Philippines: $4.3 billion set for kickbacks-laden projects

Manila: Unprogrammed appropriations (UA) totalling a staggering $4.3 billion (₱250 billion) under the proposed ₱6.793 trillion ($116.7 billion) 2026 national budget – passed by the House on Monday – have instantly become the focal point of intense public debate and scrutiny.

What are unprogrammed appropriations?

In general , it refers to “standby funds” – authorised by Congress (with their so-called "power-of-the-purse" Constitutional mandate) but without definite sources of funding at the time the budget is prepared. 

Mask for kickbacks

In short, UA is a mask for kickbacks-driven projects.

Here's why:

Historically, many projects funded by UA have been linked to inefficiencies, tongpats, or outright “ghosts” – including scam flood defences exposed by recent Senate investigations.

On Tuesday (October 14), the presidential palace has stated that UAs are needed, as calamity funds run low. In a press briefing, Malacañang Press Officer Claire Castro allayed some lawmakers’ concerns over the possibility that UAs could be used as a “pork barrel” or “magic fund.”

“The government, especially the DBM, believes that the budget —particularly the unprogrammed appropriations — is necessary, now more than ever,” Castro said.

Where do the UA funds come from?

It’s from Filipino taxpayers.

It may also be sourced from extra government income, or loans, which are 100% guaranteed by the people.

Meaning, if a president or a cabal of public officials steal the borrowed funds, the Filipino people are duty-bound to pay the loan to the last centavo, including interest.

That’s what happened to the $2.3 billion loan from US Eximbank used to build the kickbacks-laden Bataan Nuclear Power Plant construction (1976 to 1984) which, upon completion, was neither energised nor produced a single Watt of electricity.

Concerns over UA

As a result of the House passage of the ₱6.793 trillion budget for 2026, concerns over UA and “pork barrel” projects have gained greater prominence.

Speaker Faustino “Bojie” Dy III acknowledged the bill, House Bill No. 4058, is “not perfect” but emphasised that transparency was a key goal. 

He assured the plenary that “nothing was hidden, nothing was concealed,” and the budget aims to deliver accountability by returning every peso of taxpayers’ money in the form of services, opportunities, and hope.

The bill includes a record ₱1.28-trillion allocation for the education sector— the highest ever in Philippine history. 

₱255-billion cut in DPWH budget

The House also kept a ₱255-billion cut from the Department of Public Works and Highways (DPWH), reallocating most of these funds to priority sectors like agriculture (+₱53.7 billion) and health (+₱90.7 billion).

However, it cut the Office of the Vice President’s budget to ₱733 million after Vice President Sara Duterte declined to defend the proposed allocation. 

Suansing: Chair of Appropriations

Nueva Ecija Rep. Mikaela Suansing, chair of the Appropriations Committee, described the budget cycle as unprecedented, noting reforms such as inviting civil society watchdogs as nonvoting observers and replacing the traditionally secretive small committee with a public Budget Amendments Review subcommittee.

Why certain lawmakers opposed the bill

Despite these promised budget “reforms”, the 12 lawmakers opposed the bill.

The reason: The retention of ₱250 billion ($4.3 billion) itemised as UA. Critics view UA funds as ripe for misuse and patronage.

Many, including government watchdogs and civil society groups, have calle for their abolition.

Opposition lawmakers like Caloocan Rep. Edgar Erice questioned why the substantial UA funds remain.

Akbayan Reps. Perci Cendaña and Chel Diokno sharply criticised the lack of clarity regarding UA expenditures. 

ML (Mamamayang Liberal) Party-list Rep. Leila de Lima echoed calls for zeroing out the UA and outright rejection of allowing its allocation.

Shortfalls

Beyond unprogrammed funds, lawmakers highlighted shortfalls in supporting the vulnerable and marginalised. 

Kabataan Rep. Renee Co pointed out that daily allocations for students amounted to about ₱100 compared to ₱2,522 for policemen and ₱4,629 for soldiers. 

Patronage budget: ₱881.3 billion for DPWH

Gabriela’s Sarah Elago and ACT Teachers’ Antonio Tinio echoed watchdog who condemned congressional “pork” embedded in the DPWH’s ₱881.3-billion budget – noting legislators receive guaranteed shares: around ₱230 million per congressman and ₱3.2 billion per senator — funds that are often linked to promoting patronage.

They also assailed the ballooning budgets for so-called “social welfare programmes” that promote patronage politics, including

• Assistance to Individuals in Crisis Situation (AICS), 

• Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD), and 

• Medical Assistance for Indigent and Financially Incapacitated Patients (MAIFIP).

How corruption in MAIFIP happens

Corruption in the MAIFIP scheme occurs through political patronage, where funds are used for vote-buying disguised as charity (capitalising on "utang na loob", i.e. debt of gratitude, in Filipino culture), and favouritism. 

Critics also point to the programme's discretionary nature, which makes it susceptible to political manipulation and undermines the broader, more systematic role of the Philippine Health Insurance Corp. 

This systemic issue is characterised by a lack of transparency, fragmented monitoring, and a widening gap between the programme’s original intent and its actual implementation.

Corruption-free spending: impossible?

Despite some laudable reallocations toward human capital development, budget observers and analysts voiced greater caution.

They stressed that efficient, corruption-free spending remains crucial to realising the budget’s goals. 

Critics also warn that social and economic programs still lag behind the needs of the poor and middle class, with agriculture and small businesses notably underfunded considering the government’s ambitions for rapid economic growth.

What happens next

The House budget now faces Senate scrutiny, with a bicameral conference committee (Bicam) set to reconcile differences between House and Senate versions. 

Given the bombshell revelations about the plunder of public funds via UA and budget insertions, House Majority Leader Sandro Marcos stressed plans to open bicameral talks to public scrutiny to increase transparency in the process, which has historically been closed-door, obscuring last-minute budget changes from public view.

This budget's passage concludes an intense cycle marked by heightened public demand for transparency amid unfolding corruption scandals, but debates over unprogrammed funds and pork barrel allocations underscore continuing governance challenges in the Asian country, known for its weak anti-corruption curbs.