Government infrastracture spending falls below program in 2025

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April 10, 2026 | 12:00am

MANILA, Philippines — The government slashed its infrastructure spending to P1.10 trillion last year, below its programmed allocation as the graft-tainted flood control projects choked off disbursements of the Department of Public Works and Highways (DPWH).

Data from the Department of Budget and Management (DBM) showed that infrastructure disbursements plunged by 17.3 percent to P1.10 trillion last year from P1.33 trillion in 2024.

It was also 18.8 percent lower than the P1.35 trillion program set by the Development Budget Coordination Committee.

“Infrastructure spending declined significantly during the second half of 2025 following the ongoing probe on the flood control projects of the DPWH,” the DBM said.

For December alone, public works disbursements declined by 27.9 percent to P105.8 billion, marking the sixth consecutive yearly contraction recorded since July.

“Aside from the delays and slowdown in payments caused by tighter controls in the wake of flood control corruption issues, adverse weather conditions, particularly in the earlier part of the fourth quarter, also hampered the implementation of some projects of the DPWH,” the DBM said.

It added that the fund releases to the Revised Armed Forces of the Philippines of the Department of National Defense, as well as payments made for building construction, tempered the contraction.

Direct payments made by development partners for foreign-assisted projects, such as the Manggahan Floodway Bridges Construction Project, the Laguna Lakeshore Road Network and the North-South Commuter Railway Project of the Department of Transportation, helped temper the decline.

For 2025, overall infrastructure disbursements, which also account for the infrastructure components of transfers to local government units as well as subsidies and equity to state-run corporations, plunged to P1.32 trillion.

“The total infrastructure spending in 2025 was equivalent to 4.7 percent of GDP (gross domestic product)  vis-à-vis the 5.3 percent target and 5.8 percent outturn in 2024,” it said.

For 2026, the government lowered its infrastructure spending target to 4.3 percent of the GDP or P1.3 trillion from 5.1 percent or P1.56 trillion previously.

DBM data showed that total government disbursements reached P6.03 trillion for 2025, down by 1.8 percent from P5.93 trillion in 2024.

Against the P6.08 trillion program for 2025, actual disbursements were lower by 0.9 percent, mainly on account of the weaker infrastructure and other capital outlays.

“The underperformance resulted from the stricter verification of infrastructure projects and validation of payments by the DPWH because of the corruption issues, while adverse weather conditions in 2025 also affected the implementation and completion of other infrastructure activities,” the DBM said.

Infrastructure spending accounted for 18.2 percent of the overall government disbursements in 2025.

Under the 2025 total disbursements, personnel services expenditures went up by 6.6 percent to P1.63 trillion due to the implementation of the second tranche of compensation adjustments of qualified civilian government employees and creation and filling of positions in various agencies.

The government also recorded higher maintenance and other operating expenses of P1.13 trillion amid the higher teaching allowance for public school teachers, payments for the Aircraft Maintenance Fund, and the purchase of petroleum, oil and lubricants of the defense agency and the implementation of programs of universal tertiary education.

Allotment to local government rose by 18 percent to P901.3 billion, mainly due to higher National Tax Allotment shares of local government units and Annual Block Grant to the Bangsamoro Autonomous Region in Muslim Mindanao.

Interest payments, likewise, increased by 13.2 percent to P864.1 billion.