Government slashes infrastructure spending to P1.34 trillion

MANILA, Philippines —  The Philippine government sharply cut its infrastructure program to P1.34 trillion next year on the backdrop of tightened scrutiny of public works following a multibillion-peso flood control scandal, a Department of Budget and Management (DBM) document showed.

According to the national government fiscal program in the Budget of Expenditures and Sources of Financing, the infrastructure spending program for 2027, which is equivalent to four percent of the gross domestic product, is 20.7 percent lower than the previous program of P1.69 trillion or 5.1 percent of GDP.

State infrastructure spending is projected to hit P1.27 trillion or 4.2 percent of GDP this year from the earlier reported target of P1.56 trillion (5.1 percent of GDP).

It is also lower than the infrastructure spending target of P1.3 trillion or 4.3 percent of GDP announced in January.

The government infrastructure spending program was also lowered to P1.42 trillion or four percent of GDP for 2028 and set at P1.51 trillion or 3.9 percent of GDP for 2029.

The downward revisions come amid the state’s continued tightening of oversight of infrastructure projects following last year’s flood control scandal.

Latest DBM data showed that infrastructure spending from January to May fell 28.2 percent to P401.3 billion from P558.8 billion in the same period last year, marking five straight consecutive declines annually this year alone.

The decline also reflected the sharp weakening in economic growth.

In the second quarter, the Philippine economy slowed to 2.3 percent amid a sharp decline in public construction, the Middle East crisis, heated inflation and sapped household consumption.

Public construction plunged by 32.4 percent as infrastructure agencies remained cautious.

Despite lowered targets, President Marcos is proposing a P644-billion allocation for the Department of Public Works and Highways under the P7.2-trillion National Expenditure Program.

Flood control received a proposed budget of P107.4 billion, with P19.6 billion allocated to ongoing foreign-assisted projects.

In a separate statement, the Caucus of Development Non-Government Organization Networks (CODE-NGO) vowed to remain vigilant over the proposed national budget.

“The proposed budget identifies education, health, social protection, food security, infrastructure, jobs and disaster resilience among its priorities. These stated priorities must now be assessed against the detailed allocations, implementation safeguards and results expected for communities,” the civil society group said.

Budget items to be criticized include flood control mitigation projects, the Local Government Support Fund (P9.74 billion proposed for Support to the Barangay Development Program under the National Task Force to End Local Communist Armed Conflict) and unprogrammed appropriations.

“CODE-NGO will examine the clarity of allocation criteria, adequacy and implementation of safeguards, transparency of releases and expenditures, equitable distribution of public resources and measurable benefits for communities,” the group said.