STATE OUTLAYS on infrastructure rebounded in June, as expenditures for public works initiatives started again following the election prohibition being lifted in early May, the Department of Budget and Management (DBM) reported.
In its most recent disbursement update on Thursday, the DBM disclosed that spending on infrastructure and other capital expenses rose by 6.5% to P148.8 billion in June from P139.7 billion during the same month last year.
Month over month, it grew by 20.2% from P123.8 billion.
This occurred after May experienced a year-on-year 9.2% reduction.
“This was primarily linked to the recovery in the DPWH’s (Department of Public Works and Highways) expenditure performance after a two-month downturn in April and May amid the election ban,” it stated.
The Commission on Elections’ 45-day prohibition on public works expenditures initiated on March 28 and concluded with the elections on May 12.
In June, the DPWH resumed payments for mobilization charges and advanced payments for newly awarded initiatives. It also resolved outstanding commitments from prior years.
However, the DBM remarked that the speed of infrastructure expenditures was moderated by base effects from considerable allocations for the Department of National Defense’s Revised Armed Forces of the Philippines Modernization Program in June of the previous year.
The Philippines has been enhancing its military capabilities under the $35-billion modernization initiative since 2012, in response to escalating tensions in the South China Sea.
The DBM indicated that substantial disbursements for infrastructure are anticipated in the latter half of the year.
Budget Secretary Amenah F. Pangandaman previously stated that disbursements are expected to accelerate towards late May to June following the end of the 45-day election prohibition.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort remarked that heightened infrastructure spending is essential for economic advancement.
“(This will lead to) more inclusive economic growth and progress, as improved infrastructure enhances the economy’s productivity and helps draw in more international tourists and foreign investments/locations,” Mr. Ricafort communicated via a Viber message on Thursday.
For the first half of 2025, total infrastructure and capital outlay disbursements rose by 1.4% to P620.2 billion from P611.8 billion in the same timeframe last year.
This was 0.1% or P800 million below the P621-billion objective for the first semester.
“Although infrastructure outlays recorded a significant 20.8% (P45-billion) annual growth in the first quarter of this year, it faced a contraction of 9.3% (P36.6 billion) in the second quarter due to the election-related restrictions on public spending that lasted through all of April and the first two weeks of May,” the DBM noted.
Simultaneously, overall infrastructure disbursements, which encompass the infrastructure components of subsidies or equity to government corporations and transfers to local government units, remained nearly unchanged at P720.3 billion in the January-to-June duration from P720.5 billion a year prior.
It also surpassed the total infrastructure spending target of P718 billion for the initial half by 0.3%.
The DBM stated that the growth in infrastructure transfers to local government units, particularly their development funds equivalent to 20% of the National Tax Allotment, was balanced out by a decrease in National Government-implemented infrastructure projects and reduced subsidies to state bodies, such as the National Irrigation Administration (NIA).
Subsidies allocated to state-owned enterprises amounted to P7.45 billion in June, a decline of 26.68% from P10.16 billion a year prior.
Budgetary support to the NIA plunged by 68.21% in June to P2.39 billion from P7.52 billion during the same period in 2024.
“Nonetheless, total infrastructure spending for the first half was recorded at 5.3% of GDP (gross domestic product), in line with the 5.3% full-year target for this year,” it added.
According to the 2026 Budget of Expenditures and Sources, the government has set its full-year infrastructure spending plan at P1.51 trillion, corresponding to 5.3% of the GDP.
In the upcoming months, the DBM indicated that government agencies are expected to escalate requests for the release of funds for their programs, activities, and projects in the second half as implementation activities normalize following the election prohibition.
“These may also involve unspent cash allocations from the second quarter that agencies can still request in the second half so they can facilitate payments and make disbursements to suppliers or contractors for goods delivered or services rendered,” it stated.
Among the expected spending catalysts for the upcoming months are progress billings from numerous completed or partially finished road and transport infrastructure initiatives, as well as allocations for the defense modernization program.
“Increased infrastructure spending at around 5%-6% of GDP in the coming years, as observed in recent years, would likely lead to sustained growth in infrastructure expenditures,” Mr. Ricafort concluded. — Aubrey Rose A. Inosante
