<\/p>\n
By Justine Irish D. Tabile, <\/b>Senior Reporter <\/i><\/p>\n
INFRASTRUCTURE SPENDING <\/span>plunged by an annual 35% in May amid strengthened review and validation <\/span>processes, based on the Department of Budget and Management (DBM).<\/p>\n 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.<\/span><\/p>\n 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.<\/p>\n \u201cThe 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,\u201d the DBM said in an announcement.<\/p>\n \u201cThese enhanced safeguards have affected the timing of some infrastructure disbursements, particularly on Department of Public Works and Highways (DPWH) projects,\u201d it added.<\/p>\n Month on month, infrastructure spending surged by 93.1% from P41.5 billion in April.<\/p>\n 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.<\/span><\/p>\n The DBM attributed the decline to the \u201cimplementation of enhanced governance measures and stricter review and validation procedures for infrastructure projects, following the federal government\u2019s intensified efforts to strengthen accountability and make sure the prudent use of public funds.\u201d<\/p>\n \u201cThese measures have affected the timing of some DPWH infrastructure disbursements while reinforcing safeguards for public spending,\u201d it added.<\/p>\n 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 <\/span>economic growth within the second quarter. <\/span><\/p>\n \u201cThe 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,\u201d he told BusinessWorld<\/i> via Viber.<\/span><\/p>\n The Philippine Statistics Authority is about to release preliminary second-quarter GDP data on Aug. 7.<\/p>\n While spending may rebound as releases speed up, Mr. Terosa said \u201celevated energy prices plus tight financial conditions and high borrowing costs\u2026 could deflate the results of a spending rebound.\u201d<\/p>\n \u201cInfrastructure 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%,\u201d he added.<\/p>\n 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%.<\/p>\n OVERHAUL NEEDED \u201cThere are already regulations in place supposedly to stop this stuff from happening, but when the \u2018rules of the sport\u2019 that implicitly create loopholes for local bid-rigging and weak oversight persist, further high-level reforms can have limited eff<\/span>icacy,\u201d he added.<\/p>\n Mr. Agonia said the federal government should consider assigning budgets based on agencies\u2019 absorptive capability as a substitute of politically motivated discretionary spending.<\/p>\n \u201cThe sweeping pause in infrastructure spending, while done to wipe the slate clean, also harmed economic growth prospects,\u201d Mr. Agonia said.<\/p>\n 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.<\/p>\n \u201cWhat 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,\u201d he said in a Viber message.<\/p>\n Ser Percival K. Pe\u00f1a-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.<\/p>\n 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.<\/p>\n \u201cThe 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,\u201d Mr. Pe\u00f1a-Reyes said.<\/p>\n 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.<\/p>\n Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said accountability and infrastructure spending should go hand in hand.<\/p>\n \u201cSecret’s to analyze anomalous projects while allowing legitimate, high-impact projects to proceed,\u201d he said. \u201cGood governance should improve, not delay, public investment.\u201d<\/p>\n Mr. Pe\u00f1a-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.<\/p>\n He said procurement reforms have made the system more rules-based, but multiple safeguards also can create bottlenecks when off<\/span>icials turn into overly cautious about making decisions.<\/p>\n \u201cThe result’s slower project implementation without necessarily eliminating opportunities for corruption,\u201d he added.<\/p>\n Institutional capability also stays uneven across implementing agencies and native government units, Mr. Pe\u00f1a-Reyes said.<\/p>\n 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.<\/p>\n Such practices are sometimes more diff<\/span>icult to detect because they might occur after contracts have been legally awarded.<\/p>\n Mr. Pe\u00f1a-Reyes said reforms should concentrate on professionalizing procurement and project management, expanding digital monitoring and ensuring accountability mechanisms operate quickly and predictably.<\/p>\n \u201cThe target needs to be a system that’s each clean and capable \u2014 one that forestalls leakages while still delivering infrastructure on time and supporting economic growth,\u201d he said.<\/p>\n \u2018EVERY PESO MUST WORK HARDER\u2019 \u201cPriority 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,\u201d he added.<\/p>\n 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.<\/p>\n \u201cAt 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,\u201d he added.<\/p>\n 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.<\/p>\n He said the federal government could also use the public-private partnership framework to tap financially and technically capable organizations to perform these projects.<\/p>\n \u201cThat 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,\u201d he added.<\/p>\n TRANSPORT PROJECTS \u201cThe administration cannot afford one other detour. The journey must end by rediscovering the strengths we once had,\u201d 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.<\/p>\n 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.<\/p>\n 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.<\/p>\n \u201cThe 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,\u201d Mr. Lopez said in a Viber message.<\/p>\n The tunneling works for key sections of the Metro Manila Subway project has been accomplished, which advances its overall completion rate to 60%.<\/p>\n \u201cWe will expect the project\u2019s completion by 2028. Before the tip of Mr. Marcos\u2019 term, (two) stations from Valenzuela to Quirino may have an illustration run,\u201d Mr. Lopez said.<\/p>\n Meanwhile, Institute for Climate and Sustainable Cities Urban Mobility Campaigns Off<\/span>icer Amber Garma said the Philippines must also concentrate on expanding energetic transport projects, and the upgrading of walkways within the country.<\/p>\n 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. \u2014 with<\/i> Ashley Erika O. Jose<\/b><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" WORKERS complete a pedestrian overpass in Quezon City on this file photo. \u2014 PHILIPPINE STAR\/MIGUEL DE GUZMAN 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 […]<\/p>\n","protected":false},"author":1,"featured_media":372418,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[8118,5298,4139],"class_list":["post-372417","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-falls","tag-infrastructure","tag-spending"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t
<\/b>\u201cThe National Government may have to overhaul its execution processes on the implementation level to reduce leakages,\u201d UA&P economist Marco Antonio C. Agonia said in an e-mail.<\/p>\n
<\/b>Mr. Rivera said the federal government should ensure \u201cevery peso must deliver the best public value\u201d amid limited fiscal space.<\/p>\n
<\/b>The Marcos administration must also fast-track transport projects after years of delays.<\/p>\n