President Marcos expressed confidence that the government would catch up with and surpass last year’s level of public spending by the fourth quarter of 2026, with faster expenditures expected to support economic growth.

Speaking at the Foreign Correspondents Association of the Philippines (FOCAP) Presidential Luncheon in Manila on Friday, Aug. 14, the President said government spending had been delayed after the administration conducted a close review of the previous year’s national budget.

“But again, in terms of public spending, we are pretty much on current, in terms of our scheduling,” he said.

“I am confident we will be able to catch up and exceed the year-on-year public spending by the last quarter of this year,” he added.

Marcos said projects under the National Expenditure Program (NEP) are normally bid out before the start of the fiscal year to allow their immediate implementation once the budget takes effect.

The review of the previous year’s budget, however, resulted in some projects and contracts being bid out only toward the end of the first quarter of 2026, delaying government expenditures.

“That is what happened. That's why it delayed the public spending,” Marcos said.

According to the President, the administration subsequently adopted measures to accelerate government expenditures, narrowing the spending gap to about seven percent year-on-year by the end of the second quarter.

“As of the end of the second quarter of this year, we are only at a shortfall of about 7 percent year on year in terms of public spending,” he said.

“We will make that up for the rest of the year,” he added.

Marcos said faster government spending was expected to increase economic activity and contribute to higher gross domestic product (GDP) growth.

He, however, cautioned that accelerating spending should take into account the capacity of government agencies and private contractors to implement projects.

“What we are running into very much is the absorptive capacity, not only of the government agencies, but also of the contractors,” the President said.

“They can only do so much work,” he added. 

Marcos likewise stressed that simply increasing expenditures without considering implementation capacity would not necessarily improve project delivery.

“So throwing money at the problem simply doesn't solve it, doesn't make anything better,” he said.

“That is the balance that we are trying to manage right now,” he added.

The administration has also used public spending for direct assistance and subsidies intended to cushion households from elevated food and fuel prices, including diesel subsidies and support for the transport sector.

President Marcos cited lower tariffs on imported rice, the expansion of the P20-per-kilo rice program, and government assistance benefiting around 7.5 million Filipino families as part of efforts to ease inflationary pressures.

He said restoring economic stability remained a priority amid external pressures, particularly higher global oil prices and uncertainty arising from the conflict in the Middle East.

“We are hoping that the situation in the Strait of Hormuz improves,” Marcos said, noting that stable shipping routes would help provide more predictable conditions for petroleum supplies and economic planning.