DBM: DPWH budget cut a ‘small drag’ on 2026 GDP

MANILA, Philippines — The reduction in spending for infrastructure projects is expected to have only a minimal effect on the country’s gross domestic product (GDP) next year, according to the Department of Budget and Management (DBM).

With reduced funding for the Department of Public Works and Highways (DPWH), Budget Secretary Amenah Pangandaman said the amount cut after the budget revision would be reallocated to education and other priority social programs to support government initiatives.

“Not that big; our infrastructure budget is more than a trillion, right? So if we just reduce the DPWH budget, we still have other infrastructure projects that are moving forward,” the DBM chief told reporters.

Based on the Budget of Expenditures and Sources of Financing for fiscal year 2026, infrastructure allocation disbursements for next year will be at P1.56 trillion or equivalent to 5.1 percent of the country’s GDP.

It is also 3.2 percent higher than this year’s P1.51 trillion infrastructure spending, as approved by the Cabinet-level Development Budget Coordination Committee.

Meanwhile, the GDP growth target for next year is at six to seven percent.

According to Pangandaman, the budget reduction for the DPWH would not affect the country’s fiscal deficit, emphasizing that the government’s proposed 2026 national budget remains at the same level despite the adjustment at P6.793 trillion.

“The DPWH doesn’t have the P250 billion anymore so they can put it in the areas of education, health and electrification, among others. Also in state universities and colleges, they can also allocate it there,” she said, referring to the possible acts of Congress moving forward.

DPWH Secretary Vince Dizon has presented the revised budget for the agency amounting to P625.78 billion, down by 30 percent from the earlier proposal of P881.31 billion.

In comparison to the current year’s General Appropriations Act, the newly proposed budget is about 42 percent lower than this year’s level of P1.09 trillion.

The submission of a revised budget came after President Marcos ordered Dizon to revisit the proposed budget of the DPWH and the red flags pointed out by senators during a committee hearing.

“The main highlight of this revision is the President’s directive to remove all locally funded flood control projects amounting to P252 billion,” Dizon said.

Amid the leadership change in the House of Representatives, Pangandaman expressed confidence that the budget calendar remains on track, assuring that the possibility of a reenacted budget is unlikely.