Scandal sinking domestic growth

Amid a deepening corruption scandal ensnaring the Marcos Jr. administration, a series of mass protests against the government could further weaken the economy, according to London-based think tank Capital Economics.

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In the Philippines, “unrest could further dampen economic activity, which is already suffering after the government halted public infrastructure works on the back of the corruption allegations,” Capital Economics deputy chief emerging markets (EMs) economist Jason Tuvey said in a Nov. 21 report.

The think tank noted that the flood control corruption scandal contributed to the sharp slowdown in third-quarter gross domestic product (GDP) growth, which fell to just four percent year-on-year, marking a 4.5-year low.

The latest Department of Budget and Management (DBM) data released over the weekend showed that infrastructure spending plunged by 30.7 percent to P256.9 billion in the third quarter from P370.6 billion in the same period last year. Infrastructure disbursements from July to September—when flood control corruption came to light—were also 32.9-percent lower than the P382.6-billion spending planned for the three-month period.