BUDGET authorities expect infrastructure spending to accelerate after a first-quarter contraction dampened overall disbursements.Agencies are expected to take advantage of the summer season to expedite project implementation, the Department of Budget and Management (DBM) said.“The implementation of various capital outlay projects is seen to pick up this second quarter following the release of allotments in the earlier months, particularly in March, thereby enabling line agencies to conduct bidding activities and obligate funds,” the department said in its latest disbursement report.“This will hopefully build up spending momentum and help the recovery of infrastructure spending towards the second half of the year.”Infrastructure and other capital outlays continued to contract during the first three months of the year, tempering overall spending growth despite increased subsidies and transfers to local governments, among others.Officials had pledged to ramp up spending in the first quarter after a massive flood control project scandal weighed on government spending and pulled down economic growth last year.In March alone, infrastructure and other capital outlays plunged by 48 percent to P59.1 billion from P113.5 billion a year earlier, the lowest since November 2025’s P48 billion.The DBM attributed the decline to the Department of Public Works and Highways’ (DPWH) lower disbursement performance “amid ongoing completion of carry-over projects and the implementation of the current year’s budget.”“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,” it added.The DBM noted that capital outlay projects under the Revised Armed Forces of the Philippines (AFP) Modernization Program had helped temper the decline in infrastructure spending.First-quarter infrastructure and other capital outlays were also markedly lower at P147.8 billion, down 43.5 percent from P261.8 billion a year earlier.
Infrastructure disbursements in particular dropped by 25.6 percent to P236.1 billion from P317.5 billion.Overall disbursements grew by 5.2 percent in March to P654.8 billion from P622.2 billion a year earlier, primarily due to a 97.8-percent surge in capital transfers to local government units (LGUs) totaling P50.6 billion from P25.6 billion.The first-quarter tally of P1.49 trillion was 3.2 percent higher than the year-earlier P1.44 trillion, again propped up by markedly higher capital transfers to LGUs (62.5 percent to P104.4 billion from P64.2 billion).Spending growth for the period, the DBM said, was dampened by infrastructure and capital expenditures that were affected by base effects, including frontloading in 2025 ahead of an election ban, the ongoing completion of prior-year obligations and strict validation and processing of billing claims.Allotment releases as of end-March, meanwhile, totaled P4.63 trillion or 68.1 percent of the P6.79-trillion obligation program for 2026.Some P137 billion was released in March alone, P44.9 billion in particular for Department of Transportation projects such as the North-South Commuter Railway System and Metro Manila Subway Project, as well as P23.5 billion for the AFP modernization program.Another P361.9 billion was issued in April, of which P72.1 billion was allotted for DPWH capital outlay projects.Economic growth slowed to 4.4 percent in 2025, falling below the government’s 5.5- to 6.5-percent target, following a sharp slowdown to 3.0 percent in the last three months of the year.Growth in the first three months of 2026 was a slower 2.8 percent, also well below the 5.0- to 6.0-percent goal and blamed by the government on the impact of the war in the Middle East and the lingering effect of last year’s corruption scandal.
infrastructure spending, DBM, budget, Philippines, economy, capital outlay, DPWH