Presidential Legislative Officer and Secretary Joey Sarte Salceda warned on Sunday that declining bank credit to legitimate contractors could undermine gains from infrastructure reforms directed by President Ferdinand R. Marcos Jr. and implemented by Department of Public Works and Highways Secretary Vince Dizon.

“President Marcos directed a comprehensive cleanup of the public works system, and Secretary Dizon has acted decisively against ghost projects, substandard work and unqualified contractors. The latest DPWH reports indicate improvements in several important categories,” Salceda said in a statement Sunday.

Salceda based his assessment on the DPWH’s Quarterly Physical Report of Operations, which showed that the fourth-quarter rate of bridge projects completed in accordance with plans and specifications increased from 79 percent in 2024 to 97 percent in 2025.

The comparable rate for network-development projects improved from 78 percent to 82 percent, while projects under the Convergence and Special Support Program rose from 74 percent to 80 percent.

“The direction of the President’s reforms is correct. We are beginning to distinguish legitimate contractors that can deliver from contractors that should never have received public projects in the first place,” Salceda said.

However, he cautioned that the construction sector is facing a tightening of bank credit.

Bangko Sentral ng Pilipinas data showed that outstanding construction loans declined from P591.6 billion in December 2024 to P477.5 billion in June 2026, a 19.3 percent reduction.

Losses mount

Construction lending fell 12.8 percent year-on-year as of June 2026, even as total bank lending for production activities grew 9.1 percent.

“Some legitimate contractors report that bank facilities which previously covered the full or nearly full contract price are now being approved at substantially lower coverage,” Salceda said.

“If a qualified contractor cannot borrow enough to mobilize equipment, purchase materials and begin construction, project completion rates will eventually suffer,” he added.

He said the government must adopt a broad, all-of-government response involving the DPWH, Department of Finance, BSP, Development Bank of the Philippines, Land Bank of the Philippines (LandBank), Philippine Guarantee Corp. and the construction industry.

“The President has already addressed procurement, contractor performance and project monitoring. We must now address the financing side. The government cannot clean up the contractor pool and then leave the legitimate contractors without sufficient working capital,” he said.

Salceda said the Development Bank of the Philippines and Land Bank have a crucial role as state financial institutions.

He proposed the expansion and updating of DBP’s Infrastructure Contractor Support Program and LandBank’s contractor-financing facilities, with faster processing for contractors covered by DPWH’s proposed green lane.