DBCC Briefing

Inflation path, policy response, and outlook: Governor Eli M. Remolona Jr. said BSP's primary mandate is price stability and described global supply shocks—especially higher oil and food prices linked in the briefing to the conflict in Iran—as the immediate inflation challenge. He said BSP cannot control oil prices directly and is focused on limiting second-round effects. Deputy Governor Zeno Ronald R. Abenoja said inflation rose from 2.4% in February 2026 to 7.2% in April before easing to 6.2% in July. BSP raised its target policy rate by 25 basis points in April and again in June, from 4.25% to 4.75%, to anchor expectations and contain spillover effects while complementing fiscal measures. Abenoja recalled BSP's June forecast of average inflation at 6.4% for 2026, 4.5% for 2027, and 3.1% for 2028, while noting that the outlook would be updated after that day's Monetary Board meeting. He cited volatile oil prices and weather disturbances as risks, and said BSP remained prepared to act if needed.

Banking, payments, and financial inclusion: BSP described banks as well-capitalized, adequately provisioned, and liquid. It reported that digital payments accounted for almost 65% of retail transactions by volume in 2025, while basic deposit accounts exceeded 28 million by March 2026 and were offered by more than 170 banks.

External buffers and 2027 assumptions: The presentation described current-account and balance-of-payments deficits as manageable with support from remittances, BPO and tourism receipts, foreign investment, and international reserves. It put reserves at about $103 billion, equivalent to 6.7 months of imports and 3.7 times short-term obligations, and said the 2027 assumptions reflected elevated but easing inflation, oil-price uncertainty, fiscal consolidation, a cautious US Federal Reserve stance, and modest export growth amid trade uncertainty.

Economic conditions, jobs, and inflation: Balisacan said the proposed 2027 budget must protect earlier gains, address implementation and structural bottlenecks, and restore faster, durable, inclusive growth. He reported average real GDP growth of 5.1% a year from 2010 to 2025, versus 4.2% in the preceding 15 years, and 5.8% from 2022 to 2025. But momentum weakened in the second half of 2025 and growth slowed to 2.6% in the first half of 2026. He said the country had reached upper-middle-income status in 2025, with GNI per capita of USD4,850 above the World Bank's USD4,636 threshold, but said that status must translate into better jobs, incomes, and living standards. He attributed the slowdown largely to weak domestic demand as governance and corruption concerns and the Middle East conflict weighed on confidence: domestic demand grew 1.5% in the first half of 2026, versus 5.7% a year earlier; investment fell 6.5%, household-consumption growth eased to 2.9%, and exports grew 10%. Services remained the main source of growth while industry contracted and agriculture contributed modestly. Balisacan said the post-pandemic expansion created 4 million net jobs between the first half of 2022 and the first half of 2026, but employment then fell by 166,000 over the past year and unemployment rose from 3.1% to 4.2% in June 2026. He reported that official 2025 estimates put poverty incidence at 9.7%, down from 15.5% in 2023, with 6.5 million Filipinos lifted out of poverty through recovering incomes and employment and sustained social-protection programs. He cautioned that these gains remain vulnerable to high inflation. He said inflation had surged from March because the Middle East conflict affected global oil and commodity prices; headline inflation was 6.2% in July, down from 6.4% in June but still above the government's target range. High food prices, he said, weigh disproportionately on poor and low-income households and could reverse recent poverty-reduction gains.

Growth constraints, outlook, and 2027 investment response: Balisacan identified heavy reliance on household consumption and services as a structural constraint, with fixed investment, net exports, agriculture, and industry contributing less. He said growth must be broadened by strengthening investment and exports and revitalizing agriculture and industry; the Philippines still trails several ASEAN peers in fixed investment and exports. He argued that greater investment and export competitiveness require reliable, high-quality infrastructure. Although productive-infrastructure spending has risen, he said the spending had not fully yielded stronger infrastructure competitiveness, so project selection, appraisal, procurement, implementation, and maintenance must improve. He also said improved innovation rankings had not translated into stronger productivity relative to regional peers, calling for stronger links among research, skills development, technology adoption, commercialization, and production. Balisacan said the Philippine Development Plan remains the guide and that the administration's final two years should focus on implementation, bottlenecks, and concrete results. DEPDev projects growth of 3.5% to 4.5% in 2026 and, with faster public-program and infrastructure execution, better domestic supply conditions, and restored confidence, 5% to 6% over the following two years. He said inflation is expected to stay elevated in 2026, ease to 4% to 5% in 2027, and return to the 2% to 4% target range by 2028. He identified risks from delayed public investment and underspending, continuing governance concerns, severe weather affecting food production, the Middle East conflict, and geopolitical and trade tensions. His near-term priorities were targeted, timely help and stronger food supply for vulnerable households; catch-up plans for high-impact infrastructure; and transparency, accountability, monitoring, and efficient resource use. He said limited resources should go to implementation-ready investments in learning poverty and classrooms, future-ready skills, primary health care, farm productivity, and transport, logistics, energy, and digital infrastructure, while safeguarding fiscal sustainability through coordinated planning, budgeting, execution, spending efficiency, and tax and customs modernization.

Structural reform and legislative agenda: For longer-term growth, Balisacan called for structural reforms to improve productivity and competitiveness. He listed reliable and affordable energy through renewable generation, grid modernization, streamlined net metering and permitting, and stronger electricity-market competition; higher-value global-value-chain activity, stronger multinational-domestic linkages, services advantages, and export access; and deeper financial and capital markets for long-term financing. He said legislation is indispensable and listed governance and anti-corruption measures touching political dynasties, the party-led system, freedom of information, bank secrecy, and public budgeting; tax and coconut and fisheries measures; EPIRA and waste-to-energy amendments; and education, health, and social-protection measures on nutrition, classrooms, access to education, and support for vulnerable Filipinos.

Fiscal framework, revenue performance, and non-tax revenue: DOF Secretary Frederick D. Go said the administration inherited P12.79 trillion in debt in 2022 and adopted a medium-term fiscal framework to reduce deficit and debt while supporting growth. He said the fiscal-consolidation target was to lower the deficit-to-GDP ratio from 5.4% in 2026 to 3.5% by 2030. Go reported average annual total-revenue growth of 10.54% and tax-revenue growth of 10.47% over the prior four years, compared with 9.6% nominal GDP growth. As of June 2026, he said revenues had reached 49.7% of the full-year target and first-half tax collections were P2.14 trillion, 5.4% above the prior-year period. He said the 16.6%-of-GDP revenue effort was among the region's highest and projected total national-government tax revenues of P4.4 trillion for 2026. Go identified privatization of idle or non-core government assets as an additional revenue source. He reported P36.27 billion in 2025 sale proceeds from the Kaliraya-Botocan-Kalayaan hydroelectric plant and a P1 billion July 2026 sale of government-owned properties at the Atrium of Makati. He also said GOCCs had been asked to remit 75% of annual net earnings as dividends to the national government.

Deficit, debt management, and 2027 reforms: Go reported PHP3.175 trillion in first-half 2026 disbursements, or 49% of the full-year program, and said constrained resources should go to higher-quality expenditures with greater multiplier effects rather than simply lower spending. He said the first-half 2026 deficit-to-GDP ratio was 5.46%, compared with 5.65% in the same period a year earlier, and projected a 5.45% full-year ratio. He reported 2025 national-government debt at 63.2% of GDP and general-government debt at 56.8%. He described the debt mix as 67% domestic, 90% fixed-rate, and 84.1% long-term, which he said reduced foreign-exchange and interest-rate exposure. Go also said sovereign credit ratings remained investment grade, with R&I and Moody's recently affirming ratings with stable outlook, and reported planned January 2027 inclusion of peso-denominated government bonds in JPMorgan's Government Bond Index Emerging Markets. He said the inclusion would increase demand, improve liquidity, and help lower government borrowing costs. For 2027, Go projected borrowing requirements of PHP3.3 trillion, with 72% or about PHP2.4 trillion sourced domestically and the balance from external loans and global bonds. He projected average annual tax-collection growth of 9% from 2026 to 2028 and total revenues of PHP5.5 trillion by the end of the President's term. He cited the proposed Multinational Minimum Tax Bill and General Tax Amnesty Bill, and said spending should grow moderately while prioritizing high-return investments in infrastructure, health, education, and long-term productive capacity. Alongside the projected deficit decline from 5.4% in 2026 to 3.5% in 2030, he projected national-government debt to ease from 65% to 63% of GDP and general-government debt from 59% to 56% by 2030.

2027 framework, programmed spending, and fiscal discipline: Acting DBM Secretary Kim Robert C. De Leon presented a proposed PHP7.2 trillion fiscal-year 2027 national budget, equal to 21.7% of GDP and described as 6% above the 2026 GAA. He said much of the increase reflects mandatory expenditures and existing commitments, including higher national tax allotments for LGUs, the fourth salary-adjustment tranche for civilian employees, and corresponding military and uniformed-personnel pay increases. De Leon stressed that the overall increase is not uniform across agencies: limited fiscal space requires choices for implementation-ready programs with the greatest impact and value. He said agencies submitted more than PHP11 trillion in requests, and DBM used actual budget performance and implementation capacity, as well as funding needs, in determining allocations. De Leon reported that, as of June 30, 2026, PHP7.54 trillion in appropriations was available, PHP6.63 trillion had been released as allotments, PHP3.29 trillion had been obligated, and 81.9% of those obligations had been disbursed. The 2027 proposal consists of PHP4.494 trillion in programmed appropriations and PHP2.706 trillion in automatic appropriations. He listed major automatic items including PHP1.32 trillion for the LGU national tax allotment and PHP1.114 trillion for interest payments. He said unprogrammed appropriations would be PHP112 billion, the lowest proposed level since 2019, and are standby authority rather than automatic spending; they are mainly limited to restoring a PDIC fund balance and foreign-assisted projects still under review. By expense class, he reported PHP2.944 trillion in MOOE, PHP1.982 trillion in personnel services, PHP1.16 trillion in capital outlays, and PHP1.114 trillion in financial expenses, while describing a gradual fiscal-consolidation path that does not reduce the deficit at the expense of growth.

Social services, local funding, and education: De Leon said social services would receive the largest sectoral share, PHP2.456 trillion or 34.1%, while economic services would receive PHP1.833 trillion or 25.5%. He reported PHP1.533 trillion for LGUs, including PHP1.32 trillion in national tax allotments, and said PHP4.603 trillion, or 63.9% of the proposed budget, is directly attributable to regions; nationwide allocations are not the same as Metro Manila allocations because they are later distributed across regions. Education is the largest agency allocation: DepEd would receive PHP975.96 billion, higher education PHP176.5 billion, and total basic and higher education spending PHP1.326 trillion, nearly 4% of GDP. He said the difference from the PHP1.314 trillion in the President's budget message results from later-available BARM education figures, not a change in the submitted NEP. Specific education items include PHP12.09 billion for the expanded career-progression system for public-school teachers and PHP61.1 billion for universal access to quality tertiary education.

Infrastructure, transport, and food security: De Leon said the 2027 Build Better More infrastructure program proposes PHP1.467 trillion, or 4.4% of GDP, across public works, transport, agriculture, education, defense, health, and digital infrastructure. DPWH would receive PHP643.95 billion, including cited allocations for the Laguna Lakeshore Road Network, Bataan-Cavite Interlink Bridge, Davao City Bypass, Cebu-Mactan bridge and coastal road, and Pasig-Marikina River Channel Improvement projects. He reported PHP300.96 billion for DOTr and attached agencies, including the North-South Commuter Railway, Metro Manila Subway Phase 1, MRT-3 rehabilitation, Cebu Bus Rapid Transit, Davao public transport modernization, Cebu International Container Port, and Dumaguete Airport. He also reported PHP261.7 billion for agriculture to support food security, productivity, and livelihoods.

Health, social protection, security, resilience, and local support: For health, De Leon reported PHP353.8 billion for the sector, including PHP107.29 billion for DOH regional hospitals and other facilities and PHP74.45 billion for PhilHealth and universal-health-care implementation. He said the latter supports benefit-package expansion and zero-balance billing in DOH and LGU hospitals, with participating LGU hospitals expanding from six in the current year to 352 nationwide in 2027. He reported PHP241 billion for DSWD, including PHP99 billion for Pantawid Pamilyang Pilipino Program; PHP328.8 billion for national defense, including PHP50 billion for the revised AFP modernization program; PHP45.51 billion for the Coast Guard; and PHP86.27 billion for the judiciary. Resilience funding includes PHP45.67 billion, including PHP14.67 billion for disaster rehabilitation and reconstruction assistance for LGUs and PHP1 billion for the People's Survival Fund. He also identified the PHP1.32 trillion LGU national tax allotment, PHP115.62 billion for Bangsamoro peace, self-governance and development, and PHP58.53 billion for the Local Government Support Fund.

A back-to-basics 2027 budget: Committee on Finance Chair Joseph Victor "JV" Ejercito framed the 2027 National Budget review around basic needs—health, education, food, livelihoods, security, and infrastructure—and called for a long-term infrastructure plan linking roads, railways, airports, seaports, and communities. He said the committee would test each proposed allocation for necessity, reasonableness, readiness, completion, and accountability.

Transparency and budget safeguards: Ejercito said individual amendments should be made on the floor and committed to prohibit last-minute bicameral conference insertions. He also said the committee would continue livestreaming bicameral proceedings, maintain the Senate Budget Transparency Portal, and work with civil society and the academe in monitoring requested programs and funds.

Health and universal health care: Ejercito said health-care implementation would be among the committee's highest priorities. He said it would scrutinize the Health Facilities Enhancement Program budget for stronger local hospitals and primary care, and that universal-health-care revenues should be fully allocated and released only for their intended purposes.

Defense readiness target: Ejercito said the defense budget should support a minimum credible defense posture, including readiness and modernization. He said the committee would support the Armed Forces' operational and modernization requirements while working toward a long-term objective of raising defense spending to 2% of GDP.

Peso movements and imported inflation: Sen. Erwin Tulfo asked whether the peso could return below PHP60 to the dollar, citing PHP61.72 as that day's rate and the cost of imported oil, food, raw materials, and fertilizer. Governor Eli M. Remolona Jr. said sharp peso depreciation has a larger inflation effect, so BSP manages sharp movements; he said it could not fix the rate at PHP60 without risking reserve and dollar depletion. He cited a trade deficit of about 13% of GDP and weak exports as part of the constraint.

Exports, savings, and external borrowing: Tulfo asked what could improve the exchange-rate situation beyond remittances, pointing to slow exports and congested export containers. Remolona said strengthening exports could help, citing PAX Silica and the Luzon Economic Corridor as examples while cautioning that this would take time. He also described the savings rate and a persistently negative current account as long-term constraints; when Tulfo compared spending above income to a household budget, Remolona said investment exceeding savings leads to foreign borrowing.

Oil shock, rates, and return-to-target path: Sen. Panfilo Lacson asked whether the expected easing of inflation rests on lower oil prices and a stable exchange rate, and how government can target inflation when those drivers are outside its control. Governor Eli M. Remolona Jr. agreed that global oil prices could not be changed domestically; he said oil affects fertilizer, food, and rice prices, and described the Philippines' oil-demand share as 4%. Remolona said BSP focuses on demand-side second-round effects, including service prices, because it can slow inflation there over time. In response to Lacson's request for specifics, he identified the interest rate as BSP's main tool, saying higher rates can reduce demand for services and related second-round effects; he estimated a return to 3% inflation would take two years.

Analytics capacity and enforcement: Lacson asked how the ₱162 million AMLC augmentation had helped. Remolona said ₱125 million went to AI, with other resources used for capacity building and AI expertise; the remaining difference was not explained in the exchange. Acting Director Arnold T. Kabanlit said AMLC averaged about 10 million covered and suspicious transaction reports a month, had begun an AI and advanced-analytics project with prototypes being tested, and still needed systems, hardware, software, and training. He also said enforcement proceedings involving banks in the flood-control controversy were ongoing to examine CTR and STR compliance.

Fiscal consolidation, readiness-based cuts, and social-service carryovers: Sen. Panfilo Lacson asked whether the declining ratio of the National Expenditure Program to GDP—from 24% in 2025 to 22.3% in 2026 and 21.6% in the PHP7.2 trillion 2027 proposal, with 20% projected for 2028—was a deliberate consolidation choice. Acting DBM Secretary Kim Robert C. De Leon confirmed that it was consistent with fiscal consolidation, saying DBM was focusing on spending quality, including inefficiencies and appropriations carried into a later year that agencies may no longer need. He said agencies had proposed about PHP11–12 trillion, leaving about PHP3.8 trillion not included in the PHP7.2 trillion NEP; projects without sufficient implementation readiness, feasibility studies, or engineering plans were excluded. For DPWH alone, he cited an initial PHP2 trillion proposal and about PHP1.4 trillion in projects not considered on readiness grounds. He added that lower operating expenditure reflected optimization, digitization, process streamlining, and removing bureaucratic redundancies, and agreed with Lacson that the effects cut across sectors rather than falling on one sector alone. Lacson asked why social services appeared to decline from PHP2.599 trillion in 2026 to PHP2.455 trillion proposed for 2027 and asked DBM to distinguish the current figure from continuing 2025 appropriations. De Leon said unused or unreleased 2025 GAA allotments remained valid and that unimplemented 2026 social-service projects, including school buildings and the Health Facilities Enhancement Program, would spill into the following year. He reported PHP516.6 billion in total unobligated 2025 GAA allotments and PHP83 billion in unreleased appropriations from national government agencies; he said their aggregate was about PHP600 billion, taking the comparison to about PHP3.199 trillion. He explained that unreleased appropriations meant agencies had not yet submitted release requests to DBM, and said DBM would need to confirm the social-services-only amount.

Debt rollover, borrowing, and cash buffers: Lacson noted the stated increases in interest payments and amortization and asked what drove the debt-burden increase. DOF Secretary Frederick D. Go said it reflected rollover of maturing debt; Lacson noted that amortization is not in the NEP and is financed by further borrowing. Go gave projected 2027 borrowings of PHP3.3 trillion against a PHP1.7 trillion projected deficit, explaining that the PHP1.6 trillion difference is maturing loans. Lacson said he had repeatedly sought a public explanation for why borrowings exceeded the deficit and argued that these general figures should not be classified. Treasurer Sharon P. Almanza explained that budgetary change in cash is the difference between gross borrowing and net financing: a positive figure means borrowing for a cash buffer, while a negative figure means using the cash buffer to cover the difference.

LGU dependency data and non-performing GOCCs: Lacson asked DBM to submit a list of LGUs highly subsidized or dependent on national-government support, then asked why GOCC subsidies had declined and what policy would apply to persistently non-performing GOCCs. De Leon said the GOCC allocation was down about PHP82.9 billion, primarily because a one-time PHP60 billion return to PhilHealth appeared in the 2026 GAA. Lacson argued that GOCCs with no income and continuing subsidies should be abolished or unfunded. Go said the Governance Commission for GOCCs had about 21 GOCCs it wanted to close, wind down, or absorb into agencies or other GOCCs, while acknowledging that shutdown is slow and tedious. De Leon said DBM would provide a list of subsidies for GOCCs that may not perform social-service functions. He said possible separation incentives were considered for affected personnel, and that non-social-service GOCC subsidies in the NEP were limited to bare operating personnel requirements rather than expansion.

Regional development councils and budget-calendar alignment: Lacson questioned whether the reported 63.9% regionalized budget really reflected Regional Development Council priorities, saying RDC outputs had historically reached only about 20–30% of the NEP and that national agencies implemented many allocations labeled regionalized. De Leon said DBM shared that concern and gave about 25–30% as the continuing figure. He identified two disconnects: RDC proposals go through agency central offices before reaching DBM, and local-planning and national-budget calendars are not synchronized. He said DBM and DEPDev were exploring earlier timelines and better-connected systems so more RDC-endorsed projects would reach agency proposals and the NEP. Lacson said the national budget call begins in January while RDC work may finish in October or November for the same budget year, and urged the RDC process to come first so local officials need not bring omitted requests directly to legislators. De Leon said DBM and DEPDev were working to synchronize the calendar and institutionalize the linkage through the Philippine Budgeting Code; Lacson asked for both vertical and horizontal alignment.

Evacuation-center specificity and execution readiness: Lacson challenged DBM's execution-ready standard with evacuation-center entries showing PHP180 million each for 17 regions and older PHP100 million entries, without specified locations. DBM said the items corresponded to the Ligtas Pinoy Centers Act, that OCD still had to finalize the list, and that centrally managed items required final details before implementation. Lacson cited a PHP3.06 billion sample and a historical PHP12.77 million model cost, then said he would pursue the issue with DPWH officials.

Evacuation-centre cost estimate: Before Aquino began, Sen. Panfilo Lacson added that the Office of Civil Defense's estimate was PHP75 million per evacuation centre, which he said remained far above PHP12 million even allowing for inflation.

Inflation drivers, contingency planning, and the 2027 budget: Sen. Risa Hontiveros asked why Philippine inflation was higher than in neighboring economies despite shared global headwinds. Governor Eli M. Remolona Jr. said the Philippines was more exposed because it has no domestic oil, then offered oil and AI as an explicit oversimplification. Hontiveros asked what else the 2027 budget could do to support a return to target; Remolona identified no additional obvious factor and agreed that oil and AI were the two he had named. Hontiveros argued that the inflation problem could not be reduced to oil and AI alone, pointing to external shocks, domestic supply vulnerabilities, El Nino, and drought. She asked what adjustment should guide a 2027 budget with stronger contingency planning after fiscal space had deteriorated. Remolona said BSP was conducting scenario analysis for good and bad outcomes and preparing for the worst rather than only the expected case, but did not identify a specific budget adjustment. He said other government contingency measures existed without naming them; Hontiveros said she would ask the other agencies later.

People-centred spending, debt interest, and productive investment: Hontiveros pressed officials on lower 2027 NEP allocations for classrooms, health-facility enhancement and farm-to-market roads. DBM explained that carryovers and implementation timing affected the comparison, and said its PhilHealth allocation and zero-balance-billing approach concentrated resources on benefit-package expansion and patient coverage. Hontiveros noted that the proposed increase still left continuing concerns about whether health and other social priorities were adequately funded. Hontiveros asked whether roughly PHP1.1 trillion in 2027 interest payments would constrain high-impact infrastructure and agricultural buffer-stock spending. Balisacan confirmed the broad figure with qualification that he did not have it before him, said interest obligations should be honored, and stressed efficient fiscal programming and respect for contracts. Hontiveros argued that borrowing should generate returns exceeding later interest and amortization costs. Hontiveros questioned how a budget could remain people-centered if combined health, agriculture and social-service budgets were smaller than interest payments. She called for better spending quality and a holistic approach linking health, education, social protection and human capital, while officials discussed safeguards, procurement transparency and addressing corruption risks. The exchange connected recovery spending to agriculture, including buffer stocks and agricultural productivity. Hontiveros emphasized that budget decisions should direct borrowed funds toward productive, high-impact uses and asked agencies to correct weaknesses that prevent infrastructure and other spending from producing economic capacity.

Food security and climate resilience: Hontiveros asked how much the 2027 budget would allocate across agencies to prepare for a potentially severe El Niño, especially for farmers. DBM said preparation had already begun through the uplift framework, augmentation for fertilizer and fuel inputs, adjusted planting calendars, irrigation support including possible solar irrigation, and standby NDRIM resources. Hontiveros requested a written agency breakdown and asked about current rice buffer stocks and water-facility repairs; DBM said NFA and DPWH were using existing resources and agreed to submit information. Balisacan said food prices in the Philippines were almost twice those in Vietnam, Thailand, or Indonesia, and linked food security to declining and underused agricultural land. He said agricultural land had fallen from 9.67 million hectares in 2002 to 6.31 million in 2022; of about 3.13 million hectares of irrigable area, only 1.84 million were irrigated. He said rice production had grown only 0.9% annually over the previous decade while population grew 1.23%, helping explain heavy rice imports. He identified conversion of productive irrigated farmland and insufficient productivity investment as root problems, and appealed for Congress to pass a national land-use code that had been pending for 25 years.

Industrial policy and proactive planning: Hontiveros raised the need to attract foreign direct investment amid global trade uncertainty and asked how the budget would address domestic constraints including electricity, logistics and ports. DEPDev Secretary Arsenio Balisacan cited proposed EPIRA amendments, a more effective ERC, ERC-PCC coordination against market-power abuse, energy investment, and easier permitting; he said the executive side was focused on a more efficient bureaucracy. Finance Secretary Frederick Go said the main answer lay in policy reform rather than budget items, especially ease and predictability of doing business, and cited the CREATE MORE Act, PPP Code, Accelerated Right-of-Way Law, Mining Fiscal Regime, and Land Lease Act. Go said PPA did not receive a subsidy because it had its own revenue for port projects; for container congestion, he described a proposed joint administrative order to clarify responsibility between maritime and Customs jurisdictions after unloading. Hontiveros argued that Tatak Pinoy Act should develop into a clear, fully articulated industrial policy with funding and focus in the 2027 NEP, so the country could respond proactively to crises rather than absorb shocks more severely than regional peers. Hontiveros said she would leave two additional topics for written submission to the agencies because she needed to leave. She framed the exchange as a request for a 2027 budget with a proactive plan, clearer industrial direction and resilience to future shocks.

Rice prices, supply, and food inflation: Sen. Francis Pangilinan said food, especially rice, is a driver of nationwide inflation and asked whether it required immediate intervention. Governor Eli M. Remolona Jr. said food accounts for 37% of the index and 50% of the basket for the lower 30% of households, and called rice a salient price because changes affect expectations. Pangilinan cited his 2014-15 experience, saying that increased rice supply to the National Capital Region coincided with rice inflation falling from 15% to 0.8% within a year; this was his historical example, not independently verified in the exchange. Remolona said price caps were not very helpful and pointed instead to raising agricultural productivity and rice output. Pangilinan argued that low productivity and supply, together with the Philippines as a net agricultural importer, drive food inflation. He compared agricultural exports of more than US billion in Thailand and Indonesia with about US billion for the Philippines; this was his stated comparison. Remolona agreed that the right supply would bring down nationwide inflation.

Inflation assumption and adverse scenarios: Sen. Francis Pangilinan asked about the earlier 2.2% to 4% medium-term inflation range he cited, arguing that the monetary-policy and government interventions behind it had not worked before the assumption was raised. Governor Eli M. Remolona Jr. said the range reflected what the economic advisers had been saying, but the assumption was adjusted this year to 4% to 5%. He said changed conditions, including the source-described April war and higher oil prices, required assumptions that reflected the new situation. Pangilinan asked what measures and countermeasures were available if shocks such as drought or disrupted imports occurred, and whether government had a Plan B. Remolona said BSP had changed how it analyzes inflation: it now uses scenarios to estimate inflation under different events, and its scenario analysis had become more serious. He did not offer a specific government countermeasure in this exchange.

Rice imports and deferred explanation: Sen. Francis Pangilinan asked why rice prices had barely declined, and had instead risen, despite the rice tarification measure and a rise in imports that he put from about 2 million metric tons a year, through 2.5–3 million, to about 5 million. He asked the BSP's monetary and economic officials how they explained the result, while acknowledging Ukraine as another factor. The figures and comparison were Pangilinan's statements in the exchange. Governor Eli M. Remolona Jr. said the tarification measures had worked for a while, but that something else intervened and was going on. He said Secretary R.C. Balisacan was the best person to explain it. Pangilinan said he would raise the question with Balisacan later; the intervening factor was not identified in this unit.

Government-bank scrutiny and reporting threshold: Sen. Francis Kiko Pangilinan proposed separate reporting and stricter scrutiny for government depository-bank accounts. Governor Eli M. Remolona Jr. said the Land Bank case had involved a presumption that government-originated funds were regular, and that the institution now understood that assumption could not stand. Pangilinan asked whether the PHP500,000 cash-transaction reporting threshold had changed, noting that the statutory amount dated to 2001. Remolona and BSP General Counsel Roberto L. Figueroa said the circular had been amended to raise the threshold to PHP1 million.

GDP slowdown, investment, and recovery outlook: Sen. Camille Villar asked whether a downward GDP trend would continue, referring to 2.3% in the last quarter and 2.8% in the first quarter. Governor Eli M. Remolona Jr. confirmed GDP growth had fallen to 2.3% in the second quarter of 2026 and said BSP expected recovery by the next quarter, especially in the fourth quarter. Villar's 2.8% first-quarter figure was not separately confirmed in this exchange. Asked about the reasons for the drop and factors for improvement, Remolona identified a collapse in government investment as the main factor. He described it as part of an understandable effort to discipline government spending, said government was making strenuous efforts to accelerate investments, and expected the economy to be back on track by the fourth quarter. No program, amount, or implementation schedule was specified.

AMLC corruption safeguards and follow-up: Senate President Win Gatchalian framed corruption as a domestic economic problem and asked what BSP and AMLC had changed to prevent large transactions from going undetected. He cited, as part of his question, a Land Bank cash-withdrawal case and a ₱162 million AMLC allocation. Governor Eli M. Remolona Jr. said AMLC receives covered transaction reports over ₱500,000 and large volumes of suspicious transaction reports; it was obtaining AI to analyze reports and identify red flags. He said bank secrecy prevents direct inspection of accounts, while freeze petitions need a predicate crime and probable cause before the Court of Appeals. Gatchalian added that CTRs, predicate crimes, and red flags allow AMLC to act, and said Ombudsman authorization could permit account access under the SAL-N waiver he described; Remolona agreed that such authorization was possible. Gatchalian requested a report on AMLC improvements and a detailed accounting of the PHP162 million technology-related allocation, saying the committee would return to the matter at the AMLC budget hearing.

LEDAC sequencing and final list: Senate President Sherwin Gatchalian said that, by his count, the LEDAC list had 53 bills, including the CADENA Act and one of his own. He said the bills were divided into two phases, with the first hoped to be approved before June of the next year and the second in the following months. He said DEPDev, as the secretariat, was expected to submit the cleaned and reprioritized official list; he cited the Independent Infrastructure Commission and biofuels as examples removed from it. DEPDev Secretary Arsenio M. Balisacan said it would submit the final list once the Office of the President had cleared the meeting minutes.

Optical Media Board wind-down and residual funding: Senate President Sherwin Gatchalian said the Senate had placed a special provision to wind down the Optical Media Board because its mandate was considered obsolete. DBM said the OMB was a priority agency for executive-branch optimization and that documentary requirements for the final winding down were in their final stage. Gatchalian asked whether the OMB still had a budget because it remained in the NEP. DBM said a small portion remained for regular and recurring expenses. Gatchalian said Villanueva would ensure implementation of the special provision, and DBM confirmed there were no confidential funds for the Optical Media Board.

Growth outlook and infrastructure releases: Senate President Win Gatchalian asked whether the lower end of the growth target remained feasible after 2.6% first-half growth. DEPDev Secretary Arsenio Balisacan said 4.4% remained feasible, saying that moving public-construction spending from a 32% contraction to flat could add one percentage point to GDP growth, alongside better private-sector sentiment and easing inflation. Gatchalian then pressed DBM on physical construction and releases. Acting DBM Secretary Kim Robert C. De Leon said it had released nearly DPWH's full annual allocation, about PHP60 billion of PHP85 billion for school buildings, and was processing farm-to-market-road and health-facility funds; DPWH allotments had been released in May, though about 20% to 30% of projects had not yet been awarded by June. He said DOTR had received additional allotment for foreign-assisted projects and submitted to Gatchalian's request for detailed agency-by-agency infrastructure-release data.

Revenue collection, debt path, and fiscal consolidation: Gatchalian said tax collections had missed targets for three years and asked why BIR and BOC performance fell short despite the need to reduce borrowing. BOC Assistant Commissioner Vincent Philip Maronilla attributed recent misses partly to tariff reductions on major imports, but said BOC was about PHP11 billion above its adjusted target through July 2026; he cited exchange-rate effects, revenue efficiencies, price-reference subscriptions to challenge undervaluation, and trade-facilitation work. BIR Deputy Commissioner Marissa Cabreros said BIR was slightly above target through July, reported enforcement against fake transactions and other referred cases, and described taxpayer registration, education, and closure enforcement. Finance Secretary Frederick Go said assumptions used to set targets can be optimistic and overtaken by external shocks; he said collection targets adjust every six months. DOF Undersecretary Karlo Adriano said the attrition law can apply below 92.5% of target, subject to justification, while DEPDev said rules and a formula had been revised for overly optimistic targets and shocks. Gatchalian requested a report on attrition-law penalties and stressed effective, honest collection rather than simply shifting personnel. Gatchalian said the actual debt-to-GDP path was diverging from the Medium-Term Fiscal Framework and asked why. Go agreed, contrasting the MTFF's 3.5% fiscal-deficit goal for 2027 with the submitted 5.4% plan. He said collections at 16% of GDP compared favorably with regional peers, while expenditure at 22% of GDP exceeded their 19% to 20%. Gatchalian urged DBM to cut redundant MOOE and cited PHP22 billion in IT-digitalization spending removed in a prior budget as an example; De Leon said DBM was reviewing line items and projected 2028 expenditure at the 2027 TEP level while automatic appropriations increased. Gatchalian also said debt service was projected at 15% of the budget in 2027 and calculated per-capita debt at PHP165,000 in 2026. Chair Ejercito requested projected interest-payment-to-revenue data for the medium term.

Operating costs, LGU devolution, and LGSF outcomes: Gatchalian warned that current operating expenses had exceeded revenue in 2025 and 2026, which he characterized as borrowing for salaries and maintenance rather than capital investment. De Leon said DBM was reviewing agency current-operating and MOOE requirements without affecting major programs, while personal-services costs were shaped by plantilla positions and scheduled pay increases. He added that national tax allotments to LGUs were included in current operating expense: he put the NTA at PHP1.3 trillion, said it had risen 11% while the budget rose 6%, and said DBM was studying full devolution of functions. Gatchalian proposed examples such as city management of fire services; De Leon said DBM would include the suggestion in its review and said the transition to full devolution for cities should start after 2027, then for municipalities and provinces after 2028. Gatchalian supported stronger LGUs but asked whether the Local Government Support Fund had demonstrated results for countryside infrastructure and development after rising from roughly PHP10 billion to PHP15 billion historically to PHP57 billion and then PHP58 billion. De Leon said DBM could provide release and implementation status but that measuring development impact would need added assessment; qualifying projects must align with the concerned LGU's development program. He said the fund supported nationwide rice distribution and infrastructure, that project lists were available through DBM's COMPASS site, and that DBM and DILG were integrating implementation monitoring from SubayBayan. Gatchalian asked for a study of whether LGSF had stimulated local growth, advanced LGU goals, reduced poverty, or improved education; De Leon said DBM would comply.

Confidential and intelligence-fund screening: Gatchalian raised confidential and intelligence funds in light of concerns about possible abuse, said his figures totaled PHP10.7 billion, and argued that such funds should be limited to enforcement or other agencies with legitimate surveillance or intelligence-gathering mandates. De Leon said DBM assessed agency mandates during budget preparation and placed needs in regular line items where those could cover them; he said the 2027 NEP level was below the GAA level. Gatchalian said DBM had performed an initial filter and asked that the Senate scrutinize agency budgets further.

Oil sources and proposed exploration: Sen. Robinhood C. Padilla asked whether the Philippines should pursue the oil joint-exploration proposal he associated with China and whether development of the West Philippine Sea oil and gas reserves he described would help the economy. Governor Eli M. Remolona Jr. said the country depended mostly on oil passing through the Strait of Hormuz and needed to diversify its oil sources through strategic means. Asked whether the proposed development would help, he agreed but qualified that it would do so only if it could actually be carried out.

Pax Silica and AI capacity: Padilla asked whether Pax Silica, which he described as an AI hub, could address the country's AI gap. Remolona said it could help if it proceeds. He said the current semiconductor work was low-bandwidth and unsuitable for AI, while high bandwidth was needed.

AMLC freezes, cleared accounts, and infrastructure spending: Ejercito asks how AMLC freeze orders affect legitimate accounts and cleared businesses while investigations proceed, including the six-month freeze period. Kabanlit explains that accounts without links to the flood-control controversy are excluded from civil-forfeiture cases. Ejercito says cleared businesses still face banking difficulties that impede normal operations and infrastructure spending, and asks AMLC for a mechanism. Kabanlit says AMLC will discuss the issue with banks.

Exchange-rate exposure and foreign-assisted projects: Ejercito asks about the fiscal impact if the peso averages 64 per dollar rather than the assumed 60–62. Remolona refers the question to DBM. Acting Secretary De Leon explains that higher foreign-exchange rates increase the peso value of foreign-denominated project payments, including interest and programmed disbursements. No project-level amount is calculated in the exchange.

Fiscal discipline and infrastructure investment: Chair Ejercito asked how fiscal discipline could be maintained without sacrificing underinvestment in infrastructure. De Leon said the 2027 capital-outlay increase exceeded those for MOOE and personal services, and that e-governance, government optimization, and full devolution could create room for high-impact projects. Ejercito then asked about suspended or cancelled major rail projects, including the Mindanao Railway System and South Long Haul, and argued that Mindanao development needed follow-through after peace measures. Balisacan agreed that connectivity should be a high priority for sustained, inclusive, and resilient growth, but said fiscal constraints required using PPP potential in urban areas and directing public resources to rural or less commercially attractive connectivity, including Mindanao.

Revenue, borrowing, and fiscal sustainability: Chair Ejercito asked how much projected revenue growth reflected inflation rather than a genuine improvement in revenue capacity, noting the DBCC's 4% to 5% 2027 inflation forecast. DOF Secretary Frederick D. Go said tax revenue was projected to rise from PHP4.4 trillion to PHP4.85 trillion, or about 9.2% to 9.3%, and said there was some buoyancy after accounting for GDP and inflation assumptions. Ejercito also questioned the PHP101.5-billion privatization target, asking how the government would assure fair value rather than use asset sales for short-term fiscal needs. Go said the projection was supported by roughly PHP37 billion already in hand from the CBK hydroelectric-facility privatization. On the Atrium sale, he clarified that the PHP1-billion transaction covered 24 condominium units, not the whole building. Ejercito asked whether the 2027 projected PHP3.304-trillion gross borrowing requirement was sustainable, given PHP1.695 trillion for the deficit and PHP1.590 trillion for maturing debt. Go confirmed the figures and said sustaining a 5.5% fiscal deficit would be unsustainable. He said the plan was to lower the deficit from about 5.45% to about 3.5% by 2030, warning that interest payments would take an increasing share of the national budget if the fiscal-deficit-reduction path was not followed. Go also confirmed that the roughly 21% increase in gross borrowing was driven by maturing debt, while the deficit would rise from PHP1.6 trillion to PHP1.7 trillion. Drawing on questions submitted by civil-society organizations, Ejercito cited an Asian Development Outlook inflation figure of 5.9% for the Philippines against a 3.8% ASEAN average, and said IMF data showed a wider fiscal deficit than selected neighbors despite shared oil, El Niño and global-interest-rate shocks. Go replied that many regional neighbors had domestic fuel sources, while the Philippines was outspending its regional peers, which he said explained the larger fiscal deficit. Ejercito then cited projected declines in the revenue-to-GDP ratio from 15.9% in 2025 to 15.7% in 2027 and 15.4% in 2028, with tax effort at 14.6%, and asked whether debt service, infrastructure and universal health care could be sustained. Go said debt was manageable if the fiscal-deficit-reduction path was followed, but warned that maintaining a deficit of 5.5% or more would direct more revenue or expenditure to debt service.

Health funding, PhilHealth obligations and medical inflation: Ejercito questioned reduced health funding while health-care costs were rising. He said the DOH budget was projected to fall 11.4%, the PhilHealth subsidy 42.6% to PHP74.4 billion, and combined national-government health funding 20.8%, from PHP427.6 billion to PHP338.8 billion. Acting DBM Secretary Kim Robert C. De Leon cited continuing appropriations, including unutilized Health Facilities Enhancement Program funds and hospital MOOE, and said the PhilHealth reduction mainly reflected the one-time PHP60-billion return. He said DBM would meet Secretary Edwin Mercado and President Beverly Ho on the PHP19.8-billion PhilHealth-earmark variance, but that a transfer would be a zero-sum choice requiring a reduction elsewhere. Ejercito said hospitals and doctors had raised slow PhilHealth payments and rising professional fees and costs, making smaller LGU assistance go less far; he said reducing health funding at that time might be unwise. Asked whether reserves could sustain benefits, De Leon said DBM and PhilHealth were working on a viable solution, including previously issued but unfunded allotments, while maintaining the deficit target and continuing approved benefits.

Forex exposure, debt mix, and government response: Sen. Imee Marcos asked whether the PHP60–62 per-dollar assumption underlies the 2027 budget and how each peso of depreciation affects spending, particularly foreign-currency debt and foreign-assisted projects. Acting DBM Secretary Kim Robert De Leon confirmed the assumption and said DBM could submit the foreign-assisted projects exposed to forex fluctuations. Finance Secretary Frederick Go gave a rough estimate of PHP19 trillion in total debt, with about one-third, or roughly PHP6 trillion, in foreign exchange; he described a 1/62 calculation as about 1.6%, without giving a detailed per-peso expenditure estimate. Marcos asked whether the government hedges foreign-currency debt or otherwise prepares for further peso depreciation. Go said the government does not hedge that debt; instead, it is increasing peso exposure and reducing foreign-exchange exposure. He contrasted a past 60% peso and 40% foreign-exchange borrowing mix with a goal of borrowing 75–80% in pesos and only 20–25% in foreign exchange.

Reserve decline and requested data: Marcos asked about the reported decline in foreign reserves and its cause. BSP Deputy Governor Zeno Ronald Abenoja said reserves had fallen from USD110.8 billion at end-2025 to USD103.3 billion at end-July 2026. He cited government obligations that can draw on reserves and valuation changes in reserve components as factors, while saying some obligations may also be sourced from the market. Asked for a fuller accounting, he said BSP would provide data and an explanation.

BSP gold-sales accounting and public disclosure: Senator Imee Marcos asked BSP to submit an accounting of gold sold because of high prices, noting that the price had since doubled. She questioned why BSP would sell again after the gold share of the entire portfolio was described as previously 8% to 10% and now 15%, and cited the high holding and storage charges at the Bank of England and elsewhere. She also asked how much was raised and remitted to the National Treasury. Marcos asked that the accounting be explained to the public as well as submitted to the chair and committee. Chair Ejercito directed BSP through Deputy Governor Abenoja to submit the information on the controversial gold sale and other pertinent documents. Abenoja replied that BSP would prepare them.

OMB CFO position: Senator Imee Marcos put on record that she would defend the OMB CFO budget even though she personally believed the office should be abolished, describing that as her problem and leaving the issue on the record.

Growth assumptions, spending risks, and budget adjustment: Marcos challenged the 2027 NEP's 5% to 6% real-GDP growth assumption and the projected increases in tax and total revenue against the reported slowdown. DEPDev Secretary Arsenio M. Balisacan said the slowdown reflected a sharp contraction in public investment, which he said could have added one percentage point to GDP had public construction remained flat; he pointed to efforts to address spending bottlenecks, restore trust and improve the business climate, while calling 5% to 6% the economy's potential growth. DOF Secretary Frederick D. Go explained that tax collections use nominal GDP: the assumed 5% to 6% real growth plus 4% to 5% inflation implied at least 9% nominal growth. He also cited goods-export growth of 15% last year and 13% in the first six months of the year. Balisacan said projections are reviewed whenever quarterly GDP data arrive and that the DBCC adjusts assumptions when needed to avoid imbalances. Marcos asked what the 2027 budget would do if oil prices exceeded the assumed Dubai-crude range. Acting DBM Secretary Kim Robert C. De Leon said DOE had begun oil stockpiling and was exploring added storage, but that the GAA ceiling stays fixed when oil or foreign-exchange costs rise, requiring agencies to reduce quantities such as fuel use. Marcos also questioned the increase in total expenditure and the reduction in MOOE. De Leon attributed capital-outlay growth to foreign-assisted projects, including the North-South Commuter Railway, DPWH infrastructure and an AFP modernization increase from PHP40 billion to PHP50 billion. He said MOOE was being rationalized because agencies still held prior balances; he cited the budget's two-year validity as a contributor to delayed implementation, backed one-year MOOE utilization in the Philippine Budgeting Code, and agreed to submit the departmental MOOE-balance information Marcos requested.

Tax reforms and revenue replacement: Marcos returned to the estimated PHP60 billion revenue loss from the proposed PHP350,000 personal-income-tax exemption and asked how it would be offset. Go said DOF had submitted the ProGRESS Bill, which contained two revenue-eroding reforms: the personal-income-tax exemption and removal of the minimum corporate income tax for micro and small businesses; he described tax amnesty as revenue-enhancing and said the revenue-generating menu included health taxes. He said the department was considering vapor products and nicotine pouches rather than a tobacco excise adjustment. On vehicle taxes, Go said no tax on farm vehicles was proposed, and Senate President Sherwin Gatchalian said ProGRESS Bill contained only a luxury tax on vehicles above PHP8 million. Marcos asked DOF to submit the projected revenue increases and whether they would fill the exemption shortfall.

Cash assistance and acting-official capacity: Marcos asked for the official amount assigned to cash assistance, subsidies and social protection, citing an approximate PHP500 billion from her own count and repeating former Finance Secretary Ben Diokno's characterization of an 'all-ayuda' budget. De Leon said the office was retrieving the figure and noted that AICS, MAIFIP and TUPAD provisions had reverted to NEP levels; he said targeted selection under the institutionalized 4Ps program was intended to avoid indiscriminate assistance. Marcos then argued that the number of acting Cabinet officials, including an acting DBM secretary, could constrain discretionary, personnel and emergency action during a worldwide crisis. She listed officials as examples and said the arrangement risked limiting innovative measures; no official response follows in this exchange.

Blockchain budget bill and LEDAC priorities: Sen. Bam Aquino asks why the blockchain budget bill, which he says has passed the Senate and was a priority measure in 2025, is absent from the shortened 2026 LEDAC priority list. He argues that putting the budget on blockchain would improve transparency and reduce opportunities for corruption. Balisacan says the measure remains on the longer LEDAC list and that the shorter list was limited to measures needing emphasis over the next 12 months; after Aquino presses that the bill is near completion, Balisacan agrees to bring the concern to LEDAC leadership.

Mine bill and long-term infrastructure planning: Ejercito asks whether the mine bill, Senate Bill No. 2, belongs in the Promoting Growth, Revenue, and Equity Towards Socioeconomic Sustainability Bill and relates to the proposed Master Plan for Infrastructure and National Development. Balisacan says it is on the longer LEDAC list committed for passage in the Congress and says a specific law could institutionalize a long-term infrastructure master plan.

Education funding, nutrition, and classroom delivery: Sen. Bam Aquino asked DBM to align future education budgets with EDCOM's 10-year plan, whose output Acting DBM Secretary Kim Robert C. De Leon said DBM knew. Aquino said his calculation placed 2026 education spending at 3.78% of GDP while DBM's calculation was 3.99%, and pressed for a 4% level and an explanation of the difference. He also said an enhanced national nutrition program would need funding for roughly 3.5 million to 4 million learners and argued that education allocations had fallen by PHP60 billion. De Leon said nutrition funding had been retained: milk provisions were placed with the Philippine Carabao Center and National Dairy Authority, while the main feeding program remained with DepEd; he said DBM would provide the 3.99% breakdown. Aquino asked DBM to release classroom funding once MOAs and local-government readiness were in place, saying DepEd had PHP28 billion against a PHP67-billion classroom budget. De Leon later described PHP85 billion appropriated for basic-education facilities and said about PHP60.5 billion had been released to DepEd. When Aquino distinguished release from utilization, De Leon said released funds could be downloaded to LGUs with MOAs, implemented in-house by DepEd, or procured through DPWH. He said DBM would work with Aquino on sufficient added classrooms and that a planned PPP classroom project was expected to be awarded and start in 2027, while acknowledging it could not close the whole gap. Aquino cited a 160,000-classroom shortage and argued for a 10-year funding plan.

Income-tax threshold and fiscal trade-offs: Aquino asked about the revenue effect of the SONA's proposed income-tax exemption for annual gross revenue of PHP350,000 or below, and compared it with PHP400,000 and PHP480,000 thresholds. DOF Secretary Frederick D. Go gave rough first-year effects of PHP60 billion at PHP350,000, PHP133 billion at PHP400,000, and PHP143 billion at PHP480,000. Go added that the PHP400,000 calculation incorporated a PHP150,000 bonus exemption, so it was not a threshold-only comparison. He said he was neutral on tax erosion if a revenue-generating replacement could be shown.

Residential electricity VAT calculation: Aquino asked DOF to calculate the fiscal effect of removing VAT on residential electricity, which he contrasted with a system-loss proposal and said would apply to households rather than businesses or factories. He characterized VAT as 12% and system loss as roughly 5% to 6%. Go said DOF would calculate the proposal's effect; no result was given in the exchange.

Pax Silica and assistance for affected families: Aquino asked whether the budget made room for assistance to families affected by the planned Pax Silica advanced-manufacturing project, describing a 1,600-hectare site and saying 70 to 200 families could be affected. De Leon said no 2027 budget provision across agencies was identified for implementing Pax Silica. He said compensation might be a matter for corporate funds rather than a BCDA subsidy, but he could not say that for certain; he confirmed it was not in the NEP's BCDA subsidy. Aquino urged support for advanced manufacturing while protecting farmers and Indigenous peoples.

CADENA Act and proactive disclosure: Aquino asked that the CADENA Act be reconsidered as a legislative priority. He described it as requiring agencies to proactively publish budget-to-contractor information, including unit prices, rather than requiring citizens to request data under freedom-of-information rules; he said agencies could face liability for failing to disclose. He also said Secretary De Leon had earlier advised on a page listing documents to be released. Aquino asked the Senate committee to elevate the proposal.

Futures planning, energy exploration, and institutional readiness: Cayetano urged the economic team and BSP to consider futures-thinking offices that plan for long-term risks and future-proof the Philippines. She cited such offices in DOH, DepEd and DOST and asked for planning across seven generations; BSP Deputy Governor Abenoja said the suggestion would be seriously considered. She linked futures planning to joint gas exploration and recalled that roughly 150 exploratory efforts in the 1970s preceded the discovery of Malampaya. She said Malampaya gas now exists but is negligible, and argued that long-term planning should prepare the country decades ahead.

Agricultural output, smuggling and inflation: Cayetano asked why agricultural output was not rising and raised agricultural smuggling and the alleged agriculture mafia as possible causes. She connected food inflation to overall inflation, cited 3.7 billion pesos in Customs seizures and an online 2014 figure of 64 billion pesos in foregone revenue, and requested more current figures.

Accessible public facilities and human capital: Cayetano asked whether parks, boulevards and sports facilities could reduce consumption culture. Balisacan qualified his answer: the effect depends on context and location, especially accessibility to the population. Cayetano gave Dipolog's 50-meter facility and swimming example, then tied agricultural education and the Presidential Merit Scholarships to the need to address smuggling, health, education and agriculture through a holistic approach.

PhilHealth financing and zero-balance billing: Sen. Pia Cayetano revisited PhilHealth funding she said the Senate had recovered, including PHP16 billion in an earlier budget. She cited her own historical tally of PHP113.44 billion in shortfalls from sin-tax earmarks, PHP77.46 billion in unappropriated or unreleased PCSO and PAGCOR funds, and PHP101.43 billion in unreleased appropriations, for PHP292.33 billion in all. For 2027, she asked why the budget showed PHP55.42 billion for PhilHealth when the earmarked collections appeared higher. Finance Secretary Frederick Go said 2025 excise-tax collections were PHP148.7 billion, including PHP39.3 billion from sweetened beverages, and put the PhilHealth earmark at PHP75.2 billion. Acting DBM Secretary Kim Robert C. De Leon confirmed a PHP19.8-billion variance, said DOH's earmark was met or exceeded, and said DBM would work with DOH and PhilHealth on a financing solution consistent with PhilHealth's single-payer role. He later said the 2026 JAA amount, including PHP60 billion to be returned, had been released to PhilHealth. Cayetano corrected herself that the PHP19-billion PAGCOR special provision concerned zero-balance billing (ZBB), not MAIFIP. She welcomed the reported expansion of ZBB to more than 300 LGUs, recalling a PHP1-billion LGU pilot in the 2026 budget, but said she did not know the amount for those LGUs. She said the PHP19-billion provision also covered malnutrition, dialysis, and other needs, and objected to the lump-sum structure because it did not show how much would reach ZBB. She asked how the money would be divided among more than 300 of the country's 1,642 LGUs; no allocation breakdown was given in this exchange.

Higher-education staffing and classroom capacity: Cayetano asked whether a reported 34% personal-services budget increase, much of it for health and education, would reach higher-education teachers. She said CHED and state-university funding had fallen and described instructors' high teaching loads. De Leon said DBM had a lump-sum provision for additional teaching positions in state universities and colleges and used a target of one instructor per 25 students when acting on requests. Cayetano questioned whether that ratio was achieved, citing a student-athlete's online classes because no classroom had been assigned and a semester in which students had not met their teacher. De Leon said DBM would check what was happening on the ground.

Health-workforce shortages and overseas recruitment: Cayetano said the country was sending conflicting signals on health human resources: it faced shortages while celebrating overseas recruitment. She argued that bilateral arrangements could support domestic health infrastructure and further training, citing an agreement with Denmark as an example. She listed shortages of 67,345 physicians, 106,541 nurses, 6,651 pharmacists, 5,500 radiologic technologists, and 884 occupational therapists, and asked for a current whole-of-government response. De Leon said he would relay the issue to DOLE, DMW, and DFA; he acknowledged continuing need and unfilled posts in government hospitals, and said hospital upgrades could require additional medical and allied-health positions.

SDG health and cities catch-up plans: Cayetano said 10 Sustainable Development Goal targets showed progress but two had regressed, with little prospect of reaching their 2030 goals, and asked DEPDev to take a whole-of-government lead. DEPDev Secretary Arsenio Balisacan confirmed regression on SDG 3 (health) and SDG 11 (cities and communities). Undersecretary Rosemarie Edillon identified worsening health indicators including accidental poisoning and traffic accidents, said regional SDG bodies had been asked for a new catch-up plan after review of an earlier one, and said DEPDev had convened SDG-related agencies to discuss 2030 targets and their programs. Cayetano also urged planning for floods, housing, calamities, and food access as cities grow.

Government Optimization Program update: Sen. Joel Villanueva asked for an update on the Government Optimization Act and Program after the discussion of non-performing GOCCs. He said the program covers executive agencies, including GOCCs, and asked for a report focused on the non-performing entities, while noting the stated exception for eco-zones. At Chair Ejercito's request, Acting DBM Secretary Kim Robert C. De Leon said DBM had identified 15 GOCCs, with some included in the list to be covered by the program. He said agencies' Government Optimization Plans were due on August 29 and that DBM expected plans from agencies, GOCCs, and national government agencies after that date explaining how they would optimize their operations.

Debt sustainability and primary balance: Villanueva interjected that national debt was PHP19.07 trillion, or about 66% of GDP as of June 2026, and asked what primary balance DBCC considered necessary to put debt on a firmly declining path and on what timeline. Treasurer Sharon Almanza attributed a debt-sustainability-analysis computation of about 0.9% of GDP for the debt-stabilizing primary balance.

Primary balance and deficit path: Villanueva placed on record that the primary balance needed for the declining debt-to-GDP path was 0.9%, alongside a 5.45% 2026 deficit and a 3% target for 2028, and asked when the declining path would be achieved.

Quality jobs, wage setting, and employment targets: Villanueva invoked the constitutional living-wage principle and raised the pending NCR wage matter. He said the court had intervened despite Labor Code language he described as barring injunctions and temporary restraining orders, and cited an NCR minimum wage of PHP755 and a newly issued PHP840 figure. He asked whether inflation in electricity, transport, rent, and food would erode the increase. Balisacan said minimum wages should be decided by regional tripartite bodies and that NCR minimum-wage increases had substantially outpaced inflation over the prior two or three years. Balisacan opposed a single nationwide legislated minimum wage, favoring worker employability, job quality, and investment. Villanueva connected the proposed budget to the Trabaho Para sa Bayan Plan and pressed for its desired outcomes and targets to be reflected in budget decisions. He emphasized quality and quantity of jobs and asked officials to account for progress and remaining employment needs.

Job-order personnel and vacant plantilla positions: Villanueva raised the scale of job-order and contract-of-service personnel and 164,000 vacant permanent positions, asking for a report distinguishing positions that are unfunded from positions that no longer match agency functions and skills. De Leon said the cited 1 million figure covered the Philippines including LGUs, while national-government agencies and state universities and colleges had reduced job-order and contract-of-service personnel by 13%; he described scrap-and-build plantilla adjustments, conversion and creation of positions, preference for long-serving workers in optimization plans, and an August 29 deadline.

Duty Free Philippines, subsidy classification, and operating efficiency: Cayetano questioned why Duty Free Philippines was at the top of the list, citing the earlier discussion that the Philippines is a consumer country and asking about subsidizing it. Villanueva said that, on a visit about two weeks earlier to a site near the airport, no one was there and he understood dollar rates to be the reason. Cayetano contrasted this with duty-free shops she had seen outside airport perimeters in other Asian countries. At Chair Ejercito's request to validate the concern, Acting DBM Secretary Kim Robert C. De Leon said a zero in the subsidies column means no GAA subsidy is provided. He said the table may present GOCCs in two classifications: entities seeking and receiving GAA subsidies, and non-seeking entities that are nevertheless incurring net losses. Villanueva said employees at the Duty Free site he visited appeared idle because there were no shoppers, and said the budget hearings should make government offices more efficient. Ejercito suggested one possible reason for the lack of customers: the same items are available elsewhere, including malls, and at lower prices.

Growth, inflation, tax relief, and productive investment: Villar asked about the debt-to-GDP level that could threaten investment-grade status. DOF said the World Bank general-government threshold was 70%, with the Philippines at about 58.6% and roughly 11-plus percentage points of space. Go projected a decline to 56.1% by 2030, while Balisacan gave real GDP growth targets of 3.5–4.5% for the current year and 5–6% for the following year. Balisacan said growth had weakened broadly except for net exports, with personal consumption slowing to just above 2% in the last quarter. He attributed weaker consumption to inflation and weakened consumer sentiment, noting inflation at 6.2% in July, and said governance concerns affected investment sentiment. Public construction had contracted by more than 30% in two successive quarters. Villar asked whether raising the income-tax exemption ceiling could prime consumption by adding income for lower and middle earners. He referred to raising the ceiling from PHP300,000 to PHP360,000; the exchange also considered alternative thresholds and their estimated revenue effects. The officials' figures and assumptions remained subject to the detailed fiscal calculations discussed in the hearing. Villar raised energy and infrastructure questions in the context of growth, investment and the budget, including the status of government participation in energy assets and the need for productive infrastructure. The exchange treated these as policy and fiscal-space questions rather than announcing a final project decision.

AFASA anti-scam enforcement and victim recovery: Villar asked whether the AFASA law had improved anti-scamming enforcement. BSP General Counsel Roberto Figueroa said it had helped substantially, citing cases filed with law-enforcement partners, 527 AFASA-related cases reported by the PNP ACG in 2020 with 447 solved or cleared, and information-sharing agreements. He said AFASA enabled CAPO to access scammer accounts without a court order and increased the chance of recovering victims' funds. Hontiveros added that seized assets from former POGO operators could support rehabilitation of victim-survivors.

Written follow-ups and briefing suspension: Chair Ejercito said the rest of his questions would be sent to the concerned agencies for appropriate responses. He also placed on record that Minority Leader Senator Alan Cayetano had sent questions for the DBCC, which would be furnished to and endorsed to the agencies for responses. The chair thanked the Senate President, economic managers, resource persons and colleagues, said there were no more questions or concerns, and stated that the resource persons would not be requested to return the next day. He then suspended the briefing and directed participants to the proper agency budget hearings.