Government to restore P107 billion PDIC funds over 2 years

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August 15, 2026 | 12:00am

MANILA, Philippines — The government seeks to restore the entire P107.23 billion previously remitted by the Philippine Deposit Insurance Corp. (PDIC) to the national coffers over two years, starting with P57 billion under the proposed 2027 national budget.

Executive Secretary Ralph Recto told The STAR that the government would complete the restoration in two tranches, confirming that the remaining P50.23 billion would be included in the 2028 National Expenditure Program (NEP).

“It will take two years to do it,” Recto, who served as finance secretary from 2024 to 2025, said. “It will be included in the 2028 NEP.”

Asked whether the remaining balance would also be lodged under unprogrammed appropriations (UA) in 2028, Recto said the government has yet to decide how it would be funded.

“It’s either as programmed or unprogrammed appropriations. We will review revenue sources by then,” he said.

Under the proposed 2027 NEP, P57 billion has been allocated under UA specifically for the “Restoration of the Fund Balances of the Philippine Deposit Insurance Corp.”

The amount represents about 53.2 percent of the P107.23 billion previously transferred by PDIC, leaving P50.23 billion for restoration in 2028.

PDIC remitted the P107.23 billion to the Bureau of the Treasury in January 2025 pursuant to a congressional mandate under the 2024 General Appropriations Act and an opinion from the Office of the Government Corporate Counsel.

However, UP School of Economics professor and former finance undersecretary Cielo Magno questioned why the P57-billion first tranche was placed under unprogrammed appropriations rather than the programmed portion of the budget.

Magno said she was willing to accept the government’s proposal to return the funds in two tranches given its limited fiscal room. But she stressed that putting the amount under UA means funding for the restoration is not automatically available.

“Our expectation is that they should have placed this under programmed appropriations. We are already accommodating the government’s plan to return the funds in two tranches,” Magno said.

“But they should respect the commitment and place it under the portion of the budget that has actual funding. If they don’t do that, we are ready to go to court and file a case to have the PDIC funds returned,” she added.

Unlike programmed appropriations, UA serves as standby authority that may be released only when certain funding conditions are met.

The restoration of PDIC’s fund balance is among the expenditures that require excess revenue collections from identified non-tax sources or new revenue collections that were not included in the government’s original revenue assumptions.

The proposed P57-billion restoration will account for nearly 51 percent of the entire P111.98-billion unprogrammed appropriations proposed for 2027, making the PDIC fund replenishment one of the largest items in the standby spending pool.

Speaking at the 2026 EJAP Economic Forum, Budget Secretary Kim Robert de Leon said that unprogrammed appropriations are subject to clear conditions before funds can be released.

“Unprogrammed does not mean unaccounted for. It is not a blank check, and it’s certainly not an unlimited spending authority,” De Leon said. “It has clear purposes and well-defined triggers prior to release.”

Overall UA for next year is 25.8 percent lower than the P150.91 billion provided for the current year, based on the 2027 expenditure program.

The P111.984-billion UA is the lowest proposed at the NEP level since 2019. It is also equivalent to just 1.6 percent of the government’s total expenditure program, the lowest UA-to-budget ratio since 1991.

The proposed P7.2-trillion national budget for 2027 has been submitted to Congress, where lawmakers may still amend allocations before the spending plan is enacted into law.