World Bank urges Philippines to cap unprogrammed budget funds at 5%

The World Bank’s Philippines Public Finance Review warns that unprogrammed appropriations have expanded to around 12%-15% of recent annual budgets, allowing discretionary spending to sidestep normal scrutiny. To address this, the bank suggests capping such funds at 5% of the General Appropriations Act and linking disbursements to triggers approved by the Development Budget Coordination Committee. The latest budget proposal for 2027 reflects a significant decline in unprogrammed appropriations, reaching the lowest proportion since 1991, because many items have been moved into programmed appropriations for tighter oversight.

World Bank senior economist Jaffar Al Rikabi emphasized that the cap and clear usage criteria would close a loophole in budget discipline. While acknowledging the need for some standby funding for unforeseen events, the bank stresses keeping it at a minimal, transparent level to preserve budget credibility.