January 3, 2025
Manila – The Philippines’ P6.33 trillion (S$150 billion) 2025 national budget may face legal challenges as critics prepare to challenge allegedly unconstitutional provisions in the Supreme Court.
President Ferdinand Marcos Jr. signed the budget bill into law on December 30, saying the record-high spending plan would spur economic growth and reduce poverty.
He delayed the signing by nearly a week, citing the need for a review of the budget amid accusations by civil society groups that Congress diverted money from the education and health sectors and services that help the poor to fund their pet projects.
Mr. Marcos vetoed 194 billion pesos worth of projects in the budget that he said were “inconsistent with the government's priorities.”
But analysts and stakeholders said the president's veto did not address the alleged irregularities because the budget still failed to meet the constitutional requirement to prioritize health and education.
For example, the entire proposed P74 billion subsidy to the Philippine Health Insurance Corporation (PhilHealth), which subsidizes the medical costs of paying members and covers the costs of the non-paying poor, was slashed.
After cuts, the entire health budget in 2025 is P267.8 billion, ranking fifth among all sectors in 2025.
Lawmakers allied to Marcos argue that officials in the Philippines' health-care sector, long plagued by corruption, need to be taught a lesson about irregular spending. They said the agency can still provide health care services because it has 600 billion pesos in unused reserve funds.
However, pro-health organizations Medical Action Group and Economic Reform Action said on December 31 that they would file a lawsuit against the Marcos government for defunding PhilHealth.
They say doing so violates the National Health Care Act and sin tax laws, both of which require PhilHealth to receive annual funding from taxes on tobacco products and sugary drinks.
“The 2025 state budget is unconstitutional,” the groups said in a joint statement, adding that the budget law does not supersede other existing laws.
Economist JC Punongbayan told The Straits Times that the government may also be challenged in court by education advocates for failing to allocate the maximum budget to the sector as required by the constitution.
Dr. Punongbayan said the traditional reading of the constitution calls for the education sector to receive the largest amount of funding, but it received only P793 billion in the 2025 budget, which is lower than the P1.007 trillion allocated to the public works sector.
But the stance of the Marcos administration is that the education sector still gets the lion’s share. It calculates the entire education budget by combining the department's share and allocations for education programs administered by other agencies, and the total amount actually amounts to P1.055 trillion.
“I think this is an opportunity for the Supreme Court to formulate rules concretely because the calculation of the education sector budget has been a traditional issue rather than any specific rules,” Dr. Punongbayan said.
Lawmakers were also criticized for allocating 10 billion pesos from the Department of Education's plan to equip schools with computers and Internet access during budget deliberations in Congress.
The president does not have the power to restore funding cut by Congress.
Budget experts told ST that the funds were diverted to local infrastructure projects such as roads and bridges in lawmakers' legislative districts, as well as an unconditional cash transfer program called Akap.
Under the Akap program, minimum wage earners and poor Filipinos can receive up to 5,000 pesos each to help them cope with the impact of inflation. The budget for the program in 2024 was 20 billion pesos, but the Marcos administration increased it by 6 billion pesos in 2025.
Budget analysts say that's worrisome because politicians seeking re-election in May's midterm elections could abuse such programs and use them as “pork barrels” during their campaigns.
“Pork barreling” is the practice of allocating government funds to local programs deemed beneficial to legislators' constituents, often in exchange for political support.
“This is a legitimate campaign,” Zysa Suzara, a budget analyst at Manila-based public finance think tank iLead, told ST. “They're really just fooling the citizens.”
Mr. Marcos said the 2025 budget would boost human capital development, but Ms. Suzala noted that this was difficult to convince given the government’s deep cuts in health and education spending.
To quell accusations of pork barrel spending, Marcos said the Department of Social Welfare, Department of Labor and Department of National Economic Development would soon develop stricter Akap implementation guidelines.
But Dr. Punongbayan warned that it may be too late to do so now, as lawmakers have been heavily promoting Akap since 2024.
He added that some lawmakers have ties to construction companies that have had a monopoly on government infrastructure projects for years.
“So I expect the level of support in the run-up to the 2025 elections to be quite significant,” Dr. Punongbayan said.
However, government officials denied that the 2025 infrastructure and Akap budget allocations will be spent on the campaign.
Executive Secretary Lucas Bersamin said at a press conference on December 30 that they expected a legal challenge to the 2025 budget but expected to win in court.
“We can't prevent possible challenges from any group that might think this budget is worthy of competition,” he said.
“We believe we have worked hard to achieve this and are confident that our efforts will be sustained, barring any unforeseen challenges.”
Correction instructions: This story has been edited to clarify the limits of the powers that the Philippine president may exercise.
- Marla is the Philippines correspondent for The Straits Times and a journalism lecturer at the University of the Philippines Diliman.
