GOVERNMENT infrastructure spending remained weak in the first eight months of 2026, as tighter oversight of public works projects and delays in project implementation continued to weigh on disbursements.
Data from the Department and Budget and Management (DBM) showed that infrastructure and other capital outlays alone dropped by 34.6 percent to P522 billion from P798.4 billion in the first eight months of 2025.
Budget authorities attributed the contraction largely to lower disbursements of the Department of Public Works and Highways amid tighter compliance and monitoring requirements for infrastructure projects.
“These efforts are intended to safeguard the integrity of public infrastructure expenditures by ensuring that payments correspond to properly validated and documented works,” the DBM said.
To recall, budget authorities began monitoring infrastructure projects following the corruption scandal exposed last year, which weighed on economic growth, slowing the country’s gross domestic product (GDP) expansion to 4.4 percent.
Total capital outlays also declined by 22.4 percent to P753 billion from P970.9 billion, reflecting the substantial reduction in infrastructure and other capital spending.
Infrastructure disbursements also fell to P719.2 billion from P940.1 billion in January to August 2025.
Despite the continued decline, the DBM said “infrastructure spending was supported by the continued project implementation and construction of other public infrastructure, such as school facilities, hospitals, and farm-to-market roads.”
“Defense modernization projects of Department of National Defense and rail and mass transport projects of Department of Transportation also moderate the decline in infrastructure disbursements during the period,” it added.
For August alone, infrastructure and other capital outlays declined by 16.9 percent to P70.5 billion in August from P84.9 billion a year earlier.
The DBM said DPWH disbursements were affected by ongoing bidding for some projects, while most projects remained under implementation. It also reported that P10 billion in checks issued to contractors and suppliers had yet to be encashed.
“Adverse weather conditions in August — particularly flooding across parts of Luzon — also slowed construction activities for road infrastructure and rail transport project,” the DBM said.
Total capital outlays also declined by 15.6 percent to P95.2 billion from P112.9 billion a year earlier.
Capital transfers to LGUs likewise fell by 12.2 percent to P24.5 billion from P27.9 billion due to schedule for releasing local governments’ special shares in national tax proceeds.
As of end-August, budget authorities released P6.392 trillion in allotments, equivalent to 94.1 percent of the P6.793-trillion full-year obligation program.
About P401.4 billion, or 5.9 percent of the program, remained available for release. These allocations required additional information, supporting documents or other conditions and approvals before funds could be released.
In September, the DBM issued P121.8 billion in additional allotments covering personnel services, capital outlays and programs in education, health, social protection, transportation, agriculture, local government support and defense modernization.
These releases were expected to support government operations and service delivery for the remainder of the year, including disaster relief, assistance to local governments and measures intended to mitigate the impact of the Middle East conflict.
The DBM also said general operating expenditures, including mandatory personnel benefits for qualified government employees, the 2024 Performance-Based Bonus and the 2026 year-end bonus and cash gift, would contribute to higher government spending in the remaining months of the year.
