Government infrastructure spending plunged in the first four months of the year, failing to recover from a high-profile flood-control corruption scandal that triggered aggressive regulatory oversight and disrupted the processing of state funds.

According to the latest national government disbursement report from the Department of Budget and Management (DBM), capital outlays shrank by 45.6 percent to ₱189.3 billion at end-April from ₱347.6 billion recorded in the same period last year.

The contraction was equivalent to a ₱158.4 billion drop in direct state investments for public works.

The DBM explicitly tied the slump to the residual effects of the previous year's public works controversy, noting that infrastructure spending has yet to recover from the impact of the flood-control issues. Recall that the flood control fiasco compelled the government to heighten its oversight over public spending, especially on the Department of Public Works and Highways, which have inadvertently bottlenecked economic productivity.

According to the budget department, progress billings during the four-month window were largely insignificant owing to majority of the current projects still being in the completion phase.

Furthermore, the agency reported that the administrative turnaround time required to clear public payments has been significantly extended due to the introduction of mandatory verification and review procedures.

The infrastructure bottleneck stands in sharp contrast to overall state spending. Total national government disbursements since January rose 5.1 percent to ₱2 trillion from ₱1.9 trillion a year earlier. However, that expansion was entirely driven by elevated allocations for state subsidies, ballooning interest payments, and personnel services rather than growth-driving capital investments.

The drop in capital expenditure was particularly severe in April alone, when outlays more than halved to ₱41.5 billion compared to the ₱85.8 billion spent in April 2025.

The DBM attributed the weakness to the lackluster spending performance of the public works department, citing ongoing delays in executing the current year’s budget and completing backlogged projects.

The heightened compliance requirements also triggered structural payment friction. Stringent verification procedures delayed payment claims, leaving roughly ₱13.8 billion in outstanding checks sitting with the DPWH at the end of April because various contractors and suppliers had yet to clear or encash them.

Despite the weak start to the year, fiscal authorities expect a sharp rebound in construction activity over the near term. The budget department accelerated funding releases in April, deploying ₱72.1 billion in allotments to the public works department, ₱41 billion to the National Irrigation Administration, and ₱17.3 billion for building public schools.

The government followed this up in May by issuing an additional ₱403.3 billion in allotments for big-ticket public works projects. Officials anticipate these late-second-quarter fund injections will catalyze an infrastructure recovery as contractors begin drawing down mobilization fees to restart stalled job sites.