A proposed budgeting code — but where are the guardrails?

The proposal to adopt a Philippine Budgeting Code is both timely — and long overdue.

For decades, the country’s budgeting framework has been held together by a patchwork of laws, executive issuances, administrative practices and, as I would humor the late Department of Budget and Management (DBM) Secretary Emy Boncodin, budget practices in the minds of our budget experts, like Secretary Boncodin. Core provisions still trace back to the Administrative Code of 1987. Many of the most important reforms in public financial management exist not in statute, but in circulars and evolving practice — fragile, reversible, and unevenly applied.

This is not a system designed for consistency or accountability. It is a system that has adapted over time — but without a coherent legal foundation.

A Budgeting Code promises to fix that. But whether it actually does depends on a more uncomfortable question: Will it strengthen the guardrails of the public purse — or simply formalize the system we already have?

BRIDGING POLICY AND PRACTICE
A Budgeting Code is often presented as a technical exercise. It should not be.

At its core, budget codification is an attempt to align two dimensions of governance that, in the Philippine context, are frequently misaligned.

On one hand is public finance as policy architecture. It is the Constitution’s design for controlling the most dangerous form of power in government: the power over public money. It allocates authority, imposes limits, and embeds accountability across institutions. It answers the structural questions: Who may tax? Who may appropriate? Who may spend? Who must account?

On the other hand, the budget is where that architecture is inhabited. It is the point where constitutional principles leave the text and enter the real world. Every year, through the budget, the abstract rules of public finance are tested against political pressures, economic urgency, constituency priorities, and human discretion. The budget is not merely a financial plan; it is a law, and more than that, it is the Constitution at work.

In theory, the budget is the most precise expression of policy.

In practice, it is often the product of accommodation, a lived reality — where priorities are negotiated, reshaped, and sometimes diluted in the course of allocation and implementation.

A Budgeting Code, if it is to mean anything, must bridge this gap. Otherwise, it risks becoming little more than a well-organized description of a system that does not consistently work as intended.

THE PHILIPPINE REALITY
The gap between policy and practice in Philippine budgeting is not incidental. It is structural.

The legal framework remains fragmented. Key rules are dispersed across multiple sources, with important aspects of budgeting left to administrative discretion rather than anchored in law.

More critically, the real vulnerabilities of the system emerge after the budget is enacted.

It is at the point of execution — when funds are released, realigned, and utilized — that discretion expands, and transparency often thins out. The connection between what Congress appropriates and what is actually spent becomes less visible, and therefore less accountable.

At the same time, the continued reliance on special purpose funds and similar mechanisms has made the budget more complex than it needs to be — adding layers that can obscure rather than clarify how public resources are allocated.

The result is a system where the budget reflects not only national priorities, but also the realities of negotiation, accommodation, and, at times, political pressure.

CODIFICATION: NECESSARY, BUT NOT SUFFICIENT
A Budgeting Code can address some of these weaknesses.

It can bring coherence to a fragmented system, institutionalize reforms, and reduce the excessive reliance on administrative issuances. These are real and important gains.

But codification is not reform in itself.

The central problem is not simply the absence of a comprehensive legal framework. It is the persistent gap between rules and reality.

A Budgeting Code can organize the system. It cannot, on its own, discipline it.

Without stronger safeguards in budget execution, more meaningful transparency, and effective oversight, codification risks doing something far less ambitious than reform: It risks legitimizing existing practices by giving them the appearance of structure.

CODIFICATION IN A POLITICAL SYSTEM
This is where the discussion must become more candid.

Budget reform in the Philippines is not constrained by a lack of technical knowledge. It is constrained by the political environment within which the budget operates.

The strong emphasis on administrative rules and procedures in current proposals reflects a bureaucracy that understands its limits. Budget institutions operate in a system where political actors wield considerable influence over the allocation of public resources. Faced with this reality, technocratic reform tends to focus on what it can control — the legal and administrative framework — while avoiding the more difficult terrain of political incentives.

This is not a failure of understanding.

It is an adaptation to power.

But it also defines the limits of what a Budgeting Code, on its own, can achieve.

Because the most important guardrails of the budget are not merely procedural. They are institutional — and ultimately political.

THE GUARDRAILS THAT MATTER
The Philippines does not simply need a more organized budget system. It needs one that is more disciplined, more transparent, and more accountable.

A Budgeting Code can be a step in that direction — but only if it does more than codify procedures. It must strengthen the safeguards that ensure that public funds are used as intended, and that deviations from those intentions are visible and accountable. Otherwise, the reform risks being largely cosmetic.

The real test of a Budgeting Code is not whether it makes the system easier to describe. It is whether it makes the system harder to misuse. Because in the end, the budget is not just a financial plan. It is an exercise of power.

And the question that any serious reform must answer is simple: Who controls that power — and what constrains it?

In the next column, we will examine the political economy of the budget process — and why reform requires not just better rules, but the will to enforce them.

Atty. Florencio “Butch” B. Abad was formerly the secretary of the Department of Budget and Management. Currently, he is a professor of Praxis  at the Ateneo School of Government. He is also a senior professional lecturer at the DLSU Tañada-Diokno School of Law.