Government spending on infrastructure and capital outlays fell sharply in the opening months of 2026, declining by 40.1 percent to P88.7 billion from P148.3 billion in the same period last year, according to the Department of Budget and Management (DBM).
Budget officials attributed the drop largely to slower progress billing as agencies transition from completed projects to newly initiated ones. The agency also noted that spending levels in early 2025 were unusually high after the government accelerated disbursements ahead of election-related restrictions.
Despite the steep decline in infrastructure outlays, overall government spending still posted a modest increase. Total disbursements for January and February reached P836 billion, up 1.7 percent year-on-year, driven by higher interest payments, personnel expenses, and increased transfers to local government units.
The DBM said infrastructure spending may remain subdued in the first half of the year as agencies adjust to ongoing project cycles and the effects of previous large settlements.
However, the agency indicated that the slower pace could lead to improved spending efficiency, citing tighter validation of payment claims, enhanced monitoring of projects, and efforts to fast-track delayed infrastructure works.
Officials expect these measures to help ensure better quality and accountability in public spending as the government continues to roll out new projects throughout the year.