Infrastructure Spending Rebounds Strongly in June

State spending on infrastructure bounced back in June as government agencies resumed payments for public works projects following the lifting of the election ban, according to the Department of Budget and Management (DBM).

Latest data showed that infrastructure and other capital outlays reached P148.8 billion in June, up 6.5% year on year from P139.7 billion. Month on month, disbursements rose by 20.2% from P123.8 billion in May.

The rebound came after two months of slower disbursements caused by the Commission on Elections’ 45-day restriction on public works, which ended on May 12.

The Department of Public Works and Highways (DPWH) resumed mobilization payments for newly awarded projects and settled obligations from previous years, driving the June uptick.

Budget officials noted, however, that year-on-year growth was tempered by large disbursements in June 2024 for the Department of National Defense’s modernization program.

Economists said the increase in infrastructure spending bodes well for the economy. Rizal Commercial Banking Corp. Chief Economist Michael Ricafort described it as a catalyst for inclusive growth.

“Better infrastructure boosts productivity, attracts more foreign tourists and investors, and creates multiplier effects across industries,” Ricafort said.

For the first half of 2025, infrastructure and capital outlays totaled P620.2 billion, up 1.4% from P611.8 billion in the same period last year. This was nearly on target with the P621-billion program for the semester.

Meanwhile, overall infrastructure disbursements including transfers to local governments and subsidies to government corporations hit P720.3 billion, slightly higher than the P718-billion program.

The DBM expects spending to further accelerate in the second half of the year, as line agencies ramp up requests for allotments and process delayed payments from the election period.

“Progress billings from completed road and transport projects, along with defense modernization releases, are anticipated to drive higher disbursements in the coming months,” the DBM said.

Government spending on infrastructure is targeted at P1.51 trillion this year, equivalent to 5.3% of GDP, in line with long-term plans to sustain spending at 5–6% of GDP annually.