Philippine economic growth may improve in the second half as the government is expected to spend more on infrastructure projects despite the flood control mess that tempered expenditures.

In a Palace press briefing on Thursday, Presidential Communications Office (PCO) Undersecretary and Palace Press Officer Claire Castro said Budget and Management Secretary Kim de Leon emphasized the need to spend more for infrastructure projects to improve economic growth.

Castro explained that because of the flood control controversy government spending on infrastructure projects declined in 2025. Investigation began on who were the masterminds of the mess where billions of pesos were said to have been diverted into kickbacks.

"The government did not spend immediately. It studied things carefully and did not release funds recklessly—this is one of the reasons why the country's economic growth slowed down," she said.

"Now, under the leadership of (DBM) Secretary Kim de Leon, aside from being cautious, it is really necessary to spend—especially on infrastructure. Infrastructure spending has decreased because of the issues surrounding the flood control mess," she added.

When asked if the lower growth forecast for 2026 will drag on until 2028, Castro said growth may improve as the government boosts infrastructure spending.

"What was told to us is that, since infrastructure spending is now improving—you can see it yourselves. So, we expect that in the second half of this year, there will likely be some improvement," she said.

The Development Budget Coordination Committee (DBCC) cut the 2026 gross domestic product (GDP) growth target to 3.5 - 4.5 percent, from the previous target of 5 to 6 percent after the first quarter slowed down to a five-year low of 2.8 percent as the Middle East conflict added to lower government spending. Robina Asido/PHS