By Justine Irish D. Tabile, Senior Reporter
INFRASTRUCTURE SPENDING plunged by an annual 35% in May amid strengthened review and validation processes, based on the Department of Budget and Management (DBM).
At the identical time, experts warned that prolonged government underspending could further weaken economic growth and urged the Marcos administration to overhaul infrastructure project implementation and stop anti-corruption efforts from stalling public spending.
In its latest National Government disbursement report, the DBM said infrastructure and other capital outlays fell by 35.3% to P80.1 billion in May from P123.8 billion in the identical month in 2025.
“The year-on-year decline primarily reflects the implementation of strengthened review, audit, and validation procedures for infrastructure payment claims, in addition to documentary compliance requirements for contractors,” the DBM said in an announcement.
“These enhanced safeguards have affected the timing of some infrastructure disbursements, particularly on Department of Public Works and Highways (DPWH) projects,” it added.
Month on month, infrastructure spending surged by 93.1% from P41.5 billion in April.
In the primary five months of the yr, infrastructure and other capital outlays slumped by 42.9% to P269.4 billion from P471.5 billion in the identical period a yr ago.
The DBM attributed the decline to the “implementation of enhanced governance measures and stricter review and validation procedures for infrastructure projects, following the federal government’s intensified efforts to strengthen accountability and make sure the prudent use of public funds.”
“These measures have affected the timing of some DPWH infrastructure disbursements while reinforcing safeguards for public spending,” it added.
Francisco Cid L. Terosa, an associate professor and former dean of the School of Economics of the University of Asia and the Pacific (UA&P), warned that weak infrastructure spending can have hurt economic growth within the second quarter.
“The continued weakness in infrastructure spending could cut second-quarter gross domestic product (GDP) growth by about 2 to three percentage points relative to second quarter of 2025 GDP growth,” he told BusinessWorld via Viber.
The Philippine Statistics Authority is about to release preliminary second-quarter GDP data on Aug. 7.
While spending may rebound as releases speed up, Mr. Terosa said “elevated energy prices plus tight financial conditions and high borrowing costs… could deflate the results of a spending rebound.”
“Infrastructure spending should grow by 10 to fifteen% on average for the remainder of the yr to satisfy the full-year growth goal of three.5 to 4.5%,” he added.
The Development Budget Coordination Committee projected the economy to grow by 3.5%-4.5% this yr, lower than its previous projection of 5%-6%.
OVERHAUL NEEDED
“The National Government may have to overhaul its execution processes on the implementation level to reduce leakages,” UA&P economist Marco Antonio C. Agonia said in an e-mail.
“There are already regulations in place supposedly to stop this stuff from happening, but when the ‘rules of the sport’ that implicitly create loopholes for local bid-rigging and weak oversight persist, further high-level reforms can have limited efficacy,” he added.
Mr. Agonia said the federal government should consider assigning budgets based on agencies’ absorptive capability as a substitute of politically motivated discretionary spending.
“The sweeping pause in infrastructure spending, while done to wipe the slate clean, also harmed economic growth prospects,” Mr. Agonia said.
Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the federal government must show that its campaign against corruption doesn’t must undermine growth.
“What is required is a system that quickly identifies and removes questionable projects while accelerating those which might be transparent, economically sound, and prepared for implementation,” he said in a Viber message.
Ser Percival K. Peña-Reyes, a senior research fellow on the Ateneo Center for Economic Research and Development, said the federal government should avoid treating anti-corruption and infrastructure spending as competing objectives.
He said tighter procurement oversight and investigations through the Aquino administration improved governance in some respects but in addition contributed to implementation delays, lower public spending and weaker economic growth during its early years.
“The lesson will not be that anti-corruption efforts needs to be relaxed, but that they need to be designed so that they don’t paralyze project execution,” Mr. Peña-Reyes said.
Infrastructure spending has one in every of the very best fiscal multipliers within the Philippine economy since it creates jobs, raises demand for domestic materials and improves long-term productivity, he said.
Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said accountability and infrastructure spending should go hand in hand.
“Secret’s to analyze anomalous projects while allowing legitimate, high-impact projects to proceed,” he said. “Good governance should improve, not delay, public investment.”
Mr. Peña-Reyes said persistent leakages despite reforms in budgeting, procurement and transparency show that the issue is not any longer primarily the absence of rules but weaknesses in implementation and institutions.
He said procurement reforms have made the system more rules-based, but multiple safeguards also can create bottlenecks when officials turn into overly cautious about making decisions.
“The result’s slower project implementation without necessarily eliminating opportunities for corruption,” he added.
Institutional capability also stays uneven across implementing agencies and native government units, Mr. Peña-Reyes said.
Corruption risks have also evolved beyond outright procurement fraud, with leakages occurring through inflated cost estimates, excessive variation orders, weak contract supervision and poor-quality implementation, he said.
Such practices are sometimes more difficult to detect because they might occur after contracts have been legally awarded.
Mr. Peña-Reyes said reforms should concentrate on professionalizing procurement and project management, expanding digital monitoring and ensuring accountability mechanisms operate quickly and predictably.
“The target needs to be a system that’s each clean and capable — one that forestalls leakages while still delivering infrastructure on time and supporting economic growth,” he said.
‘EVERY PESO MUST WORK HARDER’
Mr. Rivera said the federal government should ensure “every peso must deliver the best public value” amid limited fiscal space.
“Priority should go to productive investments corresponding to infrastructure, education, health, agriculture, and climate resilience while strengthening project evaluation, transparency, and monitoring to make sure value for money,” he added.
Mr. Ravelas said the federal government should prioritize clean and high-impact investments in infrastructure, flood control, food and energy security, logistics, and digital connectivity.
“At a time when global uncertainties, including tensions within the Middle East, are putting pressure on growth and monetary resources, every peso must work harder. The goal will not be simply to spend more or spend less, but to spend smarter, faster, and cleaner to sustain growth, create jobs, and strengthen public trust,” he added.
Mr. Agonia said the federal government should pursue longer-term, high-multiplier investments corresponding to infrastructure master plans and human capital programs while making budget documents transparent and simply accessible.
He said the federal government could also use the public-private partnership framework to tap financially and technically capable organizations to perform these projects.
“That is more pressing now that the Philippines may lose out on concessionary financing schemes with multilateral organizations following its ascension to upper-middle income country status,” he added.
TRANSPORT PROJECTS
The Marcos administration must also fast-track transport projects after years of delays.
“The administration cannot afford one other detour. The journey must end by rediscovering the strengths we once had,” Rene S. Santiago, a world consultant on transport development and former president of the Transportation Science Society of the Philippines, said in a Viber message.
Mr. Santiago urged the federal government to prioritize feasible transport projects, stressing the necessity to seize doable solutions that directly address mobility issues, like deploying electric buses.
Transportation Acting Secretary Giovanni Z. Lopez said the federal government is working to fast-track its projects to make sure the timely completion of transportation projects.
“The tunnel from Valenzuela to Quirino Avenue Station (of the Metro Manila Subway project) is now complete, in addition to the North Avenue to Tandang Sora station. Because of this we’re prioritizing big-ticket projects,” Mr. Lopez said in a Viber message.
The tunneling works for key sections of the Metro Manila Subway project has been accomplished, which advances its overall completion rate to 60%.
“We will expect the project’s completion by 2028. Before the tip of Mr. Marcos’ term, (two) stations from Valenzuela to Quirino may have an illustration run,” Mr. Lopez said.
Meanwhile, Institute for Climate and Sustainable Cities Urban Mobility Campaigns Officer Amber Garma said the Philippines must also concentrate on expanding energetic transport projects, and the upgrading of walkways within the country.
Ms. Garma urged the federal government to spice up funding for energetic transportation, saying higher investment is required to upgrade infrastructure and cushion commuters from rising fuel costs and price volatility. — with Ashley Erika O. Jose