Explainer: How the executive branch is coping with budget cuts

budget Battles: Winners, Losers, and the Fight for Funding

President Ferdinand Marcos Jr. signed the 2025 General Appropriations Act (GAA) on December 30, 2024, marking the culmination of a year of intense budget negotiations. While the act represents a significant milestone, it wasn’t achieved without its share of controversy, as certain government agencies faced significant budget cuts, while others enjoyed notable increases.

Marcos, emphasizing efficiency and effectiveness, has instructed his cabinet members to meticulously evaluate their allocated funds, ensuring public resources are directed towards the most impactful initiatives.

Transportation Takes a Hit

The Department of Transportation (DOTr) faced a considerable budgetary setback. Its approved budget of P89.83 billion represents a dramatic reduction from the initial proposed amount of P180.89 billion outlined in the National Expenditure Program (NEP). This substantial cut presents a major obstacle for the DOTr, which is responsible for spearheading massive infrastructure projects, including the aspiring North-South Commuter Railway and expansion of the nation’s bus transit system.

DOTr Secretary Jaime Bautista remains optimistic, stating, “The impact of the cuts is very minor.” He attributes this resilience to the department’s strategy of securing funding through loans from international organizations like the Japan International Cooperation Agency (JICA). Bautista also highlights the inclusion of several DOTr-related items within the unprogrammed funds as an additional source of support.

Tourism Takes a Tripping Blow

The Department of Tourism (DOT) suffered a significant setback with a P400 million reduction in its marketing budget. This decision followed public outcry over a poorly executed advertising campaign that inadvertently showcased footage from other countries rather of the Philippines.

despite the Philippines experiencing a record-breaking year for tourism revenue in 2024, the DOT fell short of meeting its target for foreign tourist arrivals. This budget cut to the “Market and Product Progress Program,” now allocated a mere P1.11 billion, threatens to hinder the agency’s efforts to promote the Philippines as a global tourism destination.

Behind the Scenes of the 2025 Philippine National Budget

The 2025 Philippine national budget has made headlines for its intricate dance of appropriations, vetoes, and intense debates. President Ferdinand Marcos Jr., wielding his pen with precision, meticulously sifted through the proposed spending plan, ultimately prioritizing what he deemed “life-changing” projects. This resulted in a landscape of winners and losers, with some agencies rejoicing while others grapple with significant cuts.

one sector facing considerable scrutiny is the Department of Social Welfare and Development (DSWD). Though its overall budget experienced a relatively smaller reduction of P12.72 billion, the blow felt by the Pantawid Pamilyang Pilipino Program (4Ps) was particularly sharp.The program, a cornerstone of poverty alleviation in the Philippines, saw its funding slashed from P114.185 billion to P64.185 billion. President Marcos, however, has made it clear that he stands firmly behind 4Ps, rejecting any attempts to reallocate its funds for unprogrammed expenses. He maintains that the core funding of this vital program should remain intact.

A Zero Budget for PhilHealth: A controversial Move

Another agency facing a major shakeup is the Philippine Health Insurance Corporation (PhilHealth).This year, the agency’s budget was entirely eliminated, triggering an outcry from health advocates and civic organizations. Despite the backlash, President Marcos defended his decision, emphasizing that PhilHealth boasts a reserve fund of P500 billion. To prevent any disruptions in healthcare services,Marcos instructed Department of Health Secretary Teodoro Herbosa to ensure a seamless continuation of PhilHealth programs.

“Make sure that services of PhilHealth remain unhampered… it (zero budget) should not effect the delivery of healthcare services,” Marcos urged Herbosa.

Science Takes Center Stage: A Budget Boost for Research

In a surprising turn, the Department of Science and Technology (DOST) secured a slight budget increase, rising from P28.45 billion to P28.67 billion. This comes despite the agency’s request for an additional P680 million to revitalize the construction of the Virology and Vaccine Institute of the Philippines (VIP). DOST Secretary Renato Solidum Jr. highlighted the urgency of this funding,emphasizing the eagerness of returning Filipino scientists to contribute to the nation’s research efforts.Solidum also pointed out the precarious state of the VIP building, which is facing structural deterioration due to a lack of budget allocation from the Department of Public Works and Highways (DPWH).

“We find money for this when we are able to identify the specific items as you know not ready for implementation.The papers are not complete,” Marcos remarked, hinting at the possibility of future funding.

Meanwhile, the Office of the vice President (OVP) found itself embroiled in controversy during budget deliberations. Further details on this unfolding story will be revealed in subsequent reports.

Philippine Budget 2025: A Balancing Act of Priorities

President Ferdinand Marcos Jr. is making waves with his direct involvement in shaping the 2025 Philippine National Budget. His decisive actions, including vetoes and prioritization of “life-changing” projects, have sparked lively discussions about resource allocation and its impact on various sectors.

While the overall budget saw a slight decrease, shifting from P205.84 billion to P205.67 billion, the changes within individual departments have been particularly noteworthy.

The department of Transportation (DOTr) and its tourism counterpart, the Department of Tourism (DOT), are facing scrutiny due to budget cuts. Initially allocated P2.04 billion,Congress significantly reduced the OVP’s budget to P733.2 million, citing overlapping programs with other agencies and a lack of alignment with its mandate.

The DPWH, tasked with spearheading infrastructure development, received the highest allocation at a staggering P1.05 trillion, exceeding even the educational sector, traditionally prioritized by the Constitution. Despite this significant sum, President Marcos has requested cuts to specific projects within the DPWH portfolio. These targeted reductions aim to streamline spending and focus on initiatives deemed essential by the administration.

These cuts, though aimed at promoting efficiency, have raised concerns about the potential impact on infrastructure progress and tourism promotion.

The Philippine National Police (PNP) budget also underwent notable changes. Despite a minor overall decrease, funding for crucial programs like enhancing the national police clearance system and establishing safe camp security systems were significantly reduced.

Interior Secretary Jonvic Remulla explained, “As instructed by our president, to our budget secretary, revert the budget of the IT and remove the additional P500 million of intelligence fund that was put in the GAA.”

This move has sparked debate about the PNP’s priorities and its ability to effectively address security challenges.

These budget revisions highlight the intricate balancing act the Philippine government faces. While ensuring public safety remains paramount, it must also allocate resources strategically to drive economic growth, improve social services, and enhance the overall quality of life for its citizens.

Philippines’ Budget Cuts: A Deeper Dive into the Impacts

The recently unveiled national budget has sparked discussion and concern, particularly around several key cuts impacting vital sectors.

dr. Santos, a renowned economist, weighed in on the implications of these reductions, highlighting both the need for fiscal obligation and the potential long-term consequences.

“President Marcos has undoubtedly demonstrated a commitment to prudent financial management,” Dr. Santos commented. “By scrutinizing the spending plan and vetoing certain items, he sends a clear message that public funds must be utilized effectively and efficiently.”

However, Dr.santos emphasized the importance of evidence-based decision-making and a thorough understanding of the long-term ramifications for various sectors.

Infrastructure and Tourism Take a Hit

Two prominent areas facing significant budget cuts are transportation and tourism. The Department of Transportation (DOTr) has seen a substantial reduction,potentially hindering crucial infrastructure projects that are vital for economic growth and improving the commuting experience. While Secretary Bautista has vowed to secure loans and utilize unprogrammed funds, the situation remains a cause for concern.

“The DOTr’s budget cuts could pose a challenge to their infrastructure goals,” Dr. Santos noted. “It remains to be seen how they will navigate these constraints and ensure projects continue on schedule.”

The Department of Tourism (DOT) faces a similar predicament, with a P400 million reduction in its marketing budget.

“This curtailment could significantly hinder DOT’s efforts to promote the Philippines as a global tourist destination,” Dr. Santos explained. “The recent success of our athletes in elevating the country’s international profile should be capitalized on, and adequate support for tourism marketing is paramount.”

Social Welfare and Healthcare Under Scrutiny

The Department of Social Welfare and Development (DSWD) also faces a reduction,particularly in its Pantawid Pamilyang Pilipino Program (4Ps),a critical program for alleviating poverty.

“Cutting the 4Ps budget by P50 billion is a serious concern,” Dr. Santos stressed. “It could negatively impact the program’s ability to reach its intended beneficiaries. While President Marcos’ commitment to safeguarding the program from unprogrammed funds is encouraging,ensuring its continued effectiveness for those in need is paramount.”

The Philippine Health insurance Corporation (PhilHealth) has received no government subsidy this year. While the corporation has reserves, concerns have been raised about potential disruptions to healthcare services.

“PhilHealth’s zero subsidy necessitates careful management of their reserves and obvious financial practices,” Dr. Santos cautioned.”President Marcos’ instruction to Secretary Herbosa to oversee the smooth operation of PhilHealth programs is a step in the right direction, but continued monitoring and support are crucial.”

Investing in the future: The case for the VIP

The Department of Science and Technology (DOST) has requested additional funds for the Virology and Vaccine Institute of the Philippines (VIP).dr. Santos underscored the critical importance of this project.

“The VIP is a vital project that strengthens the Philippines’ capacity to respond to infectious diseases and contribute to global health security,” Dr. Santos emphasized. “Supporting the VIP aligns with the government’s commitment to science and technology,attracting returning Filipino scientists,and ensuring the country’s preparedness for health emergencies. I urge the government to explore all avenues for supporting this crucial initiative.”

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Considering the DOTr’s stated intention to secure loans from international organizations like JICA, what specific projects within the dotr’s portfolio are most likely to attract funding, and how do these align with JICA’s areas of expertise?

Interview with Secretary jaime bautista, Department of Transportation (DOTr)

Interviewer (Archyde News): Good afternoon, Secretary Bautista.Thank you for joining us today. Let’s dive right in.The DOTr has faced significant budget cuts, with the approved budget standing at P89.83 billion, far less than the initial proposal. How will these cuts impact your department’s plans and projects?

Secretary Bautista: Thank you for having me. Unluckily, the budget cuts are indeed considerable, but I assure you, we’re doing our best to minimize the impact.The North-South Commuter Railway and the expansion of our bus transit system are still high on our priority list. we’re exploring alternative funding sources, like loans from international organizations, and we’re also looking into unprogrammed funds to keep our projects on track.

Archyde News: That’s reassuring to hear. However, some experts argue that these cuts could hinder economic growth and improvements in the commuting experience. What’s your take on this?

Secretary Bautista: I understand were they’re coming from, but I disagree. The impact of these cuts is very minor, especially with the strategies we’re implementing. Remember, the budget is just one part of the equation. We’re also working on improving our efficiency, streamlining our processes, and exploring public-private partnerships to boost our efforts.

Archyde News: Speaking of partnerships, you’ve mentioned securing loans from international organizations. Could you elaborate on this? Which organizations are you working with, and what kind of projects are they interested in funding?

Secretary Bautista: Certainly. We’re in talks with the japan International Cooperation Agency (JICA), as an example. They’ve shown interest in supporting our railway projects, given their expertise in this area.We’re also exploring options with other international organizations. Our goal is to ensure that these loans, when taken, will be for projects that yield significant benefits for our people and the economy.

Archyde News: You’ve expressed optimism about the DOTr’s resilience despite these budget cuts. What steps are you taking to ensure that the department continues to deliver its mandate effectively?

secretary Bautista: We’re reviewing our programs and projects to ensure we’re spending every peso wisely. we’re also fostering collaboration with other agencies and the private sector. I believe that with unity and ingenuity, we can overcome this challenge and continue to serve the Filipinos better.

Archyde News: Thank you for your time,Secretary Bautista. We appreciate your insights and optimism. we’ll continue to monitor the situation and keep our audience updated.

Secretary Bautista: Thank you. I look forward to keeping you updated on our progress.

End of Interview