Corruption mess weighs heavily on infra spending

Corruption's Heavy Toll Infrastructure Spending Plunges Amid Scandal

The ongoing corruption scandal at the Department of Public Works and Highways (DPWH) has dealt a significant blow to infrastructure spending in the Philippines. According to data from the Department of Budget and Management (DBM), infrastructure outlays plummeted by 42.6% to P78.7 billion in September, down from P137.1 billion in the same period last year.

The decline is largely attributed to the DPWH's continued contraction in spending, which has now persisted for three consecutive months since July 2025. The department's woes began after President Ferdinand Marcos Jr. exposed substandard projects that led to widespread flooding in Metro Manila and other parts of the country.

The DBM cites four key factors contributing to the decline delays or non-submission of billings by contractors, increased scrutiny by oversight bodies, freeze orders against DPWH implementing offices, and unfavorable weather conditions. While infrastructure spending would have been even worse without counterpart funding for foreign-assisted Transportation department projects and the Armed Forces of the Philippines modernization program, the overall impact is still significant.

The decline in infrastructure spending has also had a ripple effect on national government disbursements, which fell 7.5% to P529.8 billion in September from P572.9 billion in the same period last year. This has raised concerns about its potential impact on economic growth, which slowed to 4.0% in the third quarter from 5.5% in April-June.

Despite these challenges, the DBM remains optimistic that capital expenditures will partly normalize towards the end of the year as governance measures and safeguards against corruption are implemented. The department is focusing on ramping up spending on social services and infrastructure to catch up with programmed disbursements, with a goal of completing most public works projects by the end of the year.

In this blog post, we will explore the impact of corruption on infrastructure spending, examine the potential consequences for the economy, and discuss measures that can be taken to restore trust in government spending.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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