THE Department of Budget and Management (DBM) said it will issue a circular ordering National Government (NG) agencies to reduce non-essential spending by 20%, citing the need to create additionalfiscal space.
“We will be issuing the circular on this for all National Government agencies,” Budget Secretary Rolando U. Toledo said at a House hearing on Wednesday.
In a statement issued on Thursday, the DBM said efficiency measures include limiting official travel, maximizing virtual engagements, strengthening energy conservation efforts, and streamlining operational expenditures.
“We exempted education, health, social, general public service, and defense (operations) with frontline services and significant supplies and materials required based on their mandated functions,” Mr. Toledo said.
Depending on the level of compliance, he said the measure is expected to generate savings of between P12.8 billion and P25.6 billion.
A legislator on Wednesday proposed cuts as deep as 40%, noting that the projected savings accounted only for 0.3% of the total budget for 2026.
“The DBM welcomes the proposal from our lawmakers to increase the reduction in non-essential government spending from 20% to 40%,” Budget Undersecretary Goddes Hope O. Libiran toldBusinessWorldvia Viber.
The DBM will undertake a careful and data-driven assessment of the proposal, including an estimate of projected savings, impact on operations, and second-order effects on service delivery and economic activity.
“While expenditure rationalization is a necessary tool during periods of fiscal stress, it must be calibrated to ensure that it does not inadvertently constrain critical government functions or dampen ongoing priority,” Ms. Libiran said.
“Therefore, any adjustment to the current 20% reduction policy will be guided by rigorous analysis, implementation feasibility, and alignment with the administration’s broader fiscal consolidation strategy,” she added.
The DBM has identified P238 billion in available funding to support the government’s response to the energy crisis.
Sourced from the 2026 General Appropriations Act, the funding pool will support fuel subsidies for the transport sector, assistance to farmers and fisherfolk, healthcare support, and other targeted social protection programs. —Justine Irish D. Tabile
