DBM pushes rules-based budgeting

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February 27, 2026 | 12:00am

MANILA, Philippines —  The Department of Budget and Management (DBM) is moving to institutionalize tighter fiscal guardrails through a proposed Philippine Budgeting Code that seeks to formalize budget reforms and limit the use of unprogrammed appropriations as a discretionary funding tool.

In a statement, the DBM said it is drafting the measure to “institutionalize key fiscal reforms,” including clearer parameters governing the level, scope and conditions for the release of unprogrammed appropriations.

“A central policy intention under the proposed reform is to ensure that unprogrammed appropriations are confined to a limited and clearly defined purpose,” the agency said, noting that the move aims to prevent their use as a broad funding mechanism and reinforce fiscal discipline.

The proposed code is part of efforts to strengthen budget preparation, execution and accountability by embedding the reforms currently being implemented into a single rules-based framework. The DBM has also been pushing for greater citizen participation and clearer budget timelines as part of broader public finance reforms.

As part of its fiscal policy direction, the DBM said it supports adopting a more prudent approach by setting the level of unprogrammed appropriations at a rate lower than five percent of the total national budget, based on historical data and fiscal trends.

“The precise threshold, however, will remain subject to further deliberation and the President’s approval in the context of the proposed Budgeting Code,” it added.

The draft measure will undergo review by the economic team and the executive secretary before it is finalized, with the agency noting that discussions remain under policy development and inter-agency consultation.

Acting Budget Secretary Rolando Toledo earlier said that the DBM is looking to keep unprogrammed appropriations at a lower level as part of efforts to strengthen fiscal discipline under the proposed reforms.

He said the level could be reduced to around three percent of the total national budget, although the final threshold would still be subject to legislative deliberations.

The proposed three-percent cap refers to the share of unprogrammed appropriations in the national budget. These are standby spending items that can be released only once financing sources, such as excess revenues or new borrowings, are secured.