[In This Economy] Ushering in 2026 with the first reenacted budget in 7 years: What now?

 Happy New Year!

With President Ferdinand Marcos Jr. failing to sign the national budget, we are entering 2026 with a “reenacted budget,” if only for a few days or weeks.

This is set to be the first reenacted budget since 2019. In that year, the budget was also stymied by controversies and frictions surrounding pork allocations and insertions. Old governance problems are hounding us in 2026.

What led to the 2019 reenacted budget? For starters, former budget secretary Benjamin Diokno was accused by the late representative Rolando Andaya of inserting at least P2.8 billion of infrastructure budgets that will benefit Casiguran, Sorsogon. Why Casiguran? Its mayor then was the husband of the mother-in-law of Diokno’s daughter, while Sorsogon’s vice governor then was the mother-in-law of Diokno’s daughter.

This and other budget insertions were allegedly facilitated by Amenah Pangandaman, Diokno’s closest budget undersecretary, who was said to have given a thumb drive to a Department of Public Works and Highways (DPWH) staff member containing a list of P51 billion worth of infrastructure projects. Total insertions that year allegedly reached P75 billion.

Eerily, this brings to mind the recent and alleged tug-of-war of files between Representative Leandro Leviste and the late public works undersecretary Catalina Cabral. Cabral was said to possess a list of projects that are “allocable” to lawmakers, and Representative Leviste allegedly snatched those files from Cabral’s office back in September 2025. Leviste said such files were given to him, not stolen. At any rate, it’s quite clear that the budget of the Department of Public Works and Highways is a crucial entry point of politicians’ pork, then and now.

Going back to 2019, Diokno vehemently denied the allegations levelled against him by Andaya. But not long after, Diokno stepped down and moved on to become the governor of the Bangko Sentral ng Pilipinas (a golden parachute). He brought with him Pangandaman to the BSP. Incidentally, both would figure prominently in the early Cabinet of President Marcos Jr.: in 2022, Diokno returned as finance secretary, while Pangandaman became budget secretary — until she resigned recently, in November 2025, amid the flood control scandal.

Former House speaker Gloria Macapagal-Arroyo also inserted tons of pork in the 2019 budget for her own legislative district, amounting to P2.4 billion. Reacting to this, Senator Leila de Lima, who was detained at Camp Crame at the behest of former president Rodrigo Duterte, said in a dispatch, “It is scandalous and shameless, but hardly a surprise. We do not expect anything less from Speaker Arroyo who, during her rule as President, was known for putting self-interest above public service.”

What’s more, even after the 2019 budget bicameral conference committee or bicam, the House managed to play around with the Department of Health’s budget, specifically its Health Facilities Enhancement Program or HFEP. This is highly anomalous, because Congress ought to stick with the draft bill approved by the bicam. But the House allegedly distributed the P4.5 billion allotted to the House of Representatives, chopping up that pork budget and allocating it among its members. Supposedly, much of that fund went to Arroyo’s allies (supporters of her House leadership), while a much smaller amount went to non-allies.

In total, as much as P75 billion of projects were realigned after the bicam under the Local Infrastructure Program.

This maneuver led to a budget impasse, led by Senator Panfilo Lacson, a known fiscalizer. The country entered 2019 with no new budget, and in March 2019 president Duterte met with congressional leaders to fix the deadlock. It was only later that month that the Senate submitted the enrolled bill, albeit with “strong reservations.” 

In mid-April 2019, Duterte finally signed the budget, literally unceremoniously (journalists were only informed by text message that Duterte had already signed the bill). But Duterte ended up vetoing as much as P95.3 billion worth of DPWH projects that were “not part of [his] priority projects,” and assigned some projects for “conditional implementation.” These include “the allowance and benefits of teachers and creation of teaching positions, construction of evacuation centers, funding for foreign-assisted projects, revolving fund, and lump-sum appropriations for capital outlays, as well as financial assistance to local government units and funding requirements of our foreign service.”

What now?

Fast-forward to 2026, pork hobbles the budget once more, specifically pork lodged under the DPWH.

House lawmakers tried their darndest to insert projects under the DPWH, not under flood control but mainly for farm-to-market roads (now to be overseen by the Department of Agriculture) and the HFEP (which also plays a role now — an echo to the 2019 controversy).

In a highly irregular move, DPWH Secretary Vince Dizon also appeared before the bicam to lobby the restoration of P54 billion worth of funding. This intervention by the executive created an impasse and the Senate stood its ground, leading to a full stoppage of the bicam proceedings. Eventually, the Senate allowed a partial restoration of the DPWH budget.

The ball is now with President Marcos, and as I write this the Palace is scrutinizing the enrolled budget bill for 2026. What should he do?

If he’s really committed to show the people that he’s reforming the budget (the root of all evil, so to speak), he might take a leaf from what former president Rodrigo Duterte did in 2019, and veto tons of needless pork projects that they’re not part of his priorities.

Back in December 2024, Marcos vetoed P194 billion, P168.240 billion of which were unprogrammed funds and the rest (P26.065 billion) were DPWH projects. For the 2026 budget, he will most likely veto a portion of the P243-billion unprogrammed funds as well. But this will do nothing, really, because unprogrammed appropriations can’t be spent on unless there are excess revenues or new loans.

If Marcos is really sincere, he will push for reforms to remove unprogrammed funds entirely in the 2027 budget and beyond. Cases have been filed before the Supreme Court to rule unprogrammed funds unconstitutional (because of the way they have been abused in the budget process). But Marcos will do well to move ahead of this Supreme Court decision and push Congress to pass a law banning unprogrammed funds forever.

But I doubt this will happen. If he were really sincere, he would’ve done so years ago, and stop related perversions like the plundering of the coffers of PhilHealth and the Philippine Deposit Insurance Corporation. Also, Marcos knows that bringing home pork projects is the primary game played in the House of Representatives, and his relatives benefitted from this scheme of late. In fact, a report of the Philippine Center for Investigative Journalism (PCIJ) found that a big bulk of “allocable” projects went to Marcos’ son Sandro and cousin Martin Romualdez.

All in all, the 2026 budget is more of the same. They removed flood control allocations but made up for it in other ways. But truth be told, I’m not really disappointed: in the first place, I didn’t have my hopes up that significant reforms will take place. – Rappler.com

Dr. JC Punongbayan 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).

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