Infrastructure spending plunges 40% in January-February

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May 2, 2026 | 12:00am

MANILA, Philippines —  The Marcos administration’s infrastructure spending has extended its decline into the first two months of 2026 amid delays in billing claims, the Department of Budget and Management said.

Latest data from the DBM showed that state infrastructure expenditure and other capital outlays dropped by 40.1 percent to P88.7 billion from January to February, compared to P148.3 billion in the same period last year.

The DBM attributed this to the significant decline in infrastructure and other capital outlays, as well as to lower tax expenditures and subsidies.

The agency said this came as “completion of most projects from last year’s budget is still ongoing, while the implementation of the current year’s budget is also underway, which affected the turnaround for progress billing claims.”

In 2025, corruption over irregularities in the Department of Public Works and Highways (DPWH)’s flood-mitigation projects led to a slowdown in government infrastructure spending to P1.1 trillion, below the P1.35?trillion program.

In addition, the DBM cited that spending in the first quarter of 2025 was relatively higher due to the frontloading of expenditures and settlements of accounts payable ahead of the election ban.

Infrastructure disbursement, which also accounts for the infrastructure components of transfers to local government units as well as subsidies and equity to state-run corporations, plunged to P128.6 billion.

Meanwhile, overall government spending for the two-month period affected by unintended delays last year stood at P836 billion, up by 1.7 percent from P822 billion a year ago.

The DBM said state infrastructure spending is likely to stay “soft” through the first half of the year, “as the base effects of large settlement of accounts payables in the first quarter of last year persist and while the completion of projects carried over from the previous year is ongoing.”

However, authorities said the quality of infrastructure spending may benefit from the continued implementation of a tighter review and validation process for payment claims, closer monitoring of project execution and the faster rollout of projects affected by unintended delays in 2025.

In addition, the DBM said the program balance stood at P2.48 trillion as of February out of this year’s P6.79 trillion national budget.

The remaining funds mainly comprise of P950 billion for interest payments, P915.2 billion for agency budgets and P577.5 billion for Special Purpose Funds.

Despite this, the DBM said that P238 billion in funds would support spending for the following months to finance the government’s response, to mitigate  the adverse impact of the Middle East war.
Transfers for the local government units’ special shares in the proceeds of national taxes (tobacco excise) and additional assistance through the local government support fund could also boost spending.