The trillion-peso pipeline of private-public partnership (PPP) projects can help offset funding cuts for the Department of Public Works and Highways, according to the Department of Budget and Management.
DBM Assistant Secretary Romeo Matthew Balanquit noted that the country can afford a slowdown in infrastructure spending, as the government’s P6-trillion PPP projects provide sufficient room for human development and education.
‘I just had the number. Like there was a 67-percent increase in the number of PPPs since 2023. Those existing PPPs right now are around 281 projects, while those in the pipeline are around 251 projects in the future,’ he told The STAR.
‘I think for next year, you can say that, but that’s to the tune of something like P6 trillion,’ he added.
In terms of the economic drag due to infrastructure budget cuts, Balanquit said economic managers have yet to meet to adjust economic growth targets, as they are still awaiting the release of the country’s third-quarter economic growth data.
‘It’s very difficult to say that the gross domestic product (GDP) will go down because of the P255 billion that is pulled out from the infrastructure project, because we are relying so much now on PPPs,’ he said.
He noted that while public construction recorded negative growth in the second quarter, this was offset by the strong performance of private construction, allowing the economy to grow by 5.5 percent.
The Cabinet-level Development Budget Coordination Committee (DBCC) lowered this year’s economic growth target to between 5.5 and 6.5 percent from the earlier projection of six to eight percent.
‘We’re expecting that this good performance coming from the private sector would continue in the third quarter, but that remains to be seen. That’s why, we, the DBCC right now, we don’t have any plans yet of changing the target for 2025, so we will see it,’ Balanquit said.
The DBM official added that more concrete steps will be taken after the third-quarter GDP growth is released.
Data from the DBM showed that from January to July, infrastructure spending remained 3.2 percent behind at P713.5 billion, compared to P736.7 billion in the same period last year.
Several factors came into play, which the budget department primarily attributed to the election spending ban from March to May, delays in procurement activities and contractors’ incomplete submissions and billings in July.
Finance Secretary Ralph Recto earlier admitted that an economic slowdown this year is likely due to subdued spending, which could affect overall economic activity. He said lower revenue collection and dampened government spending continue to weigh on the country’s growth prospects.