Philippine President Ferdinand Marcos Jr has asked Congress to approve a 7.2 trillion peso (US$118.1 billion) budget for 2027, a 6% increase from this year as his government seeks to revive growth following an economic slowdown and an infrastructure corruption scandal.
The proposed budget, equivalent to 21.7% of gross domestic product, comes after the Philippine economy grew just 2.3% year-on-year in the second quarter, its weakest pace since 2021. First-half growth stood at 2.6%, below the government’s 3.5% to 4.5% target for 2026.
Education remains the largest allocation at 1.15 trillion pesos, although this is 11.5% lower than this year’s budget. Healthcare funding is also set to fall 21% to 353.8 billion pesos, while agriculture funding will drop 13% to 261.7 billion pesos.
Meanwhile, the Department of Public Works and Highways is slated to receive 644 billion pesos, up 22% from this year, despite being at the centre of an infrastructure scandal that led to a sharp reduction in its 2026 allocation.
Defence spending is also set to rise 7.6% to 328.8 billion pesos, with 316 billion pesos of next year’s overall budget increase earmarked for mandatory obligations including salary adjustments for military and uniformed personnel.
The government expects 2027 disbursements of 6.9 trillion pesos against revenues of 5.2 trillion pesos, leaving a 1.7 trillion peso fiscal deficit to be financed through borrowing.
The government has set a 5% to 6% annual GDP growth target for 2027 to 2030.
Reuters
