The Constitution and the legal framework for the country’s budgeting system clearly indicate the separation of powers and delineation of functions between the executive and legislative branches of government.
The former is exclusively responsible for preparation and implementation of the national budget, particularly identification, evaluation, selection and implementation of programs, projects and activities. The latter is empowered to authorize use of public funds for its implementation through enactment of the General Approprations Act (GAA) and other appropriation laws.
This delineation of functions was affirmed by the Supreme Court in 2013 when it declared the Priority Development Assistance Fund (PDAF), more popularly known as ‘pork barrel’, unconstitutional and nullified laws that gave discretionary lump sum funds to members of Congress for projects in their districts.
PDAF was found to violate the separtion of powers between the executive and legislative branches of government by allowing members of Congress to participate in the implementation of the national budget after its approval.
The budget system actually requires participation of both branches in budget preparation but not in its implementation. To begin with, the executive branch prepares the annual proposed budget or National Expenditure Program (NEP) through a budget call by the Department of Budget and Management {DBM) on all agencies, including the judicial branch and independent commissions.
These agencies then propose and officially submit to DBM their respective programs, projects and activities pursuant to their mandated functions.
Based on projections of expected revenues, on the one hand, and the stated goals and spending priorities of government, on the other, they are consolidated by DBM into a budget of expenditures or NEP to be proposed to the legislature.
The goals and spending priorities are reflected in the Medium Term Development Plan, Public Investment Program, Medium Term Fiscal Framework and other relevant documents. Presidential pronouncements related to public investment and fiscal policy such as those explicitly mentioned in the State of the Nation Address (SONA) necessarily serve as an important consideration in the budget preparation process.
As earlier mentioned, the legislative branch enact appropriation laws, principally the GAA. to authorize expenditure of funds for implementation of the above mentioned programs, projects and activities.
Upon submission of the NEP to Congress, the two houses of Congress, initially the Lower House, separately and consecutively review and revise it as they deem appropriate.
The House of Repreentatives then submits to the Senate its approved version of the appropriations bill (H-VAB). The Senate, following its own review and revision of H-VAB invariably comes up with its own approved version {S-VAB]. This leads to the formation and convening of the Joint Bicameral Conference (BICAM) to reconcile the two versions.
Expectedly, a third version emerges. It is in the series of review and revision of the NEP by the legislature to come up with the final version of the appropriations bill to be submitted to the President that amendments and insertions are introduced. But most of the project insertions in the 2025 GAA were made at the BICAM level through the so-called Small Commitee.
To mollify the people’s rage over massive and extensive funding anomalies in flood control projects, facilitated mainly by projects identified and inserted by legislators, some politicians have argued that pursuant to their mandate insertions of those projects are just like any other amendment in the process of enacting the GAA.
It is in this light that a distinction between the two terms deserves some elaboration. AMENDMENT and INSERTION in the GAA are not the same. In my opinion, amendments based on the collective wisdom of legislators such as increase or decrease of funding allocation to programs, projects or activities identified in the NEP or their transfer from programmed appropriation (PA) to unprogrammed appropriation (UA) are well within their mandate and prerogatives.
But the same cannot be said with respect to projects identified and inserted by individual politicians into the GAA without the benefit of any kind of evaluation in terms of their utility, technical and economic feasibility, and alignment with the government’s spending priorities. It is even possible that documentation of those projects, reflecting their engineering design and cost estimates were done by prospective contractors.
Identification, evaluation, prioritization and selection of projects are functions exclusively assigned to the executive branch. If a legislator should have a project idea in mind to respond to the needs of his/her constituency, it should be proposed to the concerned implementing agency for documentation and possible inclusion in the NEP rather than simply inserting it into the GAA.
As mentioned earlier, that exclusive function of the executive branch was affirned by the Supreme Court when it declared PDAF unconstitutional. Under PDAF, legislators were allowed to identify projects AFTER enactment of the GAA.
For a few years after the Supreme Court ruling, legislators submitted their proposed projects to the concerned implementing agency for inclusion in the NEP rather than inserting them into the GAA to allow them to respond to the needs of their constituency.
For the past several years, however, congressional insertions were facilitated through transfer of high priority projects, even from the health and education sectors, from PA to UA.
This allowed funding of inserted projects through increased allocation to implementing agencies, especially the Department of Public Works and Highways (DPWH} under PA. (Reportedly, funding of inserted projects under UA has also been happening.) These inserted projects are now seen by the public as a convenient means of stealing taxpayers money by legislators themselves rather than as a response to the needs of their constituency.
To be fair, some transfers of projects from PA to UA may be considered justifiable. In the case of foreign assisted projects, expected loan proceeds from Official Development Assistance (ODA} for the incoming budget year may not be realized due to historical proof of limited absorptive capacity of some implementing agencies.
The limitation arises mainly from delays in project implementation for many different reasons, of which most common is right of way acquisition.
One example was P378.2 billion expected loan proceeds for the Department of Transportation transfered to UA in 2023 based on historical proof of its limited absorptive capacity. It accounted for the biggest share of 64 % out of the total UA of P588.1 billion in the NEP for that budget year. (Source DBM).
Inclusion of UA in the NEP has been practiced over the last four decades although there were years it was foregone presumably because of more precise projection of likely amount of revenue to be realized in the corresponding budget year.
The share of UA to National Budget from 2010 to 2022 ranged from 2 to 8 %. Since then however, the amounts reflected in the GAA have exponentially increased.
In his 20 September 2024 Inquirer column, Former Secretary of Finance Gary Teves reported that in the 2024 GAA, ”Congress decided to increase the UAs from P281.9 billion, as originally submitted by the executive branch, to P731.4 billion, an increase of 159 percent or P449.5 billion’.
To help fund the UAs, Congress authorized DOF to collect P89.9 billion unused funds of Phil Health, among other GOCCs. This led health care advocates to file a case questioning the legal basis of that action. To date, that case is yet to be decided by the Supreme Court.
In the 2025 GAA, Former Secretary Teves again called attention to the transfer from PA to UA of priority projects such as the successful Pantawid Pamilya Pilipino Program (4Ps), otherwise known as conditional cash transfer program, initially funded by the World Bank. This partly allowed an increase of P288 billion in the budget of DPWH to P1.03 trillion, thereby becoming the highest recipient of budgetary resources.
In enacting the 2026 GAA, it would do well for Congress to abolish the UA entirely as was done in previous years or, if not possible, to at least minimize the amount in consultation with concerned executive officials, preferaby through the Legislative-Executive Development Advisory Council (LEDAC).
Abolition of the UA would require more effective budgetary planning in future budget years on the part of DBM to ensure that projected revenues for the incoming fiscal year would likely be realized.
All projects, including those proposed by elected officials for inclusion in the NEP, would then be ‘programmed’ i.e. funded through PA. In the event that abolition of UA is not possible this year for technical or political reasons, the UA can and should be reduced to a minimum by confining its application to unforseen emergencies and contingencies such as natural disasters and ODA loan cancellation for ongoing projects to enable their completion.
Congress would do even better if it could muster enough political will to inihibit itself from the much discredited practice of INSERTION of their pet projects into the 2026 GAA that will likely turn out to be either ghost or sub-standard.
It could go a long way to help arrest the increasing outrage of the people over the unprecedented conspiracy involving legislators, senior as well as regional level officials of implementing agencies especially DPWH, including even COA, and private contractors to steal taxpayers money for private gains.
Finally, in the event that Congress in its collective wisdom still enact the 2026 budget with inserted projects, the President must veto ALL of the corresponding budget items or, if not, order DBM to withhold the release of funds for their implementation These recommended acts of the President could contain if not reverse public outrage over the anomalies associated with those projects and possibly restore the people’s trust in government in the face of proposed extra-constitutional measures that constitute an existential threat to his administration./tsb