Infrastructure spending declines for fifth straight month in Nov.

Government infrastructure spending fell further in November as the flood control project scandal continued to unfold, the Department of Budget and Management (DBM) said.

Infrastructure and capital outlays plunged by 45.2 percent in November to P48.0 billion from P87.6 billion a year earlier, and the DBM said “the spending performance of the DPWH (Department of Public Works and Highways) continued to post negative growth amid the ongoing probe and crackdown on corruption issues.”

“This consequently slowed down the implementation of its various infrastructure projects nationwide and affected the prompt submission of progress billings by contractors and processing of payment claims,” it added.

The scandal broke after President Ferdinand Marcos Jr. said in July that substandard projects had led to massive flooding in Metro Manila and other parts of the country.

It has led to a shake-up at the DPWH, leadership changes in Congress and a Cabinet revamp that cost Amenah Pangandaman her post as Budget secretary.

Those directly involved in the scandal, however, have yet to be jailed and the impact on spending and sentiment has yet to dissipate despite government promises of reforms.

Infrastructure and capital outlays were also lower year to date, falling by 16 percent to P991.1 billion from P1.18 trillion in January-November 2024.

“Infrastructure spending was weighed down significantly by the contraction of DPWH’s disbursements during the period in the wake of flood control corruption issues,” the DBM said.

“On the other hand, subsidies were lower year on year owing to minimal requests for subsidy releases by the National Irrigation Administration given their available cash holdings,” it added.

The department also said that funding for the National Health Insurance Program was charged against Philippine Health Insurance Corp.’s operating budget, which contributed to the spending drop.

About P140.4 billion remained available for release from the regular budgets of departments (P97.7 billion), special purpose funds (P42.6 billion) and automatic appropriations as of Nov. 30, 2025.

This was despite the 2025 obligation program of P6.33 trillion already having been exceeded following additional releases from continuing, automatic and unprogrammed appropriations.

The release of the remaining funds depends on the agencies concerned submitting special budget requests and required documents, which will be reviewed by the DBM

Based on preliminary data, around P74.3 billion in allotments was released in December, which could have supported government spending toward the end of 2025.

Source: Manila Times

Infrastructure spending boost seen key to faster PH growth in 2026

A recovery of government infrastructure spending after a deep slump triggered by the flood control scandal would be the most effective way to accelerate growth, ANZ Research said, arguing that the boost from interest rate cuts is still debatable in an environment of weakening confidence.

In a note to clients, Sanjay Mathur, ANZ’s chief economist for Southeast Asia, said that while the Bangko Sentral ng Pilipinas (BSP) may opt for one last final rate cut to support the economy, there are repercussions from the graft fallout that may not be effectively addressed through monetary policy easing.

“There has been a downshift in the growth in the Philippines as repercussions from governance-related issues in public infrastructure projects have not receded,” Mathur wrote. “The resulting weakness in public spending, particularly on the capital side, has permeated into the household and business sectors.”

“The efficacy of the monetary policy easing cycle against the backdrop of low household and business confidence is debatable,” he added. “In our view, a revival in government spending is the most appropriate pathway to faster growth.”

Lowered growth target

Earlier this month, economic officials in the Marcos administration trimmed their 2026 growth target to 5 to 6 percent, from the previous goal of 6 to 7 percent, underscoring the economic costs of the sweeping investigation into anomalous flood control projects.

ANZ’s Mathur estimated that growth in the fourth quarter of 2025 may have settled at a “sub-potential” rate of 4.5 percent, which, he said, is likely to validate the need for an additional cut in the policy rate.

To help “compensate” for the effects of the graft fallout, the BSP cut its benchmark rate by a quarter point to 4.5 percent last December, bringing total reductions since the easing cycle began in August 2024 to two percentage points.

Source: Inquirer

Only 65 percent of farm-to-market roads completed in 5 years

Only 65 percent of the 4,810 farm-to-market road (FMR) projects under the Department of Public Works and Highways (DPWH) were completed from 2021 to 2025, according to the Department of Agriculture (DA).

Only 3,135 projects were completed in the past five years, according to preliminary FMR data the DA shared with the media through its transparency platform, which is currently in beta testing.

Data showed that at least 817 FMR projects have not commenced while 34 projects have been deferred, according to the DA.

Meanwhile, there are at least 677 ongoing funded FMR projects during the five-year period.

There are still at least 27 FMR projects funded in 2021 that are ongoing while there are three more financed in 2022 that are yet to be completed, based on the database.

Data also showed that there are still 28 ongoing FMR projects funded in 2023, 213 projects in 2024 and 406 projects under the 2025 budget.

The DA is updating and refining the database since it is still in its beta stage. The DA plans to publicly launch the transparency platform, dubbed FMR Watch, by February.

The platform features real-time project monitoring and updates as well as detailed financial information and budget for every FMR project. The public can access these for free and is encouraged to scrutinize the FMR projects and subsequently provide feedback and even complaints to the DA.

Each project has been geotagged with proper progress documentation from the start of procurement up to its completion.

The DA vowed to respond to citizens’ complaints regarding FMR projects within 24 hours once the transparency portal has been rolled out.

Throughout the five-year period, the government allocated P76.52 billion for all the 4,810 FMR projects. The 3,135 completed FMR projects were equivalent to nearly 2,400 kilometers of road.

Based on its estimates, at least 721,500 farmers have benefitted from the completed FMR projects across 2,400 communities nationwide, saving them 7,800 hours in transportation time while allowing them to move 240,000 metric tons of produce, according to the DA.

Central Luzon had the top budget allocation for FMR projects at P9 billion followed by the Bicol Region at P7.7 billion and Ilocos Region at P7.4 billion.

The DA assured the public that it has all the capabilities to undertake the completion of FMR projects this year worth P33 billion. 

The implementation of the FMR projects has been transferred to the DA following the controversies and issues surrounding DPWH’s infrastructure projects.

The DA also vowed to construct cheaper but still quality FMRs this year as it seeks to build more roads with its budget. The DA said its FMR projects will cost less than the P15 million per kilometer allocated budget in the past.

Source: Philstar