GOVERNMENT EXPENDITURE is likely will slow down in the first half of 2025 against the election ban on public works and congressional insertions into the national budget, according to the Ministry of Budget and Management (DBM).
Budget Assistant Secretary Romeo Matthew T. Balanquit said government spending in the first two quarters is “potentially lower” compared to the same period in 2024 due to the ban on public works ahead of the May elections.
The Commission on Elections (Comelec) will implement a ban on public works on March 28 or 45 days before the May 12 elections. Social security payments are also prohibited during this period.
The Development Budget Coordination Committee previously said there “may be a delay in the implementation of projects in the first half of 2025 due to the upcoming mid-term national and local elections.”
However, the DBM said infrastructure spending ahead of the elections will not be “disrupted” by the election ban as “the phasing of projects has already been planned, especially in the transport sector.”
“The only infrastructure projects affected are those worth P707 billion, which comprise more than 12,900 projects, most of which fall under the Department of Public Works and Highways (DPWH),” said DBM Undersecretary Goddes Hope O. Libiran.
At the same time, Mr. Balanquit said the budget release could be slower because the adjustments made by Congress under the General Appropriations Act of 2025 will be subject to a process called For Issuance of Special Allotment Release Orders (FISARO) before they are released .
The SARO will only be released once the agencies complete the necessary requirements and obtain approval from the Executive Secretary and the OFFice cream from the president.
“Now the release may not be that important because of the P757 billion [adjustments]which is about 11% or 12% of the total budget. So it is really a large amount,” Mr Balanquit told reporters on January 16.
Last year, most of the national budget was released around the first month without the required conditions.
Meanwhile, former Finance Secretary Margarito B. Teves said public works spending during election years typically drops in April and May because of the 45-day ban.
“However, we consider the impact to be minimal as the national government always seeks to exempt infrastructure projects from the ban, especially those of national importance,” he told. Business world in an email over the weekend.
Mr Teves added that the ban will impact projects at local and district levelels more than those at national level.
“Historically, government spending, and therefore gross domestic product spending, has declined slightly from quarter to quarter, but typically increases in the quarter after the election,” Ateneo Dean Philip Arnold “Randy” P. Tuaño School of Government. told Business world.
He added that the government had already disbursed a “significant amount” of infrastructure projects months before the election period began.
The Comelec has exempted 48 infrastructure projects from the public-private partnership Center such as the Metro Manila Subway Project.
“We expect continued infrastructure growth heading into the May period,” Mr Tuaño said.
For the remainder of 2025, Mr Teves said the level of government spending on infrastructure will largely depend on the improvement of the DPWH’s absorptive capacity to implement projects as it has received more than P1 trillion from the national budget.
“In addition, the frequency and severity of adverse weather events such as typhoons can cause disruptions and delays in the implementation of infrastructure projects, especially those in the heavily affected areas,” he said. — Aubrey Rose A. Inosante