By Justine Irish D. Tabile, Senior Reporter
INFRASTRUCTURE SPENDING slumped by 48% 12 months on 12 months in March on account of lower disbursements and tighter processes within the wake of a corruption scandal involving government projects.
In its latest National Government (NG) disbursement report, the Department of Budget and Management (DBM) said spending on infrastructure and other capital outlays fell to P59.1 billion in March from P113.5 billion in the identical month in 2025.
Month on month, infrastructure spending also declined by 11.1% from P66.4 billion in February.
“The decline was largely attributed to the lower disbursement performance of the Department of Public Works and Highways (DPWH) amid the continued completion of carry-over projects and implementation of the present 12 months’s budget,” the DBM said.
“The adoption of stricter validation process for billing claims to make sure project quality and value for money also continued to affect the department’s spending outturn.”
Nonetheless, the implementation of capital outlay projects under the Revised Armed Forces of the Philippines Modernization Program of the Department of National Defense helped temper the spending decline in March, it said.
For the primary quarter, infrastructure spending plunged by 43.5% to P147.8 billion from P261.8 billion a 12 months ago. This accounted for just 11.6% of the federal government’s full-year program.
Under the 2026 Budget of Expenditures and Sources of Financing, NG money disbursements for infrastructure and other capital outlays are expected to achieve P1.27 trillion this 12 months. This excludes infrastructure subsidies and equities to government-owned and -controlled corporations in addition to infrastructure transfers to local government units.
The DBM attributed the first-quarter decline to base effects from the frontloading of projects ahead of the election ban seen in the course of the same period in 2025, the continued completion of prior-year obligations, and stricter validation and processing of billing claims.
It said it expects infrastructure spending to select up within the second quarter as agencies begin obligating funds from allotments released in earlier months.
“Infrastructure departments are, likewise, expected to reap the benefits of the summer season to expedite construction activities,” it said.
“This may hopefully construct up spending momentum and help the recovery of infrastructure spending towards the second half of the 12 months.”
CORRUPTION MESS
Slower infrastructure spending early this 12 months reflects unresolved governance issues and the increasingly corruption-driven nature of the Philippine growth model, said Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation.
“The infrastructure spending slowdown is a direct results of the bureaucratic chilling effect of the flood control and pork barrel corruption scandals last 12 months,” he said in a Viber message.
“Agencies and lawmakers, who shouldn’t actually have a role in spending decisions, are way more cautious out of fear of heightened scrutiny over procurement, project quality, and contractor relationships.”
The country was embroiled in a corruption scandal last 12 months linking government officials, lawmakers, and contractors to substandard or nonexistent flood control projects. The controversy slowed government spending and dampened investor and consumer sentiment, which was reflected within the below-target gross domestic product (GDP) growth figures recorded starting within the second half of 2025.
The slump has endured as lingering effects of the graft mess were compounded by soaring oil prices on account of the Middle East war, causing the economy to expand by just 2.8% in the primary quarter. This was slower than the 5.4% growth in the identical quarter last 12 months and three% within the fourth quarter of 2025.
Mr. Africa added that “rising political temperature” could also be contributing to project implementation delays because the administration may very well be using its control over infrastructure budgets to paralyze its political opposition.
“This corruption- and patronage-driven distortion of the budget process can be being aggravated by fiscal pressures rapidly bubbling to the surface,” he said. “NG debt has already risen to 65.2% of GDP in the primary quarter of the 12 months, which is approaching the best in 20 years, when it hit 65.7% in 2005.”
Still, Mr. Africa said he expects spending to rebound this second quarter.
“Nonetheless, there’s little reason to expect that infrastructure spending shall be strong or sustainable enough to substantially boost aggregate growth, which has been in structural slowdown since 2017.”
The federal government might also be forced to reallocate its resources towards fuel subsidies and other social assistance to answer the oil shock, he added.
“In that case, infrastructure spending could also be squeezed not only by corruption-related paralysis but in addition by a reprioritization under emerging conditions of geopolitical and oil market instability.”
Ser Percival K. Peña-Reyes, a senior research fellow on the Ateneo Center for Economic Research and Development, said the sharp decline in infrastructure disbursements may very well be attributed to base effects, project completion timing, and implementation delays.
“The outlook for Philippine infrastructure spending within the second quarter of 2026 is for a gradual recovery, but still relatively weak overall,” he said via Facebook Messenger.
“Economists generally expect a stronger pickup within the second half of 2026, moderately than a direct rebound within the second quarter. It’s because governance reforms and tighter anti-corruption controls following the flood control controversy have slowed project approvals and payments.”
Nonetheless, if spending doesn’t rebound, this might weigh on the economy’s prospects as public construction is among the many country’s key growth drivers.
“Economists have warned that if infrastructure disbursements remain depressed through the second quarter, quarterly GDP growth could undershoot the federal government goal, unless consumption and exports compensate for the weakness,” he said.
“At the identical time, some analysts note that stricter project screening and anti-corruption checks may temporarily slow growth but could improve spending efficiency and project quality over the long run.”