MANILA, Philippines — President Ferdinand Marcos Jr. is betting on a sharp acceleration in government spending in the final quarter of 2026, saying the administration is confident it can catch up with and even surpass last year’s public spending level.
Speaking at the Foreign Correspondents Association of the Philippines (FOCAP) Presidential Luncheon on Friday, Marcos acknowledged that government expenditures were delayed earlier in the year but said corrective measures have significantly narrowed the gap by the end of the second quarter.
“We will be, I am confident, we will be able to catch up and exceed the year-on-year public spending by the last quarter of this year,” Marcos said.
Why government spending slowed
According to Marcos, the slowdown was partly caused by a closer review of the previous year’s national budget.
Normally, projects under the National Expenditure Program are prepared and bid out before the start of the fiscal year so implementation can begin once the budget takes effect. But the administration’s review pushed the bidding of some projects toward the end of the first quarter of 2026, delaying actual disbursements.
The President said the government subsequently introduced measures to accelerate spending and narrow the gap.
The Department of Budget and Management has separately projected P6.47 trillion in national government disbursements for 2026, equivalent to about 21.2 percent of GDP. The revised fiscal program also puts the 2026 deficit at roughly P1.66 trillion, or 5.4 percent of GDP.
The government’s original 2026 budget program was also designed around increased spending for social and economic services, including education, health and infrastructure.
The bigger economic problem: growth has weakened
Marcos’ spending projection comes at a critical moment for the Philippine economy.
The country’s economy expanded by only 2.3 percent year-on-year in the second quarter of 2026, its weakest quarterly growth since 2021, according to recent economic data cited by Reuters. First-half growth reached just 2.6 percent, below the government’s revised full-year target of 3.5 to 4.5 percent.
That makes faster public spending more than simply a budget-execution issue. The administration is also counting on government expenditure—particularly infrastructure and other productive investments—to help revive economic activity.
Malacañang had already pointed to infrastructure spending as an important potential growth driver earlier this year after the economy recorded weaker-than-expected performance.
From spending freeze to spending acceleration
The government’s cautious approach to public works spending followed intense scrutiny over alleged irregularities surrounding flood-control and infrastructure projects.
The controversy contributed to a slowdown in public construction activity and weighed on economic growth. Earlier reports linked the infrastructure controversy and the resulting suspension or review of projects to weaker economic performance.
The administration has since emphasized tighter safeguards, greater transparency and closer monitoring of government funds.
In June, Marcos launched DBM COMPASS, a centralized platform intended to make information on appropriations and government spending more accessible while strengthening transparency and accountability.
A P7.2-trillion budget is already waiting in the wings
The spending push also comes as the administration prepares for the next fiscal year.
Marcos has proposed a P7.2-trillion national budget for 2027, about 6 percent higher than the current year’s budget. Reuters reported that the proposal is intended in part to help restore economic momentum after the slowdown in infrastructure investment and domestic demand.
This creates an important test for the administration: it must accelerate 2026 spending without sacrificing the scrutiny and safeguards that were introduced after the infrastructure controversy.
The Q4 race
The President’s statement is therefore both an economic forecast and a challenge to his government’s spending agencies.
If implementation accelerates as promised, a stronger fourth quarter could provide a much-needed boost to construction, infrastructure activity, government consumption and related sectors.
But simply releasing more funds will not automatically translate into stronger economic growth. The quality, timing and actual implementation of projects will matter just as much as the amount spent.
For now, Marcos is confident that the spending gap can be closed before 2026 ends.
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