Acting Budget Secretary Rolando Toledo on Friday said he is opposed to scrapping unprogrammed appropriations (UA) from the 2027 national budget, which the agency has already begun preparing.

Unprogrammed appropriations have no definite funding source and are kept on standby. They are released only if the national government collects excess revenues, earns from new taxes or the sale of state assets, or secures approved loans for foreign-assisted projects.

“The unprogrammed appropriation is not really a bad proposal. What is wrong is how do we use unprogrammed appropriations. It’s very important for us to limit the programs or projects that should be included,” he said during a forum at the UP Diliman School of Economics.

Several groups have called for the abolition of unprogrammed funds, with some lawmakers even asking the Supreme Court to declare UA in the 2026 budget unconstitutional.

“For 2026, we have limited (them) only to three particular list of projects: one is for the foreign assisted project, the risk management program, and the AFP (Armed Forces of the Philippines) Modernization Program,” added Toledo.

He said unprogrammed funds are particularly crucial for foreign-assisted or Public-Private Partnership projects which are sometimes approved after the year's spending plan is already set.

“At the time, there were a lot of foreign-assisted projects that were not yet approved and that is why we put it in the unprogrammed appropriations," he said.

"Once the proposed project has been approved by the ICC (Investment Coordination Committee )… That’s the time we have to tap the unprogrammed appropriations para maituloy yung project. But there is a trigger. You have to have an excess revenue.”

Unprogrammed appropriations, however, were also used to finance billions of pesos worth of flood control projects under the Department of Public Works and Highways in 2023 and 2024.

This period also coincided with a spike in alleged anomalous flood control projects, as revealed in previous congressional hearings.

Toledo confirmed the budget releases from the unprogrammed appropriations were for flood control projects.

But when asked by former National Economic and Development Authority Secretary Winnie Monsod if they noticed anything wrong or detected any possible corruption, he said he was unaware of it until President Ferdinand Marcos Jr. exposed it during his State of the Nation Address in 2025.

“Personally, I found out the issues, actually, when it was ... declared or presented by the president… Not unless that is validated by the agency or COA (Commission on Audit), we don’t know that the problem exists,” he said.

“Whatever report that we receive, that’s the basis for us to say that the projects are being implemented,” added Toledo.

He said the department relies on documentation and reports from the DPWH.

“It is beyond belief that you could not have known about this," Monsod said in response.

"What has happened to the School of Economics? I’m very, very disappointed. It hurts me that this... corruption scandal occurred when members or graduates of the School of Economics were in positions of responsibility.”

Toledo meanwhile vowed stricter budget oversight and other reforms moving forward such as the issuance of National Budget Circular 595-A.

“The head of the agency should have an undertaking certifying that those program that they are going to pay, accounts payable, should be signed and should be notarized— making sure that the projects, yung babayaran nila, are legit. Existing siya, hindi siya ghost, at tsaka legit talaga yung babayaran,” he explained.

Toledo and former Budget Secretary Benjamin Diokno, who was also at the forum, gave different answers when asked about who ultimately approves releases from the unprogrammed appropriations.

Diokno said it’s the president, but Toledo said it just goes through the budget chief.

Diokno countered that the budget secretary signs the release document “but it’s always with the clearance from the president.”

For Monsod, this is proof that Marcos Jr. knew of the alleged budget anomalies even back in 2023 and 2024.

“So the president knew that this was going on. The president has a lot of discretion and I cannot understand why he then said these things... '(that) all of a sudden, has dawned upon me that there is a problem',” she said.

Toledo said he cannot recall how it was during Diokno’s time but insisted the budget secretary can authorize the Special Allotment Release Order without having to go through the president, as long as all the parameters under the special provision of the unprogrammed appropriations are satisifed.

Lacson: 'Giving up Kalayaan islands like surrendering entire country'

"Giving up" the Kalayaan Island Group (KIG) is no different from surrendering the entire country, Senator Panfilo Lacson said on Saturday.

The Senate President Pro Tempore said that under international law, the first discovery and possession of land that "belongs to no one" - like in the case of the KIG - is a recognized mode of sovereign ownership.

“'Giving up' the Kalayaan Island Group is no different from giving up Luzon Island or the entire country. Under international law, first discovery and possession of land that belongs to no one under the legal principle of ‘res nullius’ or ‘terra nullius’ is a recognized mode of sovereign ownership. Even non-lawyers were taught this in school," he said on X (formerly Twitter).

He said that lawyer and adventurer Tomas Cloma discovered the Spratly islands and occupied them as under "res nullius."

Cloma turned over the ownership of the land to the Philippine government. Whoever discovers and occupies the land is recognized as its owner, the senator said.

Lacson cited this legal principle that supports the Philippines' ownership of KIG in reaction to the suggestion of Sen. Rodante Marcoleta of "giving up" the Kalayaan group because its features are "way beyond" the Philippines' exclusive economic zone.

"Yan ang hindi ko mapalampas," Lacson, who visited the KIG in 2021, said in a radio interview.

He pointed out that Kalayaan is a municipality of Palawan, inhabited by some 300 Filipino families.

"When I heard Sen. Marcoleta say that we should give up KIG, I had to clear the issue and assert why KIG is ours. Sen. Marcoleta claimed the KIG is outside the EEZ, and I cannot accept that because there (are) Filipinos living on Pagasa Island," he said in Filipino.

Marcoleta later claimed his statement was taken out of context.

The senator said he was only explaining that the arbitral award on the West Philippine Sea does not cover the Kalayaan Island Group, which includes Pag-asa Island.

"Paano ka ngayon makakagawa ng mapa ng West Philippine Sea pag isinama mo yung Kalayaan Island Group? Kaya hanggang ngayon, pinipilit ko, hinahamon ko sila eh. Hindi nila magawa," he said.