Government infrastructure spending rises to P1.5 trillion

MANILA, Philippines — The government ramped up its infrastructure spending last year, hitting P1.5 trillion and effectively surpassing its programmed allocation on the back of faster disbursements for major transport and road projects, according to the Department of Budget and Management (DBM).  

Based on the latest national government disbursement performance report of the DBM, infrastructure disbursements picked up by nearly 10 percent to reach P1.545 trillion last year from P1.42 trillion in 2023.

Apart from capital outlays, total infrastructure disbursements last year included components of subsidy and equity to state-run corporations and transfers to local government units relating to infrastructure.

Infrastructure expenditures accounted for about 26 percent of the record P5.75 trillion government disbursements in 2024.

Similarly, last year’s infrastructure spending surpassed the P1.47 trillion program by P72.4 billion or almost five percent due to the faster disbursements of some agencies, particularly the Department of Public Works and Highways (DPWH).

As such, infrastructure spending was equivalent to 5.8 percent of the country’s gross domestic product (GDP).

This was the same level in 2023, but was above the 5.6 percent target set by the government for 2024.

The DBM said the expansion in infrastructure and other capital outlays was due to the robust performance of the DPWH for its banner projects and the Department of National Defense for its modernization projects.

In particular, the DPWH accelerated the implementation of construction activities from carry-over projects and progress billings from completed ongoing infrastructure projects.

Likewise, the DBM attributed the higher infrastructure spending to the direct payments made by development partners for foreign-assisted rail transport projects of the Department of Transportation.

For 2025, total infrastructure disbursement is expected to be at least 5.4 percent of GDP, in line with the five to six percent target under the medium-term fiscal framework of the Marcos administration.

On the other hand, overall government spending in 2024 reached P5.93 trillion, up by 11 percent on a yearly basis.

Broken down, personnel services expenditures went up by 6.3 percent to P1.53 trillion following the implementation of the first tranche of salary adjustments under Executive Order 64.

The government also recorded higher maintenance and other operating expenses to P1.09 trillion due to the implementation of social protection programs, medical assistance to healthcare workers and for the preparatory works for the May polls.

Interest payments, likewise, increased by 21.5 percent to P763.3 billion due to new loan availment, foreign exchange fluctuations and higher interest rates.

On the other hand, a decrease in government spending was noted in subsidy support to government corporations, which went down to P138.8 billion due to minimal releases to the Philippine Health Insurance Corp.

Net lending also dropped  by 74 percent to P6.9 billion due to  the minimal availment by the National Food Authority amid change in the maturity profile of the agency’s debt obligations.