Infrastructure spending declines in February

INFRASTRUCTURE SPENDING slumped by nearly 30% year on year in February amid delays in billing claims, the Department of Budget and Management (DBM) said.

In the National Government (NG) disbursement report released on Thursday, spending on infrastructure and other capital outlays fell by 29.2%, or P27.4 billion, to P66.4 billion in February from P93.8 billion in the same month in 2025.

Month on month, infrastructure spending nearly tripled from P22.3 billion in January.

For the first two months of the year, infrastructure spending plunged by 40.1% to P88.7 billion from P148.3 billion in the same period a year ago. This represents just 7% of the program this year.

Under the 2026 Budget of Expenditures and Sources of Financing, the Development Budget Coordination Committee (DBCC) projected spending on infrastructure and other capital outlays to reach P1.27 trillion in 2026. However, this excludes infrastructure subsidies and equities to government-owned and -controlled corporations as well as infrastructure transfers to local government units.

The DBM attributed the decline in the January-to-February period to delays in billing claims. It noted that most of the projects funded under last year’s budget are still ongoing, while the implementation of this year’s budget continues.

“It can also be noted that infrastructure disbursements during the first quarter of 2025 were relatively higher due to the frontloading of some expenditures and settlements of accounts payable ahead of the election ban during the time,” it added.

In the first two months, overall infrastructure disbursements dipped by 54.4% to P128.6 billion from P182.9 billion a year ago.

The DBCC earlier projected infrastructure disbursements to reach P1.558 trillion in 2026 or 5.1% of gross domestic product.

The DBM said it expects infrastructure disbursements to remain soft in the first half of the year, while spending could be driven by continuous implementation of a strict review and validation process for payment claims.

It said that disbursements will remain muted as “the base effects of large settlement of accounts payables in the first quarter last year persist, while the completion of projects carried over from the previous year is ongoing.”

“Nonetheless, the quality of infrastructure spending may benefit from the continuous implementation of a strict review and validation process for payment claims,” it added.

Last year, the country was rocked by a corruption scandal tied to flood control projects that implicated government officials, lawmakers, and contractors. This prompted the government to tighten monitoring of project implementation and completion status, but this caused delays.

As of end-February, the DBM said that the program balance amounted to P2.48 trillion or 36.5% of the total P6.79-trillion obligation program for the year.

The remaining balances consist largely of interest payments (P950 billion), agency-specific budgets (P915.2 billion), and special purpose funds (P577.5 billion).

“The bulk of the unreleased allotments of agency-specific budgets pertain to the infrastructure projects of the Department of Public Works and Highways, which shall be released through the issuance of a Special Allotment Release Order,” it added.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the decline in infrastructure spending reflects the government’s cautious spending “to at least prevent corruption.”

In the coming months, he expects the government to catch up on spending amid reforms in governance standards “that would help improve investor confidence.”

However, Mr. Ricafort warned that higher prices and inflation could push up the cost of various government projects, which “could be a drag, widen the budget deficit and increase the debt stock.” — Justine Irish D. Tabile