THE cost of government infrastructure projects will rise significantly as the war in the Middle East drives up oil prices worldwide, the Department of Public Works and Highways (DPWH) said Wednesday.
Public Works Secretary Vince Dizon said on Wednesday the rising oil prices would have an inevitable domino effect on construction, because almost everything from equipment to materials is dependent on fuel.
“Our projects that need to be completed — such as roads, bridges and other infrastructure — are highly dependent on fuel, especially for operating heavy equipment,” Dizon said.
“Higher oil prices could also increase the cost of essential construction materials such as steel, cement and asphalt, which are often affected by fluctuations in global energy prices and transportation costs,” he added.
Crude oil prices have climbed to about $120 per barrel, driving up the cost of gasoline, diesel and kerosene in recent days.
Despite the possible cost pressures, Dizon assured the public that the government has mechanisms in place to manage price increases and ensure that infrastructure projects continue without major disruptions.
He said infrastructure contracts already include price escalation clauses and variation orders, which allow project costs to be adjusted when there are unexpected increases in the prices of fuel or construction materials.
“Prices can be adjusted or variation orders can be issued when implementing new projects this 2026,” Dizon said, but added that such measures must be applied properly and should not be abused.
Under his watch, Dizon said, the DPWH will implement only quality projects, using the right specifications of materials at the right price, he said.
“That’s possible — the price can be right, it can be fast, it can be quality,” Dizon said.
President Ferdinand Marcos Jr. has directed government agencies to continue pursuing infrastructure development despite global economic uncertainties and geopolitical tensions, he said.
The DPWH is also processing payments to contractors for completed project milestones even stressed that the release of funds depends on cash allocations from the Department of Budget and Management (DBM).
Dizon said only about half of the expected payments for some projects have been released during the first quarter of the year as the agency awaits additional cash releases from the DBM.
But Dizon assured contractors that once the funds are released and project accomplishments are verified, payments will proceed without delay.
