The Curious, Legal Limbo of Unprogrammed Funds in the 2026 Budget

Last week, President Ferdinand "Bongbong" Marcos Jr. vetoed P92.5 billion in the controversy-ridden unprogrammed funds in the 2026 national budget, which is the biggest in history at P6.793-trillion.

Economists, analysts, and legal experts say this won't do the trick in eradicating structural corruption and transparency loopholes that may go over our heads when it comes to the budget deliberation process.

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The Marcos administration has quite the hill to climb to appease the public cry for the need to do something about the abhorrent corruption within the legislature and even bureaucratic institutions, especially during the delicate period of crafting a transparent and effective spending plan for the country.

The President, whose cousin and former House Speaker Martin Romualdez had been roped into the unfortunate flood-control contract fiasco, had ordered government agencies to ensure prudent fiscal management practices and to keep public services uninterrupted.

"To ensure that public funds are expended in clear service of national interests, I vetoed several items of appropriations with their purposes in corresponding special conditions under the unprogrammed appropriations totaling almost P92.5 billion," he said during the signing ceremony of the 2026 spending plan.

Unprogrammed appropriations, or discretionary funds that can be released if additional state revenue comes in, were originally slated to be at P243 billion before Marcos thumbed down the aforementioned P92.5 billion.

"Unprogrammed funds raise a serious constitutional question: do they not, in substance, expand national spending beyond what the Executive initially proposed? At the very least, they undermine fiscal transparency and discipline," Michael Henry Yusingco, a constitutionalist, law lecturer, and a senior research fellow at the Ateneo de Manila Policy Center, said in a Facebook Messenger chat. "At worst, they serve as a constitutional workaround that enables precisely the abuses the framers sought to prevent. It may not be illegal per se, but it is clearly bad public finance management," the lawyer added.

Experts still raised concern over the P150.9 billion still left that may "blur the lines" with what can be legally spent this year.

Marcos justified his move by saying that this was the lowest level of unprogrammed appropriations since 2019 and that fund releases would need to go through extensive validation.

"Let me be clear: the Unprogrammed Appropriations are not blank checks. We will not allow the Unprogrammed Appropriations to be misused or treated as a backdoor for discretionary spending," the President declared, trying to assure the public of budgetary transparency and accountability.

Anti-corruption watchdogs earlier called on the President to get rid of the over P243 billion in the "so-called shadow pork" items or what we know as the unprogrammed appropriations. Strangely enough during the signing ceremony, several news sites reported Malacañang personnel asking reporters to hand over their phones and laptops before they covered the event even amid heightened public scrutiny of the entire budget finalization process.

These funds aren't explicitly against the 1987 Constitution but keeping this practice of having these discretionary funds is bad public finance management.

Yusingco, a lawyer and an expert on public policy, said that Marcos should have scrapped the entire allocation for these problematic funds and avoided dealing with this legal loophole and dilemma altogether.

"If President Marcos truly wants to leave an anti-corruption legacy, one move he could've done to prove his mettle is to veto the entire allotment for unprogrammed funds. Additionally, he should also direct the Legislative-Executive Development Advisory Council (LEDAC) to enact a robust budget process law to protect the national budget from corrupt practices like unprogrammed funds and project insertions," he added.

Marcos had struck out P80 billion for the Assistance for Government Infrastructure and Social Programs (SAGIP), P6.7 billion in public health emergency benefits, P2 billion for compensation of Marawi siege victims, and P210 million for the Nampedai property, which is a piece of Philippine real estate in Tokyo, Japan.

"The veto strengthens fiscal accountability in practical terms by trimming ambiguity and reducing opportunities for discretionary use," according to Ateneo de Manila University economics professor Leonardo Lanzona. "However, the broader constitutional tension remains: Congress created the Unprogrammed Appropriations in the first place, and legal scholars debate whether unprogrammed appropriations blur the lines between legislative appropriation and executive discretion."

Lanzona also raised concern over parking large sums of money shrouded in procedural ambiguity and discretion.

"That debate is separate from the President's veto power but shows that Unprogrammed Appropriations will likely continue to be a contested fiscal institution," the economist added.

Here we are at the final frontier of the hellish process that is the budget building process, the final spending plan signed into law.

As mandated by the Constitution and at a historic high, the Education sector will have a whopping P1.015 trillion to work with or amounting to about 4.36 percent of the Philippines' economic output. This funding will be used for the nearly 33,000 teaching positions, more than 32,000 nonteaching roles, and to bankroll the maintenance and construction of about 25,000 classrooms. A crucial move considering the learning crisis that has been a perennial roadblock for Filipino students who fare poorly on global assessments for mathematics, reading, and science.

Marcos approved a budget of P530.9 billion this year for the controversy-ridden and contentious Department of Public Works and Highways, which is much lower than the proposed P881 billion from the House version. It is still the second highest-funded agency this year even after the scandal involving substandard flood mitigation projects and a kickback scheme that saw lawmakers and bureaucrats pocket boatloads of public funds. This is rich considering that the Philippines is one of the world's most vulnerable to flooding and typhoons.

Funds for the Health sector saw a rise to P448.1 billion to keep the universal healthcare programs afloat including the zero-balance billing, disease surveillance, and bringing more health workers in.

The Departments of National Defense and the Interior and Local Government will both have P310 billion to work with amid belligerent China breathing down the country's efforts to bolster their claim in the highly-contested South China Sea.

The Department of Agriculture will now have P297.1 billion for the country's food security and productivity goals; the Department of Social Welfare and Development secured P270.2 billion in funding; while the Department of Transportation will have a budget of P141 billion.

"These vetoes are honestly designed specifically for these problems. Congress is supposed to be checked by the office of the President and vice versa, so Congress becoming less tied to the President by bounds of fealty and financial dependence is supposed to be a positive development," Hansley Juliano, who teaches political science, told Esquire Philippines in a Facebook Messenger chat.