THE DEPARTMENT of Budget and Management (DBM) said delayed allotment releases slowed the implementation of infrastructure projects, with their obligation rate reaching only 20% to 30% in the first half, well below the expected 50%.
Acting Budget Secretary Kim Robert C. De Leon said most government agencies were on track in implementing their projects, but infrastructure programs, particularly those under the Department of Public Works and Highways (DPWH), were behind schedule.
“By the middle of the year, there should be at least 50% obligation if we follow the linear calendar. But nationwide, we’re just about 20%-30% owing to the late release of these allotments,” he said at the Philippine Economic Briefing in Davao City on Monday.
Across the National Government, allotment releases from all funding sources reached P6.182 trillion as of end-July, equivalent to 91% of the P6.793-trillion obligation program for the year.
For the DPWH, allotments released under the 2026 national budget reached P527.666 billion, equivalent to 99.5% of its P530.115-billion adjusted program.
However, the DBM’s disbursement report showed P403.3 billion for various DPWH infrastructure projects was released only in May, leaving agencies less time to complete procurement and obligate funds.
Mr. De Leon said agencies would need another one to two months to complete procurement, paving the way for infrastructure project implementation to pick up later in the year.
“We’re optimistic that by the third quarter and hopefully by the fourth quarter, we have all these projects awarded,” he said.
The Development Budget Coordination Committee programmed P251.3 billion in infrastructure and other capital outlays for the third quarter, 2.2% lower than the P256.9 billion spent a year earlier.
For the fourth quarter, infrastructure and other capital outlays are programmed to increase by 49.4% to P328.44 billion from P219.8 billion a year earlier.
However, actual infrastructure and other capital outlays reached only P269.4 billion in the January-to-May period, down 42.9% from P471.5 billion a year earlier.
Mr. De Leon said the delayed releases came as the DBM and DPWH strengthened safeguards in response to the irregularities involving some infrastructure projects in 2025.
The Philippines was rocked by a corruption scandal last year involving allegedly nonexistent or substandard flood control projects linked to public officials and private contractors.
“We really have to institute stronger reforms, not only from our end at the DBM, but also at the end of the DPWH,” Mr. De Leon said.
However, he said tightening controls must be balanced with the need to release funds and implement legitimate projects on time.
“It’s not always about closing all the doors and putting more controls. In fact, that is one of the reasons why the economy has actually slowed down for the first two quarters,” he said.
The Philippine economy grew by just 2.6% in the first half, slower than the 5.4% expansion recorded a year earlier and below the government’s 3.5%-4.5% full-year target.
Finance Secretary Frederick D. Go, speaking at the same event, said lower government spending was a principal reason for the slower economic growth recorded in the second half of 2025 and the first half of this year.
Mr. Go said the government intends to address the spending slowdown in the second half, and “resume business as normal” in 2027.
“As the shocks ease and we resume public infrastructure spending, we will be back on track to our previous growth rates of 5% to 6% per year,” Mr. Go said.
For 2027, Mr. De Leon said all DPWH projects included in the National Expenditure Program were required to have complete supporting documents to ensure that they are ready for implementation.
Complete documentation would allow implementing agencies to conduct early procurement this year and award contracts once the 2027 national budget is approved, he added.
“When you do early procurement this year for 2027 projects, once the President approves the budget, immediately by January, we can start awarding and implementing those projects,” he said.
Mr. Go said the government is also addressing infrastructure bottlenecks through the Public-Private Partnership (PPP) Code and the Accelerated and Reformed Right-of-Way Act.
“A lot of our infrastructure projects in the Philippines are delayed. And if you really look at the reason why, it’s because of right-of-way,” he said.
Mr. Go said 49 of the government’s 209 infrastructure flagship projects are under the PPP program.
“These investments will expand access to education, healthcare, transportation, and build a more connected, more resilient Philippines,” he added. — Justine Irish D. Tabile
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