Infrastructure spending declines by 28% in April

Spending on infrastructure slumped in April due to the election ban on disbursements for public works projects, the Department of Budget and Management (DBM) said.

In its latest disbursement report on Tuesday, the DBM reported that spending on infrastructure and other capital outlays declined by 27.8% to P85.8 billion in April from P118.9 billion in the same month last year.

“This was due mostly to the muted infrastructure spending of the Department of Public Works and Highways (DPWH), resulting from election-related prohibition on public spending for specific activities, goods, or services, as well as lower volume of contractor billings,” the DBM said.

Government agencies likely frontloaded and accelerated the implementation of infrastructure projects earlier this year, the DBM said.

The Commission on Elections implemented a 45-day ban on the release, disbursement or expenditures of public funds from March 28 to May 11.

The elections were held on May 12.

The DBM also attributed the decline in infrastructure spending to lower direct payments for foreign-assisted rail projects of the Department of Transportation, as well as the releases for local counterpart funds.

These rail projects include the South Commuter Railway Project and the Metro Manila Subway Project.

For the first four months of the year, infrastructure spending rose by 3.6% to P347.6 billion from P335.7 billion in the same period in 2024.

The DBM attributed the increase in infrastructure spending to the “robust spending performance of the DPWH for the implementation of various infrastructure projects, right-of-way settlements, and payment of progress billings (i.e., partially completed works) and accounts payables.”

Meanwhile, overall infrastructure disbursements inched up by 2.4% to P419.4 billion in the January-to-April period from P409.7 billion a year ago.

This includes infrastructure components of subsidy/equity to government corporations and transfers to local government units.

Analysts said infrastructure spending will likely pick up in the next few months.

“We may expect infrastructure spending to continue ramping up to boost the economy both through higher spending and employment in the construction sector, but also better economic activity comes with better infrastructure,” Oikonomia Advisory & Research, Inc. economist Reinielle Matt M. Erece said.

Budget Secretary Amenah F. Pangandaman earlier said infrastructure-related disbursements would likely increase after the election ban ended.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said government spending, particularly on infrastructure, would be a major contributor to overall economic growth.

“Infrastructure spending has been prioritized and increased in recent years to 5%-6% of GDP (gross domestic product), much higher vs. below 2% of GDP about 20-30 years ago,” he said in a Viber message.

For this year, the government’s infrastructure program is set at P1.538 trillion, equivalent to 5.4% of total output.

The Development Budget Coordination Committee earlier said infrastructure spending will be sustained at 5-6% of GDP annually.

Source: Business World

Investors’ shifting needs drive upgrades in industrial real estate

Industrial property developers are expanding their land holdings and upgrading facilities to meet the evolving requirements of local and foreign investors, according to industry executives.

“We recognize the importance of staying competitive in terms of infrastructure and capacity, hence we continuously invest in modernizing our facilities, expanding our footprint, and applying efficient, space-maximizing design principles to optimize land use,” Damosa Land, Inc. (DLI) President Ricardo F. Lagdameo said.

“We provide a range of options — from ready-built facilities (RBFs) and warehouses that enable companies to quickly begin operations, to industrial lots for lease or sale for those who wish to construct purpose-built facilities,” Mr. Lagdameo also said.

“This dual offering allows investors to jumpstart their activities in RBFs while their custom facilities are being built, significantly reducing time-to-market.”

The company is also exploring opportunities for horizontal and vertical developments to address the changing needs of its locators, he added.

DLI operates Anflo Industrial Estate (AIE), a 63-hectare special economic zone in Panabo City, Davao del Norte, which hosts 24 locators from six countries.

The Philippines risks missing out on opportunities to attract industrial investments due to limited and aging inventory, according to real estate services and investment firm CBRE.

Industrial property developers said global investors are now seeking strategic hubs that support long-term growth.

“Today, it’s no longer enough to simply offer land or build traditional industrial estates. What global investors need is certainty, scalability, and speed to market,” said Aboitiz InfraCapital, Inc. (AIC), the infrastructure arm of the Aboitiz group.

To meet growing demand, AIC said it has been expanding its industrial landbank annually.

“We continuously open new inventory year after year to meet growing demand, backed by a total landbank of nearly 2,000 hectares of industrial land. This gives locators the ability to scale confidently over time, knowing the space and support will be there as they grow,” it said.

AIC currently offers over 60 hectares of available industrial inventory across its four economic estates: LIMA Estate in Batangas, TARI Estate in Tarlac, and the West Cebu Estate and Mactan Economic Zone 2 Estate in Cebu.

Lot sizes range from two to four hectares and are expandable depending on locator requirements, AIC said.

Tarlac-based Victoria Industrial Park (VIP) has focused on providing fully developed industrial lots with modern infrastructure rather than pre-built warehouses, according to Chief Executive Officer Melissa Yeung-Yap.

“This design philosophy empowers companies to build facilities precisely tailored to their specific operational requirements and international standards from the ground up,” she said.

The masterplan for the 30-hectare VIP, which opened in May, also prioritizes efficient internal flow, disaster resilience, and future expansions, Ms. Yeung-Yap said.

“This proactive approach ensures that businesses can scale operations seamlessly as they grow, and their facilities remain relevant and efficient for decades to come, mitigating the challenges posed by limited space and outdated infrastructure,” she added.

Sustainability has also become a key consideration among global locators, developers said.

“Our flexible space solutions — including RBFs, warehouses, and industrial lots for lease or sale — allow companies to start operations quickly, reducing construction waste and promoting efficient land use,” Mr. Lagdameo said.

AIE has adopted modular and space-efficient designs, as well as sustainable features such as LED lighting, rainwater harvesting systems, and solar-ready infrastructure.

All of AIC’s operating estates have received a 5-Star BERDE (Building for Ecologically Responsive Design Excellence) Certification, the highest rating from the Philippine Green Building Council.

To support sustainability goals, AIC estates also offer renewable energy integration, real-time energy and water monitoring systems, efficient waste management, and green mobility infrastructure, the company said.

“Our investments in smart utilities and resilient infrastructure are designed not only for today’s requirements but to meet the demands of future industries,” it added.

CBRE projects around 79,669 square meters of additional industrial space this year, with most of the upcoming supply located in Laguna, Cavite, and Batangas.

Source: Business World

Gross savings climb by 16.7% in 2024

The country’s total gross savings in 2024 climbed by 16.7% from a year earlier, the Philippine Statistics Authority reported.

At current prices, gross national savings, the difference between gross national disposable income and the combined household and government spending, totaled P7.70 trillion, up from the P6.60 trillion in 2023.

This accounts for 26% of gross national income in 2024, higher than the 24% recorded a year earlier.

Overall economic output grew last year, with the gross domestic product (GDP) showing a revised growth rate at 5.7% and gross national income (GNI) at 7.7% in real terms, respectively.

At current prices, GDP and GNI also expanded by 8.8% and 10.8% in 2024, respectively.

During the period, household spending rose year on year by 8.2% to P20.14 trillion. Government spending likewise saw an increase of 11% to P3.84 trillion.

In 2024, the Philippines’ gross national disposable income rose by 10.5% to P31.68 trillion from P28.66 trillion in the previous year. The figure was obtained by subtracting the GNI from the net difference between current transfers to and from the rest of the world.

GNI per capita at current prices stood at P264,804. This was higher than P241,065 in 2023 and P210,228 in 2022.

Broken down by institutions, nonfinancial corporations accounted for more than half of the gross savings last year with P4.96 trillion, followed by financial corporations (25.7% share with P1.98 trillion), households including nonprofit institutions serving households (NPISHs) (5.1% share with P393.31 billion), and general government saving (4.7% share with P364.98 billion).

Oikonomia Advisories and Research, Inc. Economist, Reinielle Matt M. Erece said that the uptick in saving last year was primarily driven by higher interest rates which led households and businesses to “reduce spending and hold their money in banks to take advantage of the interest rate.”

Before the Bangko Sentral ng Pilipinas (BSP) began its easing cycle in August of last year, benchmark interest rates remained steady at 6.5%.

Since then, the BSP has trimmed key rates for three straight meetings last year but paused at its February meeting. The central bank slashed policy rates by 25 basis points each in April and June meetings bringing down the key rate to 5.25%.

“Inflation rate is low and continues a downward trend. This creates an expectation among households to postpone current consumption and save more since prices in the future are expected to further decline,” Tereso S. Tullao, Jr., director at De La Salle University-Angelo King Institute for Economic and Business Studies, said.

Mr. Tullao added that better economic performance and low unemployment rates may also be attributable to higher saving as it moves in line with income.

The country’s unemployment rate dropped to 3.8% in 2024, the lowest figure since the 7.8% in 2005.

“It is possible that households increased their consumption marginally, but they may be putting their remittances in financial instruments, thus increasing their savings,” Mr. Tullao said.

He said that a stable economy driven by low inflation and unemployment rates are the key to sustained national savings.

Mr. Erece said that the trend in increased spending may be continued if price levels are managed and more investments to bolster income growth are made.

For this year, Mr. Erece said that growth in savings may not match the level seen in 2024.

“Rate cuts may encourage more loans to be taken and reduce money that is kept in financial institutions as savings,” he said.

The Consolidated Accounts present a summary of transactions and relationships among the various flows of the economy, while the Income and Outlay Accounts are compiled for the four institutional sectors, namely, financial and nonfinancial corporations, general government, and households including nonprofit institutions serving households.

Source: Business World