Hanoi (VNA) – The Philippine government will speed up the disbursement and implementation of infrastructure projects in the second half of this year to support economic growth after public spending slowed amid tighter scrutiny of controversial flood control projects.
Speaking on June 25, Palace Press Officer Claire Castro said infrastructure spending had fallen sharply as government agencies, particularly the Department of Public Works and Highways (DPWH), adopted a more cautious approach to budget disbursement following an investigation into alleged irregularities involving multi-billion-PHP flood control projects.
Castro said stronger government spending, especially on infrastructure, is needed to sustain the country's economic recovery. She noted that the Department of Budget and Management (DBM) has tightened budget releases to ensure projects undergo thorough evaluation before receiving funding.
Her remarks came after the Development Budget Coordination Committee (DBCC) lowered the country's 2026 economic growth forecast to 3.5–4.5%, down from its previous target of 5–6%.
Economic Planning Secretary Arsenio Balisacan said the downgrade reflected mounting headwinds, including tensions in the Middle East and slower-than-expected public investment. However, he expressed confidence that growth would improve in the second half as public spending and infrastructure investment gather pace.
The government said it will continue strategic public investments while improving project preparation, infrastructure planning and budget execution to support long-term growth.
The Philippine economy expanded 2.8% in the first quarter, down from 3% in the previous quarter, weighed down by higher oil prices linked to the Middle East conflict and weaker public spending.
Balisacan said growth could reach around 3.8% if government spending proceeds as planned. Public expenditure rose just 4.8% in the first quarter, well below the 18.7% recorded a year earlier.
DBM data showed infrastructure and other capital outlays fell 45.6% year-on-year to 189.3 billion PHP (3.1 billion USD) in the January–April period, while April infrastructure spending alone dropped 52% to 41.5 billion PHP
The decline marked the ninth consecutive month of falling infrastructure spending since investigations into alleged irregularities in flood control projects began in July last year. The DBM attributed the slowdown mainly to delayed disbursements by the DPWH as stricter verification procedures were introduced to improve transparency and ensure efficient use of public funds.
Philippine authorities expect faster public investment in the coming months to stimulate economic activity, create jobs and support growth amid continued global uncertainty./.
