What’s in the proposed 2017 national budget?

Aika Rey

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What’s in the proposed 2017 national budget?
Among agencies, the Office of the President, along with the education and public works departments are the top gainers

MANILA, Philippines – As a taxpayer, you may be wondering how the government spends your money. One way of knowing is by paying close attention to the national budget.

The proposed P3.35-trillion ($70.65-billion) national budget for 2017 is 11.6% higher than the 2016 budget and represents 21% of the projected gross domestic product (GDP) for 2017. It is the highest proposed by any administration so far.

Among agencies, the Office of the President and the education and public works departments are the top gainers.

The 2017 budget represents the first financial plan of the new president. The Duterte administration, however, had only about a month to insert programs as budget calls started January 2016 during the term of former president Benigno Aquino III. (READ: Next president limited by Aquino admin budget for 2 years – Briones)

Apart from knowing where taxes go, the national budget reveals whether campaign promises will be sustained.

On the campaign trail, President Rodrigo Duterte promised higher salaries for uniformed personnel, massive infrastructure upgrades, and easing traffic in Metro Manila. (READ: SONA 2016: The Duterte promise tracker)

Dubbed the “Budget for Real Change”, the proposed National Expenditure Program (NEP) for 2017 was submitted mid-August by the Department of Budget and Management to Congress. It signaled the start of months-long deliberations on the programs and projects of government next year.

In this piece, we take a deeper look at the proposed national budget.

What’s in the 2017 national budget? Will promised programs be funded in the coming fiscal year? The spreadsheet below shows the comparison of the proposed budget to this year’s.

Top gainers

Which government agency gained the most in the proposed 2017 national budget?

According to the 2017 Budget of Expenditures and Sources of Financing (BESF), education, infrastructure, and local government sectors gained the most, among others.

In terms of percentage increase, the budget of the President’s offices has the highest increase at 600.35% compared to this year’s budget. The Department of Education’s (DepEd’s) Office of the Secretary received the highest proposed increase in funds at P135.13 billion ($2.85 billion).

With a glaring 600% budget hike, the DBM explained that the Office of the President’s P20.03 billion ($422.4 million) budget for 2017 includes some P15.46 billion ($326.02 million) for the 50th founding anniversary of the Association of Southeast Asian Nations. The Philippines will play host next year.

The budget department announced that sans the hosting expenses, the financial plan for the President’s offices will grow by only P1.71 billion ($27.37 million) from 2016’s P2.86 billion allocation ($60.22 million).

The DBM explained that money will be used primarily for intelligence activities related to the president’s war against drugs, criminals, and corruption. In the NEP, the budget on oversight management on national security concerns is about P2.76 billion ($58.19 million).

Meanwhile, DepEd’s suggested allocation for 2017 is pegged at P566.24 billion ($11.94 billion). It represents a 31.35% jump from this year’s allocation of P431.11 billion ($9.09 billion). Half of it will go to teachers’ salaries and school buildings, as outlined in the NEP.

The table below shows that DepEd is followed by the Department of Public Works and Highways’ Office of the Secretary budget with P61.50 billion ($1.30 billion) and the Internal Revenue Allotment at P58.27 billion ($1.23 billion) in terms of proposed increase in funds:

Top gainers 

2017 (Proposed)

[In billion  pesos]

2016 (Adjusted)

[In billion  pesos]

Increase [In billion  pesos]


DepEd, Office of the Secretary P566.24 P431.11 P135.13 31.35%
DPWH, Office of the Secretary P458.61 P397.11 P61.5 15.49%
ALGU, Internal Revenue Allotment P486.89 P28.62 P58.27 14.59%
BSGC-DOH, Philippine Health Insurance Corporation P50.22 P50.22
Pension and Gratuity Fund P142.29 P109.97 P32.32 29.39%
DILG, Philippine National Police P110.40 P88.64 P21.76 24.55%
DSWD, Office of the Secretary P129.67 P110.56 P19.11 17.29%
President’s Offices P20.03 P2.86 P17.17 600.35%
ALGU, Local Government Support Fund P34.62 P19.07 P15.55 81.49%
Autonomous Region in Muslim Mindanao P41.782 P29.41 P12.37 42.05%

DPWH received a 15.49% increase from this year’s allocation of P397.11 billion ($8.37 billion). The P458.61-billion ($9.67-billion) proposed budget by the public works department will be used primarily for building road networks and flood control systems.

Meanwhile, the Internal Revenue Allotment for local governments received a 13.59% increase at P486.89 billion ($10.28 billion) from 2016’s P428.62-billion ($10.18 billion) allocation.

The treemap below shows the distribution of funds among agencies in the proposed financial plan. Similar to the previous years’ budgets, the education sector got the lion’s share of funds, while the Office of the Vice President got the smallest slice of the pie this year. (To see the 2016 and 2015 budgets, click the other tabs.)

Top losers?

The Department of Health (DOH), National Housing Authority, and the Commission on Elections got the biggest cuts for 2017.

The DOH Office of the Secretary proposed a P92.97-billion ($1.96-billion) budget in 2017, or P31.09 billion ($654.37 million) less than this year’s P124.06-billion ($2.61 billion) allocation.

This is not to say, however, that the budget for the health sector received the biggest cut.

The reason for the decrease in funds is attributed to the transfer of insurance premiums. In the 2016 budget, these are lodged under the National Health Insurance Program of the government. Next year, it will be transferred to the Philippine Health Insurance Corporation, one of the agencies with the biggest increases in funding – by P50.22 billion ($1.06 billion). (See table above)

In sum, the proposed budget for the health sector is at P144.3 billion ($3.04 billion), 15.4% higher than 2016 figures.

The table below shows the top 10 agencies with the highest drop in funds in the proposed 2017 budget:

Top losers

2017 (proposed)

[In billion  pesos]

2016 (adjusted)

[In billion  pesos]


[In billion  pesos]


DOH, Office of the Secretary P92.966 P124.06 P31.09 25.06%
BSGC-OEO, National Housing Authority P12.64 P30.48 P17.84 58.54%
Commission on Elections P3.32 P16.16 P12.83 79.44%
BSGC-DOF, Development Bank of the Philippines

P5.00 P5.00 100%
ALGU, Special Shares of LGUs in the Proceeds of National Taxes P30.97 P35.92 P4.95 13.78%
DA, Office of the Secretary P35.69 P40.63 P4.94 12.16%
DFA, Office of the Secretary P16.63 P20.70 P4.07 19.66%
BSGC-DOF, Land Bank of the Philippines P3.03 P3.03 100%
DOF, Bureau of Internal Revenue P9.38 P11.31 P1.98 17.53%
DILG, Office of the Secretary P11.13 P13.09 P1.97 14.99%

The suggested budget for the National Housing Authority in 2017 is at P12.64 billion ($266.04 million) which is significantly lower than this year’s allocation of P30.48 billion ($641.53 million).

The decrease in funds is partly due to NHA’s decreased share of housing assistance program for Super Typhoon Yolanda victims. In the 2016 budget, about P25.6 billion ($538.82 million) was allotted for Yolanda reconstruction. while the amount is lowered to P1.3 billion ($27.36 million) for 2017, following the rehabilitation plan.

Next year, the bulk of the housing funds will go to the government’s resettlement program for informal settler families living in danger zones.

For obvious reasons, the Comelec’s share of funds is substantially lowered in 2017 as this year’s budget included allocation for the national elections.

Will promised programs be funded?

The President has been very vocal about his promises, coupled with very strict deadlines.

Among those promised are the pay hike for cops and soldiers, sustaining the Conditional Cash Transfer program, and infrastructure upgrades. (READ: SONA 2016: The Duterte promise tracker)

With only about a month to prioritize his promises in the 2017 national budget, the Duterte administration is limited by what the previous administration has planned, as budget calls started last January.

Initially, Duterte promised last July to implement “incremental” salary increase for soldiers by August. However, budget chief Diokno explained that this year’s budget has no item to grant the increase.

Next year, soldiers and policemen can expect a slight raise in their salaries as P40 billion ($844.50 million) has been allocated for the promise to be realized.

Meanwhile, the highly popular CCT program remains in the government’s 2017 budget with an allocation of P54.9 billion ($1.16 billion). Diokno announced that strict measures will be implemented to avoid leakages.

Living up to Duterte’s promises, the country’s total infrastructure spending for 2017 will increase to P860.7 billion ($18.18 billion), equivalent to 5.4% of the GDP.

Expenditure Program

In terms of sectoral allocation, social services get the biggest chunk of the budget at P1.35 trillion ($28.46 billion), followed by economic services at P923.95 billion ($19.48 billion).

General public services – which include allocations for general administration, public order and safety, other general public services, and subsidies to local government units (LGUs) – are to be given P581.84 billion ($12.27 billion). Defense gets P147.76 billion ($3.12 billion).

The chart below shows allocation per sector in the 2017 NEP as well as in the 2016 GAA:

Compared to the previous administration, the proposed financial plan for 2017 has reduced debt service payments to P334.88 billion ($7.07 billion) from P392.80 billion ($8.29 billion) in 2016. The new deficit target inceased to 3% of GDP.

Higher budget deficit – which will translate to infrastructure programs and human capital expenditure – will “substantially offset” lower debt service, explained Finance Secretary Carlos Dominguez in an earlier report.

In the President’s budget message, the new deficit target for the coming years will allow the administration to spend more on infrastructure, rural development, and social services.

Given the limitations in the proposed national budget for 2017, will the Duterte administration be able to fully maximize the nation’s purse?– Rappler.com

$1 = P47.43

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.