PRESIDENT Ferdinand R. Marcos Jr. and the Cabinet today approved the FY 2026 National Expenditure Program (NEP) after being submitted by Secretary Amenah “Mina” F. Pangandaman of the Department of Budget and Management (DBM) this morning in Malacañang.
Secretary Pangandaman presented the proposed National Budget, which amounts to Php 6.793 trillion, equivalent to 22.0 percent of GDP and higher by 7.4 percent from the FY 2025 budget of Php 6.326 trillion.
Anchored on the theme “Agenda for Prosperity: Nurturing Future-Ready Generations to Achieve the Full Potential of the Nation,” the FY 2026 NEP prioritizes the Social Services Sector, especially Education, following the President’s directives.
“The President himself sat down with the different agencies to ensure that all our priorities are aligned towards our common goal of achieving our vision of a Bagong Pilipinas,” Secretary Pangandaman shared. “So we are very grateful to the President for his leadership and active role in the crafting of this budget.”
The NEP is anchored on the Philippine Development Plan (PDP), which has three pillars: (1) Developing and Protecting the Capabilities of Individuals and Families, which encompasses the education, health, social protection, agriculture, and labor sectors; (2) Transforming Production Sectors to Generate More Quality Jobs and Competitive Products, which encompasses agri-business, trade, tourism, Science & Technology, and innovation; and (3) Fostering an enabling environment, which encompasses infrastructure development, ensuring peace and security, enhancing the administration of justice, practicing good governance, improving bureaucratic efficiency, accelerating climate action, and advancing regional development.
The DBM had to trim down requests for budget proposals that reached Php 10.101 trillion due to limited fiscal space and the fiscal consolidation strategy that targets gradually reducing the national government’s deficit from 5.5 percent of GDP in 2025 to 4.3 percent by 2028.
By expense class, the lion’s share of the proposed budget will go to Maintenance and Other Operating Expenses (MOOE) at Php 2.639 trillion to fund the implementation of government programs and projects. This is followed by Personnel Services (PS) expenditures with Php 1.908 trillion, cornering 28.1 percent of the total proposed budget and reflecting a 16.8 percent year-on-year growth. This will fund the salaries and other PS benefits of government workers, including the requirements for creation and filling of positions. Finally, Capital Outlays will be allocated Php 1.296 trillion to fund priority infrastructure projects, while Financial Expenses will be provided Php 950 billion.
National Government Agencies (NGAs) will receive Php 4.305 trillion, or 63.4 percent , while Local Government Units (LGUs) will receive nearly 20 percent at Php 1.350 trillion, excluding locally implemented projects funded through national agencies. Government-Owned or -Controlled Corporations (GOCCs) will be allocated Php 188.3 billion in the form of subsidy or equity support, as well as net lending assistance.
Submissions were considered based on the following criteria: alignment with the PDP 2023-2028; shovel-readiness; absorptive capacity, which ensures that agencies can fully utilize their funds; prioritization of government programs that deliver the highest value and impact, as well as the implementation of sustainable practices in government operations to ensure that our resources are utilized to meet both present and future public needs; and fiscal space to ensure fiscal sustainability.
The NEP will be submitted by the President to Congress within 30 days after the opening of the regular session.
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