PH infra spending plunged 17% in 2025
The Marcos administration’s infrastructure spending plunged in 2025 as the flood control corruption scandal derailed project implementation, dragging overall government disbursements below potential.
Latest data from the Department of Budget and Management (DBM) showed that full-year infrastructure spending dropped 17.3 percent to P1.096 trillion, falling short of the P1.35-trillion program for the year.
In December alone, infrastructure spending fell 27.9 percent to P105.8 billion, marking the sixth consecutive month of decline.
“More specifically, public construction, which accounts for the government’s investments in infrastructure and other capital expenditures, dipped by 17.9 percent,” the DBM explained.
The slump contributed to 2025 gross domestic product growing by only 4.4 percent—a performance that even the government’s economic managers described as below expectations.
The weaker-than-expected output has pushed the administration to revise the 2026 growth target to 5 percent to 6 percent, down from the earlier 5.5-percent to 6.5-percent range.
“The underperformance resulted from the stricter verification of infrastructure projects and validation of payments by the Department of Public Works and Highways (DPWH) because of the corruption issues, while adverse weather conditions in 2025 also affected the implementation and completion of other infrastructure activities,” the DBM added.
Consequently, muted infrastructure spending “significantly dampened” the government’s full-year disbursement outturn.
Although total spending rose marginally by 1.8 percent to P6.03 trillion, this remained below the P6.082-trillion program for 2025.
Economists and research firms warned that the infrastructure slump could spill over into 2026. For instance, ANZ Research earlier flagged the Philippines as likely to remain a regional underperformer this year due to the slowdown.
In January, however, Public Works Secretary Vince Dizon expressed cautious optimism for improvement in the first quarter of 2026, despite the department sustaining a sharp cut in its budget to P529.6 billion—about 40-percent lower than the original P881.3-billion proposal by the executive branch.
According to the DBM, efforts are underway to aid recovery, including the release of P44.2 billion to fast-track the Metro Manila Subway Project Phase I and the North-South Commuter Railway System, as well as investments through public-private partnerships.
Still, the budget department cautioned that spending growth is unlikely to immediately pick up.
“Spending growth for the first semester of 2026 is expected to be tempered given the base effect of sizable capital outlays in the same period last year due to the settlement of accounts payables and the frontloading of some expenditures ahead of the election ban,” the DBM said.
