TIGHTER procurement compliance and project monitoring following last week’s massive flood control project scandal has continued to weigh on government spending, with infrastructure and other capital outlays down sharply in the first seven months of 2026.
Data from the Department of Budget and Management (DBM) showed that infrastructure and other capital outlays declined by 36 percent to P457 billion in January to July from P713.5 billion in the same period last year.
“The lower level reflected, among others, lower DPWH (Department of Public Works and Highways) disbursements amid strengthened procurement compliance, monitoring of ongoing projects, and review and validation of payment claims and contractor documentation,” the DBM said.
“These processes are intended to ensure that payments are supported by properly verified and documented infrastructure works,” it added.
Total capital outlays fell 22.7 percent to P663.3 billion in January-July from P858 billion a year earlier.
Capital transfers to local government units, however, increased by 42.8 percent to P204.9 billion from P143.5 billion a year earlier.
Despite the decline in infrastructure and other capital outlays, the DBM said project and program implementation continued across key sectors.
These included defense modernization under the Department of National Defense, rail and mass transport projects under the Department of Transportation, as well as school facilities and agricultural infrastructure.
In July alone, infrastructure and other capital outlays slipped 4.0 percent to P89.6 billion from P93.3 billion.
The July decline was partly offset by capital spending in other areas, including the implementation of projects under the defense modernization program and the rural development projects of the Department of Agriculture, as well as the settlement of accounts payable for various rail transport projects of the Department of Transportation.
The DBM said these helped moderate the overall decline.
As of July 31, the DBM had released P6.182 trillion in allotments, equivalent to 91 percent of the P6.793-trillion full-year obligation program. This left P611 billion, or nine percent, of the obligation program unreleased.
The DBM has proposed P1.467 trillion for infrastructure development under the 2027 national budget, equivalent to 4.4 percent of gross domestic product and 13.8 percent higher than the 2026 level.
