We’re days away from President Ferdinand Marcos Jr.’s scheduled signing of the controversial and anti-Filipino 2025 budget. Supposed to be done before Christmas, the signing is now slated for Monday, December 30. (For a recap of how bad the budget is, read this previous column.)
Before and after Christmas, the Palace released photos of Marcos and his select Cabinet officials poring over documents at Bahay Pangarap, the presidential residence, supposedly to review the 2025 budget and try to remedy it before the signing.
On December 26, Executive Secretary Lucas Bersamin said, “The President and the Cabinet are RIGHT NOW (with or without the calls) thoroughly reviewing the various items of the [General Appropriations Bill] to make them conform to the Constitution, and to see to it that the budget prioritizes the main legacy thrusts of the administration.”
Is this an implicit admission that the budget bill, as crafted by Congress, is unconstitutional and contrary to the president’s priorities? If so, how come they seem to have been caught off-guard, and are now cramming to find ways to fix the budget?
More importantly, they’re not admitting that their options now are severely limited. In this piece, let’s break down the dilemma now faced by Marcos concerning the 2025 budget, and what he can realistically do.
First, Marcos could always sign the 2025 bill approved by Congress.
But doing so will endanger the country and the economy, for all the reasons I and other economists and analysts laid down before: not only will it defund key spending priorities, but it will also empower the politicians running in the 2025 polls (and enrich incumbents whose businesses can corner government projects).
The biggest problem for Marcos, however, is a technical one: As it stands, the budget bill is unconstitutional because education did not receive the lion’s share of appropriations — contrary to the Constitution’s mandate. If you crunch the numbers, all education agencies combined received a budget lower than what the Department of Public Works and Highways (DPWH) got.
One lawmaker, Zambales 1st District Representative Jay Khongun, did math magic to show that this is not the case. What he did was to add up the budgets of the three main agencies concerned with education (the Department of Education, Commission on Higher Education, and the Technical Education and Skills Development Authority), as well as the budget of all state universities and colleges and other agencies that are not normally added in computing education’s share (including the Local Government Academy, the Philippine National Police Academy, the Philippine Military Academy, and even the Philippine Science High School). He claimed that all these agencies had a collective budget of P1.056 trillion, larger than the DPWH’s P1.034 trillion.
But this was only possible because, for no good reason, he discounted the DPWH’s budget for its “salary differential” and “convergence projects” — a massive cheat. (See screenshot below.)
One more complication is that, as I and many others pointed out before, reducing PhilHealth’s subsidies to zero seems to violate the Constitution and two statutes.
All in all, signing into law the 2025 budget bill as is opens up Marcos to so many court challenges next year before the Supreme Court.
Another option is to just not sign the budget, in which case we’ll work with a “reenacted budget” early next year.
This option, afforded by the Constitution, means that the 2024 budget shall essentially be recycled and “shall remain in force and effect until the general appropriations bill is passed by the Congress.”
On December 23, the Palace said that that Marcos isn’t keen on a reenacted budget, and for good reason: many government agencies will have to work with the 2024 budget, they may not have access to funds they need for new programs or policies they plan to implement next year.
We’ve been down this path before. The last reenacted budget was in 2019, because lawmakers failed to pass the spending plan on time in December 2018. In March 2019, then-secretary Ernesto Pernia of the National Economic and Development Authority warned that the reenacted budget may pull down economic growth. More specifically, they projected that “we will miss the opportunity to create as much as 180,000 to 240,000 more jobs, and fail to lift as much as 400,000 to 550,000 more Filipinos out of poverty” that year. He appealed to Congress to hasten the approval of the budget, adding that, “The longer we wait, the more adverse the effect will be.” It was not until April 15, 2019 that Duterte signed the budget bill into law.
A similar fate awaits us if Marcos works with a reenacted budget next year. But slower growth arising from a reenacted budget might be offset by a boost from election spending.
Another drawback of a reenacted budget is that funding for big-ticket infrastructure projects may be put on hold. But this, funnily enough, is not much of a concern, because the 2025 budget itself sabotaged Marcos’ infrastructure program by putting many big-ticket projects in the “unprogrammed appropriations.” The truth is, Marcos himself is undoing his own Build Better More project.
Another recourse is for Marcos to do so-called line-item vetos. The Constitution provides: “The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.”
But this raises the question: What line items, if any, should Marcos veto? Note that a line-item veto allows the President to remove portions of the budget. But he can’t add to any that he thinks must be funded.
This presents a problem because Congress decided to cut huge chunks of the budget for education, health, and social protection projects. So line-item vetos won’t be able to fund programs and projects whose items weren’t present to begin with.
Take for instance the eradication of state subsidies to the Philippine Health Insurance Corporation or PhilHealth. There’s no line item to veto, because the line item for PhilHealth was absent at the outset.
The same goes for the removal of the computerization program of DepEd — an act that Senator Grace Poe, chair of the Senats finance committee, stupidly justified by saying: “We prioritized human resources. Ang kaguruan at mga estudyante ang puso at diwa ng sektor ng edukasyon, hindi ang mga kompyuter (The heart of education is its teachers and students, not computers).”
Line-item vetoes also won’t amend huge cuts to programs and projects that are still funded but with much smaller amounts. This applies to, say, the Pantawid Pamilyang Pilipino Program (4Ps), whose budget was cut by P50 billion, as well as CHED, whose budget was cut by almost P27 billion (endangering the implementation of the free tuition law).
Finally, the line-item veto won’t be able to fix the fact that Congress decided to dump the line items for so many big-ticket infrastructure projects into the so-called “unprogrammed appropriations,” which ballooned to a whopping P531.7 billion. These are items that should have been prioritized in the budgets of the DPWH and the Department of Transportation (DOTr) — if Build Better More is to have any chance of success.
The President could line-item veto portions of the DPWH budget, which increased by P288 billion, thanks to the bicameral conference committee, in a bid to insert lawmakers’ pork barrel projects. However, if Marcos does so, he risks earning the ire of lawmakers whose pet projects will be threatened next year. This could undermine the supermajority that his cousin, House Speaker Martin Romualdez, currently commands.
A final option is for Marcos to veto the entire budget bill, otherwise known as an “absolute veto.” This will mean that we’ll have a reenacted budget for 2025, and Congress will have to craft a new and improved budget that’s more in line with the President’s objectives and priorities for the country.
If you think of it, then, a simpler way to arrive at a reenacted budget is for Marcos to just not sign the budget bill by year-end. However, vetoing the entire budget allows him to articulate his frustration over the way that Congress crafted the budget, essentially telling them to go back to the drawing board and pull themselves together.
The problem is, will Marcos have the guts to send back the budget bill and express his frustrations? Does he have any frustrations at all, or is he just constrained because the budget bill stands to be patently unconstitutional?
Finally, let me note here that Marcos can’t legitimately denounce the budget he and his first cousin, Speaker Romualdez, should have steered in the right direction in the first place. It’s impossible that Marcos was unaware of what Romualdez and his colleagues in Congress did with the budget. At any rate, there are mechanisms for continuous feedback and collaboration between the Palace and the House throughout the entire budget process. Marcos’ economic advisers should also have raised red flags in the past several months, if they’re truly doing their jobs.
Marcos can’t feign ignorance or surprise about how the f*cked up the 2025 budget turned out. Whatever decision he takes on Monday, December 30, Marcos should be made accountable for all the things he did (or failed to do). – Rappler.com
JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. In 2024, he received The Outstanding Young Men (TOYM) Award for economics. Follow him on Instagram (@jcpunongbayan) and Usapang Econ Podcast.
