Infrastructure spending declines in July amid weak DPWH disbursements

Government infrastructure spending declined by 25% in July, weighed down by sluggish disbursements from the Department of Public Works and Highways (DPWH), the Department of Budget and Management (DBM) said.

In its latest disbursement report on Thursday, the DBM reported that expenditures on infrastructure and other capital outlays fell by 25.3% to P93.3 billion in July from P124.9 billion in the same month last year.

Month on month, it dropped by 37.3% from P123.8 billion in June.

This was a reversal of June’s annual 6.5% increase amid lifting of the election ban in early May.

The DBM attributed the year-on-year decline in infrastructure spending to weak disbursements from the DPWH, which is currently embroiled in a controversy over anomalous flood control projects.

The Budget department noted the slow DPWH disburements were due to project implementation schedules, including the timing and phasing of infrastructure activities, as well as delays in procurement, incomplete submission of progress billings and required documents by contractors.

Spending in July was also affected by contractors’ compliance with the new tax clearance requirement of the Bureau of Internal Revenue (BIR) for the release of final payments.

The BIR earlier said failure to present clearance will result in the suspension of contract settlements and the imposition of a tax line over the contract amount in favor of the government.

The updated clearance guarantees that every contractor has no outstanding tax liabilities and has duly filed and paid all applicable taxes.

“Disbursements for the Revised Armed Forces of the Philippines Modernization Program (RAFPMP) of the DND were also lower in July 2025 attributed to the timing of releases, as big-ticket items were scheduled in August,” the DBM said.

At the same time, the DBM said lower spending was partly offset by higher disbursements from the Department of Transportation, driven by local counterpart funding for foreign-assisted projects and the settlement of outstanding payables.

For the January-to-July period of 2025, overall infrastructure and capital outlays disbursements stood at P713.5 billion, 3.2% down from P736.7 billion in the same period last year.

Based on the 2026 Budget of Expenditures and Sources, the government set its full-year infrastructure spending program at P1.51 trillion, equivalent to 5.3% of the GDP. — Aubrey Rose A. Inosante