Government infrastructure spending extends decline in May

MANILA, Philippines — Government infrastructure spending plunged by 35.3 percent in May as stricter vetting of payment claims and paperwork for contractors stalled disbursements, particularly for the Department of Public Works and Highways (DPWH), nearly a year after the flood-control corruption scandal erupted.

However, DBM expects spending to pick up in the coming months, aided by programs under the Unified Package for Livelihood, Industry, Food and Transport (UPLIFT) program.

In its National Government Disbursements report, the DBM said infrastructure and capital outlays slumped by 35.3 percent to P80.1 billion in May from P123.8 billion in the same month in 2025.

This is the 11th straight month of monthly annual decline in infrastructure spending since last year’s scandal.

However, this figure improved by 93.1 percent from April’s P41.5 billion.

“The year-on-year decline primarily reflects the implementation of strengthened review, audit and validation procedures for infrastructure payment claims, as well as documentary compliance requirements for contractors,” the DBM said.

“These enhanced safeguards have affected the timing of some infrastructure disbursements, particularly on DPWH projects,” the agency added.

Offsetting the weakness were higher releases for the Armed Forces modernization program, railway projects under the Department of Transportation and the Department of Education’s school building program.

For the first five months of the year, infrastructure spending likewise fell by 42.9 percent to P269.4 billion from P471.5 billion in the same period last year.

The DBM said these procedures “reinforce safeguards for public spending” even as they disrupt the pace of disbursements.

For 2026, the economic managers set the projected infrastructure expenditure to P1.3 trillion or 4.3 percent of gross domestic product.

Overall government spending modestly increased by 4.8 percent to P2.6 trillion in January to May from P2.48 trillion in the same period a year ago, backed by higher current operating expenditures.

Disbursement performance for the remainder of the year is expected to accelerate, which the DBM said will be supported by the sustained implementation of priority programs and major allotment releases across key sectors.

UPLIFT programs, the government’s response to cushion the impact of the Middle East crisis, will likewise ramp-up spending, it said.

“The UPLIFT Pivot focuses on more strategic and targeted interventions that seek to provide assistance to the sectors of population that are directly and more significantly affected by the adverse impacts of the crisis, minimize economic disruptions, help keep prices of goods stable and ensure business and consumer confidence,” it said.

Fuel assistance programs, protective services or cash assistance programs, as well as fertilizer subsidies, will also receive additional funding.