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Government infrastructure spending in the Philippines plunged 43.5% to P147.8 billion in Q1 2025, as stricter validation of flood control projects and weaker DPWH disbursements dragged capital outlays and dampened overall budget spending growth, according to the DBM.
According to the latest national government disbursement report from the Department of Budget and Management (DBM), capital outlays and infrastructure expenditures declined by 43.5 percent to P147.8 billion in the first quarter, from P261.8 billion during the same period last year.
Government infrastructure spending fell for the third consecutive month, continuing its downward trend in 2025 amid the lingering effects of last year’s flood control controversy.
The DBM said the lower spending outturn “significantly dampened the overall spending growth for the period,” which rose by only 3.2 percent to P1.490 trillion from P1.444 trillion in the same period last year.
According to the DBM, one of the primary reasons behind the reduced spending was the flood control scandal, which prompted stricter validation and processing of billing claims to ensure payments correspond with actual project accomplishments.
“The adoption of a stricter validation process for billing claims to ensure project quality and value for money also continued to affect the department’s spending outturn,” the DBM said.
In March alone, infrastructure spending reportedly declined by 48 percent year-on-year to P59.1 billion from P113.5 billion, mainly due to weaker disbursement performance by the Department of Public Works and Highways.
“The decline was largely attributed to the lower disbursement performance of the Department of Public Works and Highways (DPWH) amid the ongoing completion of carry-over projects and implementation of the current year’s budget,” the DBM explained.
The DPWH’s spending reportedly began declining in July last year and further slowed as the government intensified its crackdown and investigation into the alleged graft scandal.
The government is now expecting infrastructure agencies to take advantage of the summer season to accelerate construction activities.
Relying on strategic fund releases and favorable weather conditions, the government aims to rebound in the second half of the year to help preserve its revised annual economic targets.
