A BUDGET BATTLE: Who Wins, Who Loses, and Who Pays the Price?

As the Philippines implements its 2025 National Budget, significant budget cuts have sparked widespread concern among citizens and stakeholders alike. With key departments in education, health care, and transportation facing specific substantial reductions, the implications of these financial decisions could reverberate throughout the nation for years to come.

The Philippine government has unviled a ₱6.352 trillion budget for 2025, markng a 10.1% increase from the ₱5.768 trillion budget alocated for 2024. However, this growth comes at a cost, as several key sectors are experiencing notable budget cuts. As discussions unfold regarding the effectiveness and fairness of these cuts, many are left wondering how these financial decisions will affect the everyday lives of Filipinos.

Among the most affected sectors is the Department of Education, which has seen a reduction of ₱12 billion from its previous allocation. This cut comes despite ongoing calls for increased funding to improve educational facilities and resources, particularly in the wake of the pandemic's disruption to learning.

The Department of Education’s budget now stands at ₱737 billion from ₱924.7, raising alarms among educators and parents who fear that this reduction will exacerbate existing challenges in the education system such as inadequate infrastructure, widening digital divide, and insufficient learning materials. 

The proposed ₱12 billion cut to the Department of Education's budget for 2025 has elicited reactions from various leaders. Alliance of Concerned Teachers Teachers party-list Rep. France Castro condemned the reduction, stating, "This budget cut is completely unacceptable and shows where this administration’s priorities truly lie". 

Education Secretary Sonny Angara expressed disappointment, noting that "Sadly, Congress cut the president's proposed budget for the Department of Education."

Senator Grace Poe defended the budget, asserting that despite cuts, education remains a priority. "Working with finite resources to fund infinite needs is not an easy choice,” Poe said.

While Poe emphasizes that the overall budget for DepEd has increased by ₱19 billion compared to the previous year, many argue that this increase does not compensate for the cuts or address the urgent needs of schools struggling with inadequate resources and infrastructure. 

The juxtaposition of claims about prioritizing education against actual budgetary decisions raises concerns about the government's true commitment to fostering a robust educational system, particularly in light of ongoing challenges such as the digital divide and insufficient learning materials.

Results revealed that the education sector continued to grapple with high dropout rates, with reports indicating that approximately 90% of Filipino students aged 10 could not read and understand age-appropriate texts. This alarming statistic highlights a broader learning crisis exacerbated by prolonged school closures during the pandemic, which left many students without access to necessary learning resources. Furthermore, the country faced a severe teacher shortage, with an estimated 86,000 teacher vacancies that contributed to overcrowded classrooms and inadequate student support.

PhilHealth, the country’s national health insurance program, has received no subsidy in this budget cycle. This decision is particularly contentious given that PhilHealth has amassed substantial reserves but continues to face scrutiny over its financial management. 

Senator Grace Poe, chair of the Senate finance committee, announced on December 11 that PhilHealth will not receive any government funding in 2025. This decision is based on the state health insurer's significant P600 billion reserve fund.

While this substantial reserve may suggest financial stability, it raises critical questions about whether these funds are sufficient to justify the removal of government subsidies. PhilHealth's reserve fund, although large, has been criticized for being underutilized; it is legally required to maintain reserves equivalent to only two years' worth of average benefit payments.

The proposed zero subsidy for the Philippine Health Insurance Corporation (PhilHealth) under the 2025 budget has raised significant concerns among lawmakers and health advocates. Senators Risa Hontiveros, JV Ejercito, and Bong Go have voiced their apprehensions regarding the implications of this decision on healthcare access for vulnerable populations.

Hontiveros described the zero subsidy as "unfair, illegal, and potentially unconstitutional," emphasizing that "denying PhilHealth support to pay the premium contribution of the most vulnerable is to deny Filipinos our right to health.”

By denying the ₱74.431 billion subsidy intended to help cover premium contributions for the most vulnerable populations, the government effectively denies these individuals access to essential healthcare services, which is a fundamental human right. This decision contradicts constitutional mandates that require equitable access to health care and undermines the principles of the Universal Health Care Law.

She also highlighted the government's obligation to fund premiums for indirect contributors, such as senior citizens and persons with disabilities, stating, "Paano na lang ang mga kababayang hindi makakapagbayad ng kanilang premium contribution? Malaking dagok ito sa mithiin nating magkaroon ng universal healthcare sa bansa.”

Without government funding to cover these premiums, many low-income Filipinos could face barriers to accessing necessary health services, exacerbating existing health disparities. If individuals cannot pay their premiums due to the lack of subsidy, they risk losing coverage, which could lead to increased out-of-pocket expenses for medical care. This situation threatens the very foundation of the Universal Health Care Law, which aims to provide equitable access to health services for all Filipinos. 

Ejercito echoed her sentiments, expressing concern that this decision could raise legal questions. He noted that the Sin Tax Law earmarks funds for PhilHealth contributions and warned that "the legality ang baka maquestion kasi nga nasa batas yan na its already earmarked.” 

The Sin Tax Law, enacted in 2012, significantly increased excise taxes on alcohol and tobacco products, with approximately 85% of the incremental revenues allocated to support health programs and PhilHealth contributions for low-income individuals. 

By cutting the PhilHealth subsidy, the government risks undermining its commitment to universal health care and violating the legal framework established by the Sin Tax Law, which was designed to ensure that health funding is both adequate and equitable for vulnerable populations.

Despite the proposed removal of government subsidies for PhilHealth in the 2025 national budget, President Ferdinand Marcos Jr. affirmed on December 26 that PhilHealth services will remain operational. “Napakasimple lang ng guarantee ko — kahit may subsidy, kahit walang subsidy, kahit anong contribution, all of these issues, hindi mababawasan ang serbisyo ng Philhealth,” Marcos said.

Marcos explained that PhilHealth has sufficient funds to continue its operations, citing a reserve fund of approximately ₱600 billion and an annual operational cost of less than ₱100 billion. He emphasized that the removal of the subsidy would not diminish the quality or quantity of services provided, and in fact, he claimed that benefits might even expand. This assurance comes amid concerns from various sectors about the potential impact of budget cuts on health coverage for vulnerable populations

Health Secretary Teodoro Herbosa has also assured the public that PhilHealth will continue to provide services despite the zero subsidy, citing a P150 billion surplus from its 2024 budget.

It can be noted that the health sector also faced systemic issues such as chronic underfunding and inadequate infrastructure. Reports indicated that many hospitals and clinics were operating with insufficient resources, leading to overcrowded facilities and long wait times for patients. The proposed budget cuts affected specialty hospitals significantly, with reductions in allocations for major institutions like the Lung Center of the Philippines and the National Kidney and Transplant Institute.

The Department of Transportation (DOTr) is facing significant budget cuts for 2025, with its alocation reduced from an initial proposal of ₱180.89 billion to just ₱89.82 billion. The reduced funding could limit maintenance and upgrades for existing transport systems, exacerbating traffic congestion and inefficiencies that already plague urban areas. 

Senate Senior Deputy Majority Leader JV Ejercito has been vocal about the need for increased funding for priority railway projects, including the Philippine National Railways South Long-Haul Project and the Mindanao Railway Project.

The PNR South Long-Haul Project seeks to connect Metro Manila with southern Luzon provinces like Laguna, Batangas, and Quezon, significantly improving passenger travel times and freight efficiency while alleviating road congestion. 

Meanwhile, the Mindanao Railway Project aims to establish a comprehensive rail network across Mindanao, covering approximately 1,544 kilometers and facilitating faster movement of goods and people between key cities such as Cagayan de Oro and Laguindingan Airport. 

"This cut derails the effort of the government to develop the sector," Ejercito stated emphasizing that adequate funding is important for enhancing connectivity and reducing traffic congestion in urban areas.

Transportation Secretary Jaime Bautista expressed disappointment over the budget cuts, noting that a larger budget would have translated into more jobs and better infrastructure. He indicated that 74% of the proposed budget was intended for capital outlays to support big-ticket infrastructure projects in railways and airports.

In the 2025 national budget, the education sector has seen a significant increase, receiving an allocation of ₱1.055 trillion, up from ₱924.7 billion in 2024. This increase is aimed at enhancing educational facilities and resources, addressing ongoing challenges within the system, particularly in light of the disruptions caused by the COVID-19 pandemic.

The infrastructure sector has also experienced a notable increase, with funding rising to ₱1.007 trillion from the previous year’s allocation. This growth is intended to support projects that improve transportation networks and public works.

This growth is intended to support various projects aimed at improving transportation networks and public works across the Philippines. Key plans include significant investments in the North-South Commuter Railway System, which will receive ₱63.907 billion, and the Metro Manila Subway Project, Phase I, with an allocation of ₱39.374 billion.

Additionally, funding will be directed towards the Bataan-Cavite Interlink Bridge Project with ₱11.672 billion, and the Cebu Bus Rapid Transit Project, which is allocated ₱5.868 billion. Other notable projects include the Pasig-Marikina River Channel Improvement Project and the Metro Manila Flood Management Project, which will also receive substantial funding to enhance urban infrastructure and mitigate flooding issues

Additionally, the overall health sector budget has increased to ₱267.8 billion, despite the contentious decision to eliminate subsidies for PhilHealth.