The Philippines experienced a significant 17.3% decline in infrastructure spending during 2025, falling to P1.096 trillion and missing the government's P1.35-trillion target. This sharp reduction has been attributed to widespread corruption investigations that disrupted project implementation across the country.
According to the Department of Budget and Management, the spending slump contributed to disappointing economic growth of just 4.4% last year—a figure that even government economists acknowledged as underwhelming. The administration has consequently revised its 2026 growth forecast downward to a range of 5-6%, from the previously projected 5.5-6.5%.
"The underperformance resulted from the stricter verification of infrastructure projects and validation of payments by the Department of Public Works and Highways because of the corruption issues, while adverse weather conditions in 2025 also affected the implementation and completion of other infrastructure activities," the DBM explained in its report.
The decline was particularly pronounced in December, with infrastructure investment dropping 27.9% to P105.8 billion—marking the sixth consecutive month of decreasing expenditures. Public construction, which represents the government's primary infrastructure investments, fell by 17.9%.
Economic analysts warn that the infrastructure slowdown may continue into 2026, with some research firms identifying the Philippines as likely to remain a regional underperformer this year. However, Public Works Secretary Vince Dizon has expressed cautious optimism about potential improvement in the first quarter, despite his department operating with a significantly reduced budget of P529.6 billion—approximately 40% lower than originally proposed.
In response to the spending crisis, the government has initiated recovery measures including the release of P44.2 billion to accelerate major transportation projects such as the Metro Manila Subway Project Phase I and the North-South Commuter Railway System. Officials are also exploring increased investment through public-private partnerships.
Despite these efforts, the budget department cautioned that spending growth is unlikely to rebound immediately, with tempered growth expected through the first half of 2026 due to ongoing project verification processes and the lingering effects of the corruption scandal.