Philippines Budget Release Rate Hits 88% Amid Underspending Concerns

The Department of Budget and Management (DBM) has announced that the Philippines' budget utilization rate for 2026 stood at 87.9% as of the end of June. This translates to P5.97 trillion in released funds out of an original total budget of P6.79 trillion, leaving P819.49 billion yet to be disbursed. The release rate at the end of last month is currently trailing behind the pace set in the previous year, which was 90% for the same period. Releases to government agencies and departments amounted to P3.34 trillion by the end of June, representing 90.9% of their total allocations. This figure is also lower compared to the 94% recorded in the same period last year. Special-purpose funds released by the end of the month totaled P477 billion, accounting for 66.3% of their total allotment. Automatic appropriation releases, on the other hand, reached P2.15 trillion, marking an 89.8% utilization rate. These include significant allocations such as the National Tax Allotment (P1.19 trillion), interest payments (P712.5 billion), and the Block Grant (P93.98 billion). Michael L. Ricafort, Chief Economist at Rizal Commercial Banking Corp., commented that the current allotment rate reflects ongoing government underspending. He attributed this to a combination of factors, including concerns over anomalous flood control projects and a general cautiousness to prevent corruption, which he described as a matter of prudence. Ricafort anticipates that the disbursement rate will accelerate in the latter half of the year as the government ramps up its spending on infrastructure projects. Efficient and timely government spending is a key driver for economic expansion in the Philippines. Source: BusinessWorld Economy