deleted budget items that were inconsistent with his administration’s “legacy” projects as spelled out in the eight-point socio-economic agenda. “The President instructed the secretaries to identify their respective priority projects that were in the NEP but did not appear in the 2025 GAA,” Pangandaman cited.

The next biggest increase in the 2025 GAA went to the Department of Health (DOH) by P30 billion more. This, despite Congress removing the annual subsidy to the Philippine Health Insurance Corp. (PhilHealth). Attached to the DOH, PhilHealth is funded through monthly premium payments from employed members and collections from “sin” taxes. The DBM secretary echoed PBBM’s public reassurances there will be no diminution of PhilHealth benefits.

Instead, the President earlier announced there will be more increases in the package of medical benefits from PhilHealth. Pangandaman reiterated the findings of the Department of Finance (DOF) that PhilHealth is financially healthy and stable. PhilHealth reported more than P250 billion in “reserve” funds and “P106 billion in cash on hand.”

The DBM supports the view that the controversial transfer last year of P80 billion of PhilHealth’s “unused” funds back to the National Treasury was valid and legal. Both Bersamin and Finance Secretary Ralph Recto were impleaded in a petition earlier filed before the Supreme Court on the alleged unlawful PhilHealth fund transfer.

Further, Pangandaman added, departments that got the deepest budget cuts were also instructed by PBBM “to reprioritize” their respective spending programs for this year. For example, she cited that the computerization program of the Department of Education (DepEd) removed from the agency budget for this year could tap funds from its own “slow-moving” projects, or use its own savings last year.

In fact, DepEd topped the departments with the highest “unused” budget as of September last year. DepEd posted as much as P100 billion, with the Department of Agriculture, the Department of Labor and Employment and the Department of Migrant Workers, in that order, with highest “unused” budgets in their respective 2024 NEPs. In fairness to DepEd Secretary Sonny Angara, he just took over the agency in July last year to replace Vice President Sara Duterte, who resigned from the Marcos Cabinet.

VP Sara seemingly observed a unilateral “ceasefire” during the just ended holiday period as she quieted down from feuding in public with PBBM and bitter attacks on her foes. Still, the Chief Executive sustained the Congress cuts in the budget of the Office of the Vice President (OVP) that suffered a P1.3-billion cut. Thus, the OVP will only receive P733 million this year instead of the NEP-proposed P2.03 billion. Except for her loyal and arch supporters, it seems no one else has taken up the cudgels for the deep cuts in the 2025 OVP budget.

The OVP budget cuts were reallocated to the Assistance to Individuals in Crisis Situation (AICS) program of the Department of Social Welfare and Development’s (DSWD) and to the Medical Assistance for Indigent and Financially Incapacitated Patients program of the DOH. The budget cuts came on the heels of House public hearings that looked into the questioned use by VP Sara of confidential and intelligence funds at her disposal in the 2023 budgets of the OVP and DepEd.

It cuts like a knife, as one popular song goes.

At the Kapihan sa Manila Bay last Wednesday, the DBM secretary brought along the full force of DBM staff and explained in great detail the other issues and controversies over the 2025 GAA. They included, namely, Rolando Toledo, Undersecretary for Budget Preparation and Execution; Janet Abuel, DBM Undersecretary of the Legal and Legislative Group; Goddes Libiran, Undersecretary for media affairs and relations; Margaux Salcedo, Undersecretary for advocacy and economic affairs; Mary Anne “Rhea” dela Vega, Assistant Secretary for Budget Preparation and Execution (BPE) and DBM Assistant Secretaries Diana Camacho-Mercado, Bodie Pulido and Director Rio Santos.

With the 2025 GAA now in place, the DBM chief announced she already issued the “budget call” last week. The call prompts all national government agencies to start crafting their respective budget proposals for 2026.