With only a month and a half left in the year, the problem of unemployment budget execution in the field of public investment once again stands out at the different levels of government.
According to the MEF, as of November 13, 2025, municipalities have only spent 56.3% of their budget on works. In the case of the national government, the participation of said expenditure reached 68.5% and in the regional governments it reached 73.8%.
The comparatively higher level of execution achieved by the regional authorities has led the president of the National Assembly of Regional Governments (ANGR), Koki Noriega, to use it as an argument to prevent the Executive’s austerity plan from taking away their budget.
However, what Noriega has not specified is that the percentage executed in public investment is lower than payroll spending. According to the MEF, to date, regional governments have spent 81.6% of their budget on personnel and obligations.
A similar behavior occurs in the national and local governments, in which payroll spending reaches 78.9% and 78.2%, respectively. That is, the execution of current spending advances at a greater speed than that of spending destined for investment.
Budget grows
Another aspect that the MEF figures highlight is the 82% growth in the budget of local governments assigned to public investment. Even in more than half of the municipalities of the 24 departments and the Constitutional Province of Callao, said allocation increased by more than 100%.
Among these departments, Lima (+143%), Cajamarca (+105%), Ica (+116%), La Libertad (+183%), Junín (+137%), Puno (+125%), Ayacucho (+181%), Huancavelica (+110%), Lambayeque (+122%), Pasco (115.7%) and Callao (+168%) stand out.
What could be the reasons for the increase? According to Carlos Casas, professor at the Universidad del Pacífico, a mainly political logic operates behind these figures.
Casas maintained that many municipalities would be incorporating unexecuted balances from the Foncomún and the canon with the intention of showing activity in the last months of the year. “They are increasing the pie to be able to spend more these months, advance in any way and look good in the photo,” he explained.
He said that this behavior becomes more evident in an electoral context, where local authorities seek to show that “they are starting works” or that they have the capacity to execute. According to the economist, this pattern has been recurring: “December has concentrated up to 40% of the annual investment in some years.”
Casas also warned that this political impulse is reflected in hasty works, aimed more at showing progress than at complete planning.
He mentioned the case of the Vía Expresa del Sur in Lima. He indicated that sections are shown as if they were in operation, but that they are not yet connected, generating bottlenecks. The logic, he pointed out, is similar in other projects: “You start doing it in any way, at least start, and they can stay there.”
For Casas, these dynamics generate risks. The budget increase could be directed towards minor works or rapid interventions, such as the Investment in Optimization, Marginal Expansion, Rehabilitation and Replacement (IOARR), whose impact is visible, but whose quality is not always guaranteed. Furthermore, the high increases in departments with a strong local political presence suggest that some budget decisions could be linked to alliances or campaigns, which would complicate the planning of sustainable investments.
Data
From 2026governments will increase their income from the Municipal Compensation Fund (Foncomun).
In Madre de Dios Local governments only executed 35% of their budget in public investment.
Cusco executed 65% of your investment spending.
The Municipality Morropón District (in Piura) only executed 15% of its budget.
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