Elections to impact government spending in 2025

MANILA, Philippines — Midterm elections next year can drag down government spending due to a scheduled mandatory ban on new expenditures, according to the Cabinet-level Development Budget Coordination Committee (DBCC.).

This has prompted the DBCC to urge the timely disbursements  as well as the implementation of programs and projects under the proposed record P6.352 trillion 2025 national budget.

In its 2025 Fiscal Risks Statement Report, the DBCC said government spending has surged this year due to robust investments in infrastructure.

“However, there may be a slowdown in project execution during the first half of 2025 on account of the upcoming midterm national and local elections,” it said.

To mitigate the risk, the DBCC said that timely passage of the 2025 national budget along with early procurement activities before the spending ban will be crucial to sustaining growth.

The government remains focused on adhering to its medium-term fiscal framework (MTFF). It will also prioritize expenditures that align with the policy directions outlined in the Philippine Development Plan 2023-2028.

“The national government shall remain vigilant in monitoring the disbursement program and shall continue advocating for reforms aimed at enhancing government accountability over fiscal resources,” the DBCC said.

According to the report, a key factor contributing to the projected slowdown is the prohibition on the release, disbursement or expenditure of public funds 45 days before the election, except for specific exemptions.

This restriction is expected to delay the implementation of ongoing and planned projects, creating bottlenecks in critical sectors.

Efficiency of agencies in executing their programs and projects, weather disturbances, external developments, supply chain disruptions could also impact government spending.

The 2025 local elections could also negatively impact the plans, programs and projects of local government units, the DBCC said.

“The implementation of programs and projects may be significantly delayed due to political reasons. The new leadership may identify new priorities, allocating a significant portion of the resources to them,” it said.

“The priorities of the local officials may not always align with the policies and programs of national agencies, which may result in undue delays or substantial modifications in the implementation of joint projects,” it added.

Despite these challenges, the government said it is committed to enhance accountability and monitor its disbursement program.

Reforms aimed at improving fiscal resource management will remain a priority to mitigate the impact of underspending or overspending, ensuring that public funds are utilized efficiently.