Massive contractions in public infrastructure spending may have bottomed out by midyear, with the Department of Budget and Management (DBM) saying funds have already been released and are now awaiting faster spending by implementing agencies in the second half.

Budget Secretary Kim Robert De Leon told Manila Bulletin on Thursday, Aug. 27, that the DBM is pushing the Department of Public Works and Highways (DPWH) to speed up infrastructure spending for the remaining months of 2026.

“We have reports that projects have been awarded starting July so we can expect an uptick starting July leading up to August depending on the ability of the DPWH to actually implement its projects,” De Leon said.

De Leon’s statement comes against the backdrop of the government’s lackluster spending on public construction. Infrastructure and other capital outlays contracted by ₱252.8 billion, or 40.8 percent year-on-year, to ₱367.4 billion in the first half from ₱620.2 billion in the same period last year. The actual end-June figure was nonetheless higher than the ₱351.8-billion program for the period.

According to the latest national government (NG) disbursement report, the annual spending slump could partly be attributed to the implementation of “strengthened review, audit, validation, and documentary safeguards intended to ensure that government payments are made only for properly verified and compliant infrastructure work.”

Budget Assistant Secretary Romeo Matthew T. Balanquit told Manila Bulletin that the DBM is indeed anticipating a rebound in public construction beyond June. He, however, noted that July data remain unavailable, so the status of the recovery remains unquantifiable as of writing.

“Most of the reevaluation of existing infrastructure projects are already completed so we indeed expect spending to accelerate,” Balanquit said.

Despite reduced spending compared with the 2025 level, the DBM said infrastructure and other capital outlays still outpaced the first-half target by ₱15.6 billion, or 4.4 percent, due to additional fund releases to the DPWH for mobilization costs, right-of-way (ROW) claims, and the settlement of unpaid obligations from the ₱6.793-trillion 2026 national budget and 2025 continuing appropriations.

These efforts, the report said, form part of the government’s measures to prop up infrastructure spending and help drive economic expansion.

Overall infrastructure disbursements stood at ₱518.1 billion as of end-June, down 28.1 percent from ₱720.3 billion in the same period in 2025. These include the infrastructure components of broader categories like subsidies and equity to government-owned and/or -controlled corporations (GOCCs), and transfers to local government units (LGUs).

Recent infrastructure spending declines have had a direct impact on the broader economy, acting as a notable drag on midyear growth figures.

Gross domestic product (GDP) growth slumped to a post-pandemic low of 2.3 percent in the second quarter of 2026, weaker than the 2.8-percent growth posted in the first quarter and the 5.4 percent recorded in the same period last year.

Government spending, driven by expanded social assistance and program delivery, grew by 8.3 percent, which “provided support to the economy amid subdued domestic demand, weaker public construction, and continuing external headwinds.”

To counter these headwinds and stimulate the economy, the state has implemented recovery measures. One of the major efforts is “the acceleration of the implementation of high-impact infrastructure projects.”

The Marcos Jr. administration is ramping up infrastructure spending in the second half of the year, boosting planned national and local capital outlays by ₱209.5 billion over the first six months to hit its ₱1.27-trillion disbursement target for 2026.

Overall infrastructure spending is set to increase quarter-on-quarter, peaking in the final three months of the year.

For the first half, the Cabinet-level Development Budget Coordination Committee (DBCC) slated ₱531.6 billion for the infrastructure program—actual spending of ₱236.1 billion in the first quarter and a programmed ₱295.4 billion for the second quarter. That spending plan was raised by 39.4 percent to ₱741 billion for the second half, of which ₱337.2 billion has been set aside for the third quarter and the year’s biggest quarterly program of ₱403.8 billion for the fourth quarter.

Key sectoral releases and project approvals are also expected to reverse the spending slowdown in the second half, the report said. This could be driven by additional funding for DPWH projects, school facilities, farm-to-market roads (FMRs), and Armed Forces of the Philippines (AFP) modernization projects.

Further, the settlement of the Department of Transportation’s (DOTr) unpaid obligations for foreign-assisted rail projects could also accelerate infrastructure spending for the remainder of the year.

According to documents on the proposed ₱7.2-trillion 2027 national budget, the government’s infrastructure program would gradually rise to ₱1.34 trillion in 2027, ₱1.42 trillion in 2028, and ₱1.51 trillion in 2029, even as its share of GDP would remain at around four percent.