Government eyes P1.3 trillion infrastructure spending in 2026

Department of Budget and Management (DBM) Acting Secretary Rolando Toledo said the national government is targeting infrastructure spending equivalent to 4.3 percent of gross domestic product (GDP) in 2026.

Speaking at a press conference in Malacañang on Wednesday morning, Toledo said that based on the 2026 General Appropriations Act (GAA), the government expects over P1 trillion to be earmarked for various infrastructure projects this year.

“We’re looking at achieving our infrastructure target as [a percentage of] GDP at 4.3 percent,” he said. “At a nominal level, that is equivalent to P1.3 trillion which is based on the GAA,” Toledo added.

President Ferdinand R. Marcos Jr. approved the P6.793-trillion 2026 GAA last week amid heightened scrutiny following last year’s controversial budget, which was marred by allegations of insertions tied to ghost infrastructure projects. In response, Marcos Jr. imposed tighter restrictions on the release of conditional funds, pledging that disbursements would be “transparent, providing the necessary details on the funding source and the corresponding purpose.”

Economists have widely attributed last year’s economic downturn to the fallout from the flood control scandal, which dragged GDP growth in the second half of 2025 amid weak investor confidence and a sharp contraction in public infrastructure spending.

Latest DBM data show that as of October 2025, public infrastructure investment had contracted by 29.4 percent since the President flagged anomalous flood control projects during his State of the Nation Address in late July, translating to roughly P27.4 billion in foregone spending.

The DBM attributed the slowdown partly to the “non-submission of billings by contractors amid ongoing validation of the status of implementation and completion of flood control projects.” Economists from the World Bank and the Asian Development Bank have identified a rebound in infrastructure spending as a key driver of an economic recovery in 2026.

Toledo said accelerating infrastructure disbursements remains a priority for the Marcos Jr. administration this year.

“As much as possible, we want to increase further, moving forward in the medium term, so we want to increase investment in terms of our infrastructure projects,” he said.

The ghost infrastructure controversy emerged under the tenure of former DBM Secretary Amenah Pangandaman, who oversaw the release of the 2025 budget. Critics alleged she had knowledge of, or enabled, questionable budget insertions tied to flood control projects.

In a video posted online, fugitive former congressman Zaldy Co claimed Pangandaman personally asked him to confirm an alleged order from the President involving roughly P100 billion in flood control insertions—claims she denied. Days later, Pangandaman and Executive Secretary Lucas Bersamin resigned out of delicadeza, with Toledo subsequently appointed acting DBM secretary.

Toledo assured the public that the 2026 budget contains no ghost projects and said the infrastructure spending target is achievable.

“There’s no reason for us to delay and no ghost projects. We can achieve the projected target as far as our infrastructure is concerned,” he said, adding that a significant portion of infrastructure funds will be implemented by local government units, citing their familiarity with local needs.