DBM: Infrastructure spending still down 36 percent

Infrastructure spending remained sharply below year-ago levels in the first seven months of 2026, with the government’s July outlays showing only a marginal improvement from the steep shortfall recorded a month earlier, according to the Department of Budget and Management (DBM).

In its latest National Government Disbursement Performance report, the DBM said infrastructure and other capital outlays reached P89.6 billion in July, down P3.7 billion, or roughly 4 percent, from P93.3 billion a year earlier.

While the gap narrowed significantly from the 40.8-percent decline recorded in June, the improvement came against a much deeper year-to-date shortfall. Infrastructure and other capital outlays totaled P457.0 billion from January to July, down P256.5 billion, or 36 percent, from the same period last year.

“The lower level reflected, among others, lower DPWH disbursements amid strengthened procurement compliance, monitoring of ongoing projects, and review and validation of payment claims and contractor documentation. These processes are intended to ensure that payments are supported by properly verified and documented infrastructure works,” the DBM said.

The weak spending comes as the Marcos administration has vowed to ramp up public infrastructure investment to stimulate economic activity. Economic growth slowed to 2.3 percent in the second quarter, with economists citing, among other factors, persistent delays in government infrastructure spending and investment, which has come under heightened scrutiny following last year’s flood control scandal.

Gross domestic product (GDP) growth has now slowed for four consecutive quarters since President Ferdinand R. Marcos Jr. brought anomalous flood control projects into public attention during his State of the Nation Address last year.

In August, Marcos said government spending was “on track” and expressed confidence that the government would meet its target by the end of 2026.

“[I][n terms of public spending, we are pretty much [on track] in terms of our scheduling. And we will be, I am confident we will be able to catch up and exceed the year-on-year public spending by the last quarter of this year,” the Chief Executive said.

Despite the overall weakness, the DBM said infrastructure implementation during the first seven months continued across key sectors, including defense modernization under the DND’s RAFPMP, rail and mass transport systems under the DOTr, and social and agricultural infrastructure such as school buildings and facilities and farm equipment and machinery.

The Asian Development Bank, among other multilateral institutions, has meanwhile downgraded its GDP forecasts for this year and 2027, citing the persistent slowdown in government infrastructure spending alongside adverse spillover effects from the global oil shock.

“We've already seen indications of more government outlays for infrastructure projects, including large transportation projects.So I know there's an intent to rebound public investment and get it back on track as compared to what happened the second half of last year,” said ADB country director for the Philippines Andrew Jeffries.

The DBM said in June that the recovery in infrastructure spending in the second half could be driven by additional operating requirements of the DPWH for infrastructure projects nationwide, releases for Basic Education Facilities of the DepEd, Farm-to-Market Road projects of the DA, and various capital outlay projects under the Revised AFP Modernization Program of the DND.

The settlement of accounts payable by the DOTr for foreign-assisted rail transport projects could also accelerate infrastructure spending in the remaining months of the year.