PHILIPPINE INFRASTRUCTURE SPENDING fell for a 3rd straight month in September, as public works projects continued to undergo tight scrutiny amid a corruption scandal, the Department of Budget and Management (DBM) said.
In its latest disbursement report on Sunday, the DBM said expenditures on infrastructure and other capital outlays declined by 42.6% to P78.7 billion in September from P137.1 billion in the identical month last yr.
Month on month, it slipped by 7.2% from P84.9 billion in August. This marked the third consecutive decline in infrastructure spending for the reason that 31.6% contraction in July.
“The spending performance of the Department of Public Works and Highways (DPWH) continued to register negative growth rate for the third straight month since July 2025,” the DBM said.
President Ferdinand R. Marcos, Jr. had flagged anomalous flood control projects during his State of the Nation Address in late July. This sparked several investigations into alleged corruption involving lawmakers, government officials, and personal contractors.
The DBM attributed the sharp drop in infrastructure spending in September to the delays or non-submission of billings by contractors because the DPWH offices reviewed the implementation and completion of projects across the country. This affected the processing of payment claims and actual disbursements by the DPWH, it added.
“Heightened scrutiny from oversight agencies, comparable to the Office of the Ombudsman, the Commission on Audit, the Bureau of Internal Revenue, and the Department of Budget and Management, (which) resulted in additional conservative and cautious processing of payment claims,” it said.
The DBM said there was also a freeze order on some bank accounts of DPWH implementing offices, which were under investigation.
Bad weather in September also hampered the implementation of projects, it added.
“Nevertheless, payments for the local counterpart of foreign-assisted projects of the Department of Transportation and the RAFPMP (Revised Armed Forces of the Philippines Modernization Program) of the DND (Department of National Defense) partially tempered the decline in infrastructure disbursements,” the Budget department said.
Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message that “tighter ropes on public spending” can have contributed to the drop in infrastructure spending in September.
Rizal Business Banking Corp. Chief Economist Michael L. Ricafort attributed the sharp year-on-year decline in infrastructure spending to the federal government’s implementation of anti-corruption measures amid the anomalous flood control projects.
“Among the funding for which (were) redeployed to other social spending comparable to for the Department of Social Welfare and Development (DSWD), Department of Agriculture amongst others,” he said in a Viber message.
Mr. Ricafort also noted weather-related disruptions, comparable to typhoons and earthquakes, reduced the variety of business days in September.
NINE-MONTH PERIOD
For the January-to-September period, the general infrastructure and capital outlay disbursements stood at P877.1 billion, down 10.7% from P982.4 billion a yr ago. This accounted for 87.4% of the P1.0036‑trillion full‑yr program.
“(This) was largely resulting from the lower spending performance of the DPWH. This followed the stricter validation of the status of implementation, quality, and completion of infrastructure projects nationwide amid corruption issues,” the DBM said.
Within the third quarter alone, disbursements fell by 30.7% to P256.9 billion from P370.6 billion in the identical period in 2024. This was P125.7 billion lower than the P382.6‑billion program for the July-to-September period.
Data from the DBM showed overall infrastructure disbursements, which include infrastructure components of subsidy and equity to government corporations and transfers to local government units, slipped by 8.6% to P1.04 trillion within the end-September period from P1.14 billion a yr ago.
The Budget department said the drop in DPWH disbursements shaved off 1.3 percentage points within the third‑quarter 2025 gross domestic product (GDP) growth.
The Philippine economy grew by 4% within the third quarter, the slowest growth seen in over 4 years or for the reason that first quarter of 2021.
This brought the nine-month tally to five%, falling wanting the federal government’s 5.5% to six.5% goal.
Economic managers have insisted the spending slump will likely be temporary as reforms and investigations are underway.
Nevertheless, analysts have warned the drag on economic growth could persist until 2026 unless the federal government pushes for governance reforms and people behind anomalous flood mitigation projects are jailed.
Mr. Erece said spending may remain subdued within the near future.
“It’s difficult to say whether an improvement could be expected next yr given the decline in public trust and slow approval of next yr’s budget as they closely scrutinize every allocation, especially on infrastructure,” he said.
During plenary debates on the 2026 budget, Senator Sherwin T. Gatchalian said infrastructure spending is predicted to succeed in just 4.7% of GDP in 2026, down from the federal government’s 5.1% goal amid a corruption probe.
Mr. Ricafort said the recovery in infrastructure spending would depend upon governance reforms.
“Kung walang risk of corruption, tuloy ang infrastructure spending (If there isn’t a risk of corruption, infrastructure spending will proceed),” he said.
Meanwhile, the DBM said capital outlays are expected to partially normalize toward yearend as most public works resume.
“Capital expenditures are expected to partially normalize towards the tip of the yr with the implementation of most public works by the DPWH will resume before the yr ends as governance measures and safeguards against corruption are put in place,” it said.
DPWH Secretary Vivencio “Vince” B. Dizon lifted on Sept. 16 the suspension of procurement for locally funded civil works, because the agency laid out stricter compliance rules.
These include livestreaming of bidding, geotagging of projects, and conduct of road and bridge information application validation.
Other measures cover encoding and verification of project data within the Project and Contract Management Application and Civil Works Application, a ban on contract splitting, and tighter reviews of bidders’ financial capability under procurement law.
The DBM earlier said the federal government is banking on the discharge of P1.307 trillion in programmed spending within the fourth quarter to spice up growth, with most funds earmarked for social services. — Aubrey Rose A. Inosante