Infra spending recovery in sight as DPWH targets P250B in Q1
Government infrastructure spending is expected to finally improve in the first quarter following a prolonged slump in the final months of last year that heavily dragged on economic growth.
In a press conference with the Department of Finance, Public Works Secretary Vince Dizon struck a cautiously optimistic tone for infrastructure spending in early 2026, citing “concrete reforms” that are already in place.
Dizon said these reforms mark a shift in the Department of Public Works and Highways’ (DPWH) focus toward long-delayed road upkeep and maintenance, as well as the completion of stalled projects nationwide.
“It’s cautiously optimistic,” Dizon said, speaking after a presentation by key economic officials to private-sector leaders on the government’s reform agenda.
“For infrastructure spending, which is critical, our goal is not just to spend more, but to spend more wisely—to spend on the right things,” he added.
According to Dizon, infrastructure spending in the first quarter is targeted to reach between P200 billion and P250 billion, depending on how much the government is able to collect and raise.
The outlook comes after the DPWH sustained a sharp cut in its 2026 budget, receiving P529.6 billion, or about 40 percent lower than the P881.3 billion originally proposed by the executive branch in the National Expenditure Program.
“We will ensure that whatever funding we are given will be spent on the right things. That’s where the reform is coming in,” Dizon said. Infrastructure spending entered the fourth quarter of last year on a weaker footing, with October disbursements plunging 40.1 percent to P65.9 billion. This marked the fourth straight month of contraction, driven largely by lower releases from the DPWH amid a widening antigraft drive.
This spending slowdown weighed heavily on third-quarter growth, with public construction contracting to a 14-year low of 26.2 percent. As a result, overall economic growth slowed to 4 percent, falling short of the government’s 5.5 to 6.5 percent target.
Finance Secretary Frederick Go, during the same press conference, said full-year economic growth was now expected to come in at 4.7 to 4.8 percent.
By numbers, HSBC Global Investment economist Aris Dacanay earlier said a 10-percent decline in public infrastructure spending typically shaves about 0.5 percentage point off economic growth.
