Massive cuts and realignments amounting to Php 347 billion in the 2025 national budget have undermined the Marcos administration's goals of reaching a single-digit poverty rate and prioritizing strategic programs for economic development, according to budget experts.
"There is movement away from programs that empower communities or promote self-reliance and ensure that there is engagement with community and civil society organizations," said former Budget and Management Secretary Florencio "Butch" Abad in the Jan. 13 forum, "Patronage Politics: The hidden hand behind the 2025 budget."
The forum, organized by the International Center for Innovation, Transformation and Excellence in Governance (INCITEGov), tackled how the cuts and realignments in the General Appropriations Act (GAA) can increase poverty and undermine institutions. Attended by 161 participants online and at the Ateneo School of Government, it provided a platform to discuss concrete steps to fight corruption of the national budget.
Abad, a lawyer, former DBM Secretary and founding trustee of INCITEGov, pointed out that social service programs suffered the brunt of budget cuts in the 2025 GAA, including Php 50 billion from the Pantawid Pamilyang Pilipino Program (4Ps) of the Department of Social Welfare and Development (DSWD), Php 74.4 billion from PhilHealth subsidies, and Php 12 billion from the Department of Education (DepEd).
The biggest gainers, meanwhile, are "graft-prone" projects of the Department of Public Works and Highways (DPWH)-such as flood control and local roads, bridges, and multi-purpose halls-that received an extra Php 94.33 billion.
Diversions also benefited the Office of the President, the House of Representatives, and four financial aid projects: the Ayuda sa Kapos ang Kita Program (AKAP) with an additional Php 26 billion, Assistance to Individuals in Crisis Situations (AICS) with Php 9.5 billion, Medical Assistance to Indigent and Financially Incapacitated People (MAIFIP) with Php 14.3 billion, and Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) with Php 3.4 billion.
Abad flags the massive cuts in social protection programs and unprecedented realignments in the 2025 national budget.
"The arrogation of budgets from social service agencies to fund ayuda cash dole-outs and their control and distribution by politicians can only lead to a relationship of dependency and deepen the culture of patronage, the very conditions that perpetuate poverty and political dynasties," Abad said.
JC Punongbayan, assistant professor at the University of the Philippines School of Economics and a Trustee of INCITEGov, echoed this and said the current administration's focus on unconditional cash transfers over conditional programs like 4Ps could promote a "cycle of poverty" in the country given their short-term nature.
"We don't want to say that we are anti-ayuda because that's not at all our message. But we need to be smarter about it (ayuda)," stressed Punongbayan.
'Unprecedented' realignments
The National Expenditure Program (NEP) is typically approved with no major changes that "reorient the development priorities" in the GAA, according to Abad.
A few exceptions were the financial crisis in the 1990s and the COVID-19 pandemic from 2020 to 2022. There were also two instances in former president Gloria Macapagal-Arroyo's administration from 2001 to 2010 when the passage of the GAA was delayed.
However, in the last three years of President Ferdinand Marcos Jr. 's term, Abad said a total of Php 1.04 trillion has been deducted from the NEP and realigned to unprogrammed appropriations. These are standby funds that can only be accessed when the government has extra revenues or approved loans for foreign-assisted projects.
"Effectively, it's become like a policy, adopted by Congress, especially the magnitude of the cuts made from the [NEP]," Abad said, describing this as "unprecedented."
For instance, a fifth of the 2024 budget pie was unprogrammed. This meant social service projects and capital outlay for infrastructure development had no definite funding source.
The Marcos Administration is, in effect, sabotaging its own Build Better More Project, wherein, if there is no funding for counterpart spending, many projects like the Metro Manila Subway and other railway projects will not move forward.
He noted that Congress even added a special provision in the GAA, proposed by the House of Representatives, that includes cash reserves from government-owned or -controlled corporations (GOCCs) as a revenue source for unprogrammed funds.
Urging for greater transparency in the budgeting process, the former Budget secretary lamented that only a select group of House and Senate officials attended the bicameral conference committee that decided and finalized the GAA.
Abusing, politicizing ayuda
In the forum, Punongbayan highlighted how the rise in ayuda programs within the budget can lead to abuse for political patronage, especially in the run-up to the 2025 midterm elections.
"At the same time that Congress is pouring lots of money into ayuda programs... 'yung targeting ay napaka-flawed. And in most cases arbitrary," he said, noting that the lists of beneficiaries originating from the local government units are poorly vetted by national government agencies and result in substantial program leakages. To address this issue, more statisticians are needed in every municipality to collect and verify data at the local level.
Economist and INCITEGov trustee Dr. JC Punongbayan lists some of government's biggest ayuda programs at present and their budget allocations for 2025.
Punongbayan also reminded that breaking the cycle of poverty requires encouraging poor families to invest more in their children's education and health. Although unconditional cash transfers have benefits, he said programs such as 4Ps, microfinancing, or microinsurance could promote financial inclusion and empower poorer households.
With the Commission on Elections (Comelec) recently exempting DSWD-led ayuda programs from the election spending ban under the Omnibus Election Code, both economic experts warned against the potential for "legalized vote buying" through these ayuda programs.
Even with these "nominal" bans, several politicians have notably been going around the country, holding concerts and mall tours as well as handing out ayuda through AKAP.
Abad said this is "clear evidence" of the violation of the Supreme Court's 2013 decision declaring Priority Development Assistance Funds or the congressional pork barrel unconstitutional.
He reminded, "If you don't put a stop to the way the [NEP] is being pillaged, then it may end up as huge swatches for political events or personal events to those who control the funds."