Gatchalian raises alarm on DPWH budget cuts, warns of ripple effects

Senator Win Gatchalian expressed concern over the possible economic repercussions of the Department of Public Works and Highways’ (DPWH) reduced 2026 budget, saying the cuts could slow down construction activities, affect employment, and dampen the country’s economic growth.

In a recent radio interview, Gatchalian underscored the importance of sound financial management — whether in running a business or governing a nation.

“Whether negosyo or sa pagpapatakbo ng bansa, important yung pagmamanage ng pera,” he said.

The senator explained that while the Philippines continues to run on a budget deficit and carry debt, the government has managed to sustain growth in recent years.

“Kahit na may utang at deficit, nag-u-upgrade tayo,” he said, noting that previous administrations were able to pay off dues because the economy expanded fast enough to cover obligations.

However, Gatchalian admitted feeling uneasy about the 2026 outlook due to the DPWH’s reduced budget.

“Kinakabahan ako for 2026,” he said, explaining that the budget cut—partly prompted by flood control project anomalies—could lead to fewer construction projects and heighten concerns about corruption.

“Mas konti ang kontraktor na makukuha nila, mas konti ang kukuning trabahador,” he warned, adding that this could result in job losses unless displaced workers are transferred to other government agencies.

According to the senator, infrastructure spending accounts for about 14% of the country’s economy, making it a major driver of growth. Any slowdown in public works, he said, could ripple across sectors and reduce overall productivity.

At the same time, Gatchalian pointed out that debt servicing now consumes around 18–20% of the national budget. The increasing cost of repaying debt, he said, limits fiscal flexibility and underscores the need to maintain strong economic performance.

“What’s important is that our economy grows—not going below 5% or 5.5%,” he said. “Kapag lumalaki ekonomiya natin, mas maraming negosyo, mas maraming nagbabayad ng buwis, at hindi tayo magkakaroon ng problema sa pagababyad ng utang.”

Gatchalian also raised concerns about the country’s foreign-denominated debt, revealing that about 30% of the Philippines’ total debt is in US dollars.

“As the dollar gains strength, so does our utang in dollar denomination,” he explained. “If the peso continues to weaken, our dollar debt will surely rise.”

The senator concluded by emphasizing the delicate balance between borrowing and growth.

“Hindi naman tayo puwedeng sobra umutang na mababa yung paglaki ng ating ekonomiya,” he said.

Gatchalian urged fiscal discipline and transparency in public spending, warning that unchecked corruption and inefficient budgeting could undermine the country’s recovery and long-term growth prospects.