Philippines Eyes P7.2-T Budget for 2027, Focuses on Spending Restraint Amid Fiscal Constraints

The Department of Budget and Management (DBM) is reviewing agency budget proposals to determine specific allocations under the proposed P7.2-trillion national budget for 2027, Budget Secretary Kim Robert C. de Leon said. “What was approved is the budget level for 2027,” Mr. de Leon told BusinessWorld via Viber late on Sunday. “We are still in the process of preparing the details coming from the proposals of agencies,” he said. The DBM’s National Budget Memorandum No. 158 set the proposed fiscal year 2027 budget at P7.200 trillion, equivalent to 21.7% of gross domestic product. This is P407 billion, or 6%, higher than the P6.793-trillion budget program for 2026. The DBM noted that the government is navigating a “very narrow fiscal space,” primarily due to funding pressures from automatically appropriated items — such as interest payments and National Tax Allotment shares for local government units — alongside requirements from newly enacted laws and recurrent mandatory expenditures. The Development Budget Coordination Committee recalibrated its medium-term assumptions amid risks from geopolitical tensions, including the Middle East conflict, and domestic economic challenges such as climate change and the fallout from flood control project anomalies. For 2027, the government is projecting revenues of P5.2055 trillion and disbursements of P6.9005 trillion, leaving a fiscal deficit of P1.6949 trillion, according to the fiscal aggregates in the memorandum. To ensure efficient spending, the DBM said it will prioritize agency proposals based on their “absorptive capacity” and “implementation-readiness.” — Erika Mae P. Sinaking