I TRIED TO UNDERSTAND THE ₱7.2-TRILLION BUDGET. IT WASN’T WHAT I THOUGHT IT WAS.

Like any ordinary Filipino, I do not really understand how the government budget works. I know we have one every year, Congress holds hearings about it, politicians fight over allocations, and every so often somebody points to an item and calls it an “insertion.”

Beyond that, ask me to explain how the whole thing works and I would probably get lost.

That was why I started reading about the 2027 National Expenditure Program, or NEP. Before doing my own digging, I tried reading write-ups by other bloggers about it, hoping someone had already explained the whole thing in a way I could follow.

The problem was that most of what I found seemed to assume that I already understood what they were talking about and how the budget process worked.

NEP. GAA. Programmed appropriations. Automatic appropriations. Unprogrammed appropriations. Allotments. Obligations. Disbursements.

I would understand one paragraph, encounter a term I did not know, look it up, and discover three more terms I did not know.

So I decided to start from zero. I wanted to understand what the NEP actually was, how a proposed national budget becomes law, and what government really means when it says it is proposing a ₱7.2-trillion budget for 2027.

What I found was more complicated than the number we usually see in the headlines, but not impossible to understand once I stopped treating “the budget” as though it were one number and one event.

The easiest way I found to keep things straight was to separate two questions in my head.

First: What is government legally allowed to spend or commit?

Second: What money was actually released, committed and paid?

Those are related questions, but they are not the same question.

DEFINITION OF TERMS

Before going further, I had to learn a few basic terms because almost everything else depends on them.

NEP — National Expenditure Program. The President’s proposed national budget submitted to Congress. It is not yet the final budget law.

GAA — General Appropriations Act. The annual budget law after Congress has acted on the proposal and the President has signed it, subject to any vetoes.

Appropriation. Legal authority for government money to be used for a particular purpose. It does not necessarily mean the money has already been released or spent.

Allotment. The amount an agency is authorized to commit for an approved purpose.

Obligation. A commitment by government to pay for something, such as a contract, purchase or service.

Disbursement. The actual payment of government money to settle an obligation.

There are other terms we will encounter, but these six were enough for me to start following the process without having to stop every few paragraphs and look something up.

WHAT EXACTLY IS THE NEP?

The National Expenditure Program is essentially the President’s proposed budget. Government agencies prepare their requests, the Department of Budget and Management evaluates them, the Executive settles on proposed allocations and priorities, and the resulting NEP is submitted to Congress.

Congress then deliberates on the proposal. The House and Senate act on the budget bill, differences are reconciled, Congress sends the final bill to the President, and after presidential action we eventually get the GAA.

That corrected one assumption I had been making for years. Whenever somebody said that something was “in the budget,” I treated that as though there were only one budget document.

There isn’t.

Something may already be in the President’s NEP. It may later be changed in the House, altered in the Senate, modified during the bicameral conference, vetoed by the President, or retained in the final GAA.

So when somebody tells me that a project or allocation is “in the budget,” I now know that the next question should be: Which budget?

That matters because the answer can tell us something about where an item came from.

SO WHAT DOES ₱7.2 TRILLION ACTUALLY MEAN?

The proposed 2027 Total Expenditure Program, or TEP (the total amount of financial commitments government plans to be allowed to make during the year), is about ₱7.2 trillion.

My natural interpretation was simple: government plans to spend ₱7.2 trillion in 2027.

That is close enough for casual conversation, but it is not exactly what the figure means. The TEP is an obligation budget, meaning it refers to the amount of commitments government may incur, not necessarily the amount of cash that will physically be paid out during the same year.

That distinction becomes clearer when the government's own numbers are placed beside each other. The proposed 2027 Total Expenditure Program is around ₱7.2 trillion, while projected 2027 cash disbursements are around ₱6.9 trillion.

Both figures can be correct because they are measuring different things.

Government may enter into an obligation in 2027 without the actual payment happening at exactly the same time. Likewise, some cash paid in 2027 may settle obligations incurred earlier.

The next thing that confused me was discovering that the ₱7.2 trillion itself is not one single type of appropriation.

About ₱4.494 trillion consists of Programmed New General Appropriations (spending for which government has already identified the funding when the budget is prepared).

Another ₱2.706 trillion consists of Automatic Appropriations (spending already authorized under existing laws and therefore not requiring Congress to create a fresh annual appropriation for it).

Put those together and you get the roughly ₱7.2-trillion Total Expenditure Program.

That made the number much easier for me to understand:

₱4.494 trillion programmed + ₱2.706 trillion automatic = roughly ₱7.2 trillion.

There is also another official figure: about ₱4.606 trillion in New General Appropriations.

This was where I got confused again because I instinctively wanted to subtract ₱4.606 trillion from ₱7.2 trillion and figure out what the difference represented.

That would be the wrong way to read the figures.

The ₱4.606 trillion is constructed differently. It consists of the ₱4.494 trillion in Programmed New General Appropriations plus about ₱111.984 billion in Unprogrammed Appropriations (standby spending authority that can be used only when specified additional funding conditions are met).

So the same ₱4.494 trillion appears in two different calculations.

One calculation helps make up the ₱7.2-trillion expenditure program.

The other tells us how much in new annual appropriations Congress is being asked to authorize.

Once I understood that, the numbers stopped looking like contradictions.

AUTOMATIC DOES NOT MEAN AUTOMATICALLY SPENT

The ₱2.706 trillion in Automatic Appropriations surprised me because that is about 37.6 percent of the entire ₱7.2-trillion expenditure program.

My first question was obvious: if Congress passes a national budget every year, how can more than a third of the expenditure program already be automatic?

The answer is that another law has already provided the legal authority for those expenditures. Congress does not have to recreate that authority from scratch in every annual GAA.

But “automatic” does not mean the money simply goes out automatically.

Those appropriations are still subject to government budgeting, accounting and auditing rules. The legal authority may already exist, but actual execution still has to follow the budget system.

Two items account for almost all of the automatic portion.

The National Tax Allotment, which is the legally determined share going to local government units, is approximately ₱1.320 trillion for 2027. Interest payments on government debt are approximately ₱1.114 trillion.

Together, those two account for almost 90 percent of all Automatic Appropriations and roughly one-third of the entire ₱7.2-trillion expenditure program.

The year-to-year increase made this even more interesting.

The Total Expenditure Program increased by roughly ₱407 billion from 2026 to 2027. Of that increase, approximately ₱316 billion came from higher Automatic Appropriations.

That is almost eight pesos out of every ten pesos of the increase.

So when I hear that the proposed national budget increased by around 6 percent, I can no longer automatically interpret that as government simply deciding to spend 6 percent more on new programs. Much of the increase can come from obligations and transfers already built into the system.

I also cannot simply subtract Automatic Appropriations from the total and declare everything left over to be freely available money. The programmed budget still has to pay salaries, keep agencies operating, continue existing programs and fund commitments government already has.

There is no easy subtraction that tells me how much of the national budget is genuinely available for completely new choices.

UNPROGRAMMED DOES NOT MEAN “NO ONE KNOWS WHAT IT IS FOR”

The term Unprogrammed Appropriations sounded suspicious to me when I first encountered it because I assumed “unprogrammed” meant the government had money sitting around without knowing what to do with it.

That is not what it means.

The proposed 2027 Unprogrammed Appropriations amount to around ₱111.984 billion, and the purposes are already identified. They include foreign-assisted projects, restoration of certain Philippine Deposit Insurance Corporation fund balances, risk-management requirements and certain government advances involving government corporations.

What makes them “unprogrammed” is not that nobody knows their purpose. It is that the authority is standby or conditional and can only be used when the required funding conditions are met.

That distinction makes the name easier to remember.

Programmed means the funding has already been identified.

Unprogrammed means the authority exists, but the required additional funding still has to materialize under the conditions set by law.

That is very different from a blank check.

APPROPRIATED DOES NOT MEAN SPENT

This was probably the most useful thing I learned because I had been using several budget words almost interchangeably.

I would read that Congress had “allocated” a certain amount, then see a report that DBM had “released” another amount, then later read that an agency had “spent” something else. If those numbers did not match, my instinct was to wonder which one was wrong.

Sometimes none of them is wrong because they are talking about different stages.

An appropriation is the legal authority to use government money for a particular purpose. An allotment is the amount an agency is authorized to commit. An obligation happens when government enters into a commitment that it must pay, and a disbursement is when the money is actually paid.

In simplified form:

proposed → appropriated → allotted → obligated → disbursed

That chain does not mean every government peso always moves through the exact same paperwork in exactly the same way. Some appropriations may already be considered released under the GAA while others require additional conditions or budget actions.

For an ordinary citizen trying to understand a news report, however, the important distinction is much simpler:

Appropriated does not automatically mean spent.

An amount appearing in the GAA does not necessarily mean the entire amount has already been paid out. An agency being authorized to commit money does not mean it has already spent all of it, and an obligation can exist before the corresponding cash payment has been completed.

That changes how I now read claims about billions supposedly being “spent” simply because somebody found the amount in the GAA.

WHY COMPARING THE NEP AND GAA MATTERS

Once I understood that the NEP was only the Executive’s starting proposal, I became curious about what happens when a number changes before becoming law.

The 2026 budget gave me a useful example through the Medical Assistance to Indigent and Financially Incapacitated Patients program, or MAIFIP, which provides medical assistance to qualified patients.

In the President’s 2026 NEP, MAIFIP had about ₱24.2 billion.

In the final 2026 GAA, it had about ₱51.6 billion.

That is a difference of roughly ₱27.4 billion, meaning the final appropriation was more than double the amount in the original proposal.

My first instinct was to say: Congress inserted ₱27 billion.

But the two documents alone do not prove that.

What they prove is that the number changed somewhere between the President’s original proposal and the final law.

To establish who actually originated the change, we would have to follow what happened in between. Was there a later request from the Executive? Did the House change the amount? What did the Senate do? What happened during bicam? What ultimately reached the President?

That may sound like splitting hairs, but it is important if we are going to accuse a particular person or institution of inserting money into the national budget.

The NEP and GAA give us two points on the timeline.

They do not automatically tell us everything that happened between them.

WHY THE 2027 NEP IS WORTH SAVING NOW

The 2027 NEP was submitted to Congress on August 11. That makes the document valuable precisely because the congressional process is only beginning.

It gives us the Executive’s starting position.

From here, we can eventually compare the NEP, the House version, the Senate version, the bicameral conference report, the bill sent to the President, presidential action and the final GAA.

After that comes another set of questions: how much was allotted, how much was obligated and how much was actually disbursed.

That gives ordinary people like me a much better way of looking at controversial budget items.

If a project appears in the final budget, I can first ask whether it was already in the President’s NEP. If it was not, I can look for the point where it first appeared and try to determine who proposed the change.

Even after finding that answer, I still have to ask whether the appropriation was actually released, committed and eventually spent.

That is considerably more work than looking at two numbers on Facebook and declaring that somebody stole or inserted the difference.

But it is also considerably more accurate.

I started this exercise thinking the national budget was basically one ₱7.2-trillion number that government would divide among agencies and then spend.

It is not.

The ₱7.2 trillion is an expenditure program made up of different kinds of spending authority. Some appropriations require fresh annual authorization, some already have authority under existing laws, some are conditional, and the amount government is legally allowed to commit is not necessarily the same as the cash it will actually pay during the year.

I still would not pretend that I now understand every corner of the Philippine national budget. If anything, reading the documents made me realize how dangerous it is to become confident after learning only one part of the process.

But I understand enough now to know what questions I should be asking.

An amount appearing in the GAA does not automatically tell me who put it there.

An appropriation does not automatically tell me how much was released.

A release does not automatically tell me how much was eventually spent.

And the ₱7.2-trillion headline does not describe one giant pile of money waiting for politicians to divide.

The NEP does something much more useful for those of us who want to follow what happens to public money.

It tells us where to start looking.