INFRASTRUCTURE spending is seen to rebound and post double-digit growth in the second half of 2026, while the government increasingly turns to public-private partnerships to sustain infrastructure investment.
The government could finally snap its streak of declines in infrastructure spending in the second half, with growth partly driven by a low base in the same period last year, according to Budget Undersecretary Romeo Matthew T. Balanquit. He was speaking to reporters on the sidelines of the Economic Journalists Association of the Philippines’s forum on Friday.
When the flood control corruption scandal leaked, infrastructure spending had been down since the second half of 2025 due to stricter billing validation of Department of Public Works and Highways (DPWH) projects.
‘We definitely see an increase in the third and fourth quarters this year,’ Balanquit said, noting that growth will also be supported by the utilization of funds that the Department of Budget and Management released to DPWH in the previous months.
This year, infrastructure spending was cut to P1.272 trillion from P1.558 trillion, equivalent to 4.2 percent of the gross domestic product (GDP).
Last year, the Marcos Jr. administration was aiming for infrastructure spending as a share of GDP to be around 5 percent in the medium term.
What matters now, Balanquit said, is to increase the infrastructure spending-to-GDP ratio and not by relying indefinitely on higher government spending to meet its infrastructure needs.
‘In fact, we are trying to unbundle and release that burden from DPWH. When it comes to school-building infrastructure, the Department of Education is now trying to tap local government units and also the private sector through public-private partnerships [PPP],’ Balanquit said.
This is the direction the government is undertaking right now, Balanquit said, as they have seen greater private-sector appetite for infrastructure projects, with the PPP pipeline now exceeding 500 projects, compared with fewer than 100 before the enactment of the PPP Code.
The projects are also becoming more diversified, from traditional transport infrastructure such as roads and railways to social-sector infrastructure, he noted.
This strategy of tapping private investors will continue despite the recovery in public infrastructure spending, Balanquit added. ‘What’s great about this is that even the private sector is also becoming involved in investment in these long-term projects.’
The rebound in infrastructure spending could also boost economic growth in the second half, particularly as the government sticks to its full-year growth target of 3.5 to 4.5 percent, Balanquit said.
However, the economy would need to expand by around 6 percent in the second half to reach the upper end of the government’s target, he added.
‘I think that’s manageable,’ he said. ‘I honestly believe we will be doing well in terms of public construction.’
As of end-May, infrastructure spending and other capital outlays contracted by 42.9 percent to P268.4 billion from P471.5 billion in the same period a year ago.