Philippine President Ferdinand Marcos Jr. has asked Congress to approve a 7.2 trillion-peso ($118.1 billion) national budget for 2027, representing a 6% increase from the country’s 2026 spending plan.
The proposed budget comes as the Philippine government seeks to revive economic growth following a slowdown in the economy and a corruption scandal that has affected infrastructure spending.
The country’s economy grew by 2.3% year-on-year in the second quarter of 2026, its weakest growth since 2021. First-half growth stood at 2.6%, below the government’s full-year target of 3.5% to 4.5%.
Education remains the largest recipient of government spending, with 1.15 trillion pesos allocated to the sector, although this is 11.5% lower than the 1.3 trillion pesos provided in 2026.
Healthcare spending is expected to fall to 353.8 billion pesos, down 21% from 448.1 billion pesos this year, while agriculture is allocated 261.7 billion pesos, a 13% reduction.
The Department of Public Works and Highways is set to receive 644 billion pesos, a 22% increase from its 2026 allocation. The department has been at the centre of a corruption investigation involving alleged irregularities in public works projects.
Defence spending is also expected to rise by 7.6%, reaching 328.8 billion pesos, compared with 305.5 billion pesos in the current budget.
According to the Department of Budget and Management, about 316 billion pesos of next year’s budget increase will be used to meet mandatory obligations, including salary adjustments for military and uniformed personnel.
The government expects total expenditures of 6.9 trillion pesos in 2027, compared with projected revenues of 5.2 trillion pesos. This would leave a 1.7 trillion-peso fiscal deficit, which is expected to be financed through borrowing.
The government has set a 5% to 6% annual economic growth target for 2027 to 2030 as it seeks to strengthen economic activity and restore momentum.
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