Philippines Proposes Record P7.2 Trillion Budget for 2027

The Marcos administration’s economic managers, sitting as the Development Budget Coordination Committee (DBCC), are proposing a record P7.2-trillion national budget for 2027. In a statement on Wednesday, the DBCC, citing its review of medium-term macroeconomic assumptions for fiscal year 2026 to 2030, said the proposed spending plan next year is equivalent to 21.7% of the country's gross domestic product. The P7.2-trillion national budget ceiling for 2027 is also 6% higher than the P6.793-trillion budget this year. “This reflects efficient, high-impact spending by streamlining redundant programs and strengthening transparency in the use of public funds,” the DBCC said. The DBCC is an inter-agency body responsible for approving the government's macroeconomic targets, revenue projections, borrowing levels, and spending ceilings. Chaired by the Department of Budget and Management (DBM), the DBCC also includes the Department of Finance (DOF), the Department of Economic Planning and Development (DEPDev), and the Office of the President (OP), with the Bangko Sentral ng Pilipinas (BSP) aligning monetary policies. Ultimately, the DBCC recommends the unified national fiscal program and public sector financial position to the President and the Cabinet. “To support this direction, the government will advance key governance reforms, including the accelerated implementation of the Government Optimization Program, the review and refinement of the performance incentive system, and the institutionalization of Maintenance and Other Operating Expenses (MOOE) efficiency measures,” the DBCC said. “These efforts aim to eliminate unnecessary recurring expenditures and redirect resources toward programs that support vulnerable sectors,” the economic managers said. To enhance local governance and expand LGUs’ contribution to national development, the DBCC said it will support ongoing devolution reform by preparing and approving Devolution Transition Plans (DTPs). “At the same time, the rationalization of cash subsidy and financial assistance programs will be prioritized to address overlaps, improve targeting of beneficiaries, and enhance public service delivery,” the economic managers added. Moreover, the DBCC said the government will strengthen infrastructure governance by enhancing project oversight and monitoring, while expediting the implementation of key flagship infrastructure initiatives under Public-Private Partnership arrangements. In line with the proposed 2027 budget, the DBCC is expecting revenue collections to increase from P4.81 trillion in 2026 to P5.21 trillion in 2027, and to P6.52 trillion by 2030. “This will be supported by the full implementation of tax policy reforms, such as the VAT on Digital Services Act, CREATE More law, Capital Markets Efficiency Promotion Act, and the new Mining Fiscal Regime, along with continued improvements in tax administration, digitalization, and enforcement,” the economic managers said. The DBCC also noted that the national government’s disbursement performance reached P1.49 trillion in the first quarter of the year. “This strong spending pace is expected to continue and accelerate in the last quarter, reaching P6.47 trillion (21.2% of GDP) by the end of 2026,” it said. “Over the medium term, disbursements are projected to average 20.2% of GDP annually from 2026 to 2030, reaching P6.90 trillion in 2027 and P7.98 trillion by 2030,” it added. The economic managers likewise committed to lowering the fiscal deficit from 5.4% of GDP in 2026 to 3.5% of GDP by 2030, “while sustaining the government’s investments in human capital development.” Growth outlook The DBCC said the Philippines' economic growth is projected to slow down to 3.5 to 4.5% in 2026 before recovering to 5.0 to 6.0% in 2027 to 2030. “Growth is expected to be moderate this year amid heightened domestic and external uncertainties, including the lingering effects of governance-related issues, geopolitical tensions in the Middle East, and other global developments affecting business and consumer confidence,” the economic managers said. “In detail, the elevated inflation this year may temper household consumption and investments, while potentially slower growth in remittances and visitor arrivals may also dampen overall growth. Moreover, the looming El Niño phenomenon in the second half of the year may reduce the agriculture sector's output and disrupt economic activities, if not accompanied by appropriate disaster preparedness and resilience measures. On the upside, growth in electronics exports and manufacturing may remain firm on the back of stable global demand,” the DBCC said. Meanwhile, the DBCC is expecting the inflation rate to average 6% to 7% in 2026, “reflecting elevated global fuel prices, persistent supply-side pressures, and the emerging second-round effects of the ongoing Middle East conflict.” Nonetheless, the economic managers said inflation is anticipated to ease to 4% to 5% in 2027, then stabilize at 2% to 4% from 2028 to 2030. “Dubai crude oil prices are assumed to average $80 to $100 per barrel in 2026, in line with international oil futures market trends. Oil prices are expected to decline further to $70 to $90 per barrel in 2027, then settle at $60 to $80 per barrel from 2028 to 2030, supported by gradual improvement in global oil supply prospects, albeit with elevated uncertainty,” the DBCC said. The economic managers also revised their foreign exchange rate assumption to an average of P60.00 to P62.00 against the US dollar from 2026 to 2030, “reflecting external developments and domestic headwinds.” “To align with global market developments, the DBCC also refined the country’s trade assumptions. Goods export growth is projected to rise by 3% in 2026, reach 4% from 2027 to 2029, and accelerate to 5% in 2030,” the DBCC said. “Likewise, goods imports are expected to grow by 5% in 2026-2027 and to gradually normalize over the medium term at around 4% to 5% in 2028-2030,” it added. –NB, GMA News