More agencies must make sharp cuts in infra cost
Following the Department of Public Works and Highways’ (DPWH) move to reduce the costs of its materials by as much as 50 percent to align these with real market prices, President Marcos on Thursday ordered more agencies to cut their expenses for construction projects.
The directive covers the Department of Education, Department of Agriculture, National Irrigation Administration, Department of the Interior and Local Government, Department of Health, and Department of Transportation, among other agencies with infrastructure items in their budgets.
The move is expected to substantially reduce the costs of farm-to-market roads, classrooms, hospitals, ports, bridges, and irrigation systems in 2026, according to the President.
“So let me be clear. The quality of what we build will not be compromised. The only thing weakened will be corruption,” Mr. Marcos said in his departure speech before leaving for Gyeongju, South Korea, to attend the 32nd Asia-Pacific Economic Cooperation Economic Leaders’ Meeting from Oct. 30 to Nov. 2.
“This is the accountability that our citizens deserve. It will not be limited to the public works, but it shall be the norm across all of the government,” he added.
Big savings
According to the President, the savings from the lower costs of the projects will be used to support the government’s other social programs.
“The savings we secure will go where they matter most: to programs that uplift families, support livelihoods, and strengthen communities. Because when our people grow in capability and confidence, the nation grows with them,” Mr. Marcos noted.
“[From] a government that honors public trust, a nation that stands firm on integrity, this is our promise: a real change for every Filipino today and for generations to come,” he added.
President Marcos projected that the significant reduction in the prices of construction materials will result in savings of at least P35 billion to P45 billion in the government’s capital outlays, which refer to the expenditures to build roads, bridges, dams, irrigation work, schools, and hospitals.
These expenses make up almost a quarter, or P1.461 trillion, of the P6.352-trillion budget for the current year.
Under the proposed P6.793-trillion budget for 2026, capital outlays are already down by 9.4 percent to P1.324 trillion.
While the 2026 budget is still being deliberated in the Senate, the capital outlays under the House of Representatives-approved General Appropriations Bill was slashed after the lower chamber completely eliminated the allocation for locally funded flood control projects under the DPWH’s budget and realigned these to other agencies.
Pricing benchmark
This resulted in some P255.5 billion being slashed from the proposed 2026 outlay of the DPWH following President Marcos’ order to conduct a sweeping review of its original P881.3-billion budget.
With the President’s latest order, the final capital outlays in the proposed 2026 General Appropriations Act can even go down further.
On Oct. 25, before he attended the 47th Association of Southeast Asian Nations (Asean) Summit in Malaysia, President Marcos ordered Public Works Secretary Vince Dizon to cut the agency’s standard costs for construction materials by half after learning that these were overpriced.
The directive comes in the wake of the corruption scandal that cost the government multibillion-peso losses from irregular, incomplete, substandard and “ghost” flood control projects that the President himself exposed in August.
Dizon called the President’s directive the “single biggest reform ever in the DPWH.”
“The lowering of material costs is just one of the many reforms and changes we need to implement in the DPWH,” Dizon said. “In my view, that is the most important one because if we can bring those costs down, we automatically bring down corruption as well.”
The DPWH sets the baseline cost of materials used for government infrastructure projects through its construction materials price data (CMPD).
Along with labor and equipment rental rates, the CMPD serves as the basis for the detailed unit price analysis, the program of works, and the approved budget for the contract.
Cheaper prices of construction materials as outlined under CMPD will result in lower costs for projects funded by taxpayers’ money.
