Infrastructure spending jumps 23%

By Aubrey Rose A. Inosante, Reporter

STATE SPENDING on infrastructure rose by 23.1% in the first two months of 2025, as the government ramped up disbursements for public works projects ahead of the election ban, the Department of Budget and Management (DBM) said.

In its latest disbursement report, the DBM said spending on infrastructure and other capital outlays jumped by 23.1% to P148.3 billion as of end-February from P120.5 billion in the same period last year.

“The robust infrastructure spending outturn was mainly credited to the disbursement performance of the Department of Public Works and Highways (DPWH),” it said.

The DPWH completed carryover infrastructure projects, as well as made payments for right-of-way settlements and emergency and disaster-related civil works. It also logged higher contractor billings and expedited the processing of accounts payable.

The Budget department said some of the DPWH projects included construction and maintenance of roads, bridges, flood control structures and multi-purpose buildings.

“Furthermore, the direct payments made by development partners for progress billings of ongoing foreign-assisted projects of the Department of Transportation, such as the North-South Commuter Extension Project, South Commuter Railway Project, Davao Public Transport Modernization Project, as well as the DPWH for its Pasig-Marikina River Channel Improvement Project, helped sustain the strong infrastructure and other capital expenditure performance during the first two months of the year,” it said.

Data from the DBM showed overall infrastructure disbursements, which include infrastructure components of subsidy/equity to government corporations and transfers to local government units, jumped by 19.3% to P182.9 billion in the January-to-February period from P153.4 billion a year ago.

Total NG disbursements as of end-February jumped by 13.8% to P822 billion, mainly due to faster infrastructure spending and allotments to local government units.

“Disbursements for March 2025 likely improved significantly as line agencies were expected to have utilized their remaining cash allocations that have been fully credited during the first quarter of the year. Non-utilization would let the cash allocations lapse on the last working day of the quarter,” the DBM said.

It noted that agencies were expected to have accelerated disbursements ahead of the election ban on the release of public funds that started on March 28.

“Spending for April 2025 is expected to temporarily slow down as the election-related prohibition might impede the implementation of some programs and projects,” the DBM said.

However, the department noted that disbursements will likely pick up in the latter part of May to June after the election ban is lifted.

The midterm elections are scheduled for May 12.

The DBM noted that Commission on Elections had exempted some key infrastructure projects, as well as some major health, housing, agriculture, education and labor sector programs, were exempted from the election ban.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted the government accelerated the progress of infrastructure projects ahead of the election ban.

“Completions would serve as metric of achievements especially by incumbent elected officials who will run again and for the groups/parties that they represent,” he said in a Viber message.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc. said the expected lower infrastructure spending in April is merely “transitory.”

“I see infrastructure spending growing faster this year as (interest) rates are expected to go down, higher fiscal space, and fiscal efforts for growth,” he told BusinessWorld via Viber on Monday.

Mr. Erece said the higher spending can also boost “fiscal efforts to support economic growth amid global uncertainty and faltering demand.”

The government’s infrastructure program for this year is set at P1.538 trillion, equivalent to 5.4% of gross domestic product.