THE government’s push for fiscal consolidation may falter without transparent spending and depoliticized allocations, economists warned, as the national budget should shift from political patronage to inclusive growth.
In a commentary by New York-based think tank GlobalSource Partners, economists Diwa Guinigundo and Wilhelmina Mañalac said that a transparent budget execution, enhanced audit capability and depoliticized allocation mechanisms are necessary for a credible fiscal consolidation plan.
‘This is the only way that the national budget can evolve from a tool of distributive politics into a genuine instrument of inclusive and sustainable growth,’ they said.
Guinigundo and Mañalac said that while debt-funded spending helped protect the economy from recent shocks and the pandemic, the ‘rapid pace’ of debt buildup now runs the risk of crowding out social and infrastructure investments.
The Philippines’s outstanding debt stands at a tall P17.5 trillion, with about P1 trillion of next year’s budget set aside for interest payments alone.
‘To sustain fiscal sustainability, the government must tighten its deficit path, improve revenue efficiency and rationalize low-impact spending,’ they said.
They also called for a medium-term fiscal strategy anchored on credible deficit reduction targets, sound expenditure management and improved public sector productivity.
The 2026 national budget, they said, highlights the urgency of these reforms as spending continues to expand amid persistent governance challenges.
Despite the realignment of P255 billion from flood control projects to education, food security and healthcare, they noted that this exposes the weak gatekeeping role of agencies in ensuring the integrity and efficiency of capital outlays, particularly those susceptible to political capture.
Civil society groups, they added, have raised concerns over the persistence of pork and patronage-style allocations in social protection programs, as well as legislators’ control over infrastructure budget.
‘These embedded entitlements blur the line between constituency service and pork allocation, weakening programmatic targeting and outcome monitoring,’ Guinigundo and Mañalac said.
The P250 billion worth of unprogrammed appropriations in next year’s budget and the persistence of these allocations likewise reflect a continuing tension between fiscal flexibility and fiscal discipline-a tradeoff that, they said, the Philippine budget system has yet to resolve.
While some procedural reforms show progress, they noted that the bicameral conference committee is still viewed as a ‘black box’ where last-minute insertions and realignments occur without disclosure.
They warned that without addressing the loopholes in unprogrammed spending, opaque bicameral adjustments and politically driven allocations, the administration’s fiscal consolidation goals could remain ‘procedural rather than substantive.’