Spain's imperial power peaked centuries before and was eclipsed by other Western European powers by the time the war started. It was an undeveloped economy that didn't have much to gain or lose by being involved. Add to that it's being at the other end of the continent buffered by France.

On the other hand Portugal eventually became involved in the war, and this might have been because of its African possessions and connections to British markets... " For the British, the Portuguese were acceptable proxies in the competition with France, Russia and Germany for world domination. For Portuguese governments, the British alliance gave them influence that they could not command themselves" (http://courses.wcupa.edu/jones/his312/lectures/portugal.htm)

That sort of relationship did not exist between Spain and England; the 1373 Anglo-Portuguese Alliance is the oldest treaty in the world apparently, in contrast to the warfare that occurred between England and Spain over the centuries. But the Spanish empire had become exhausted and amputated by the time of WWI.