Mr Hammond agreed during Commons question time to treat the A1 as a "national strategic road", rather than a regional road.
But throughout the session he warned that the state of the nation's finances would constrain transport projects, describing the "black hole" as the "most serious problem facing our country today".
Campaigners have long pressed – unsuccessfully – for the A1 to be made a full dual carriageway.
Liberal Democrat Sir Alan Beith (Berwick-upon-Tweed) asked: "Are you going to treat the A1 as a national strategic road, rather than a regional road, and develop plans for full dualling of it when resources allow?"
Mr Hammond replied simply: "Yes."
Large parts of the road are single carriageway, especially between Newcastle upon Tyne and Edinburgh. Campaigners in the Borders claim that making a dual carriageway of that stretch would improve the road's record of fatal accidents.