Spending bottleneck slows growth

The Marcos Jr. administration's pivot toward stricter budget oversight and institutional reform is creating a persistent fiscal drag that threatens to pull economic growth below four percent by the end of 2025, according to HSBC.

- 

During a roundtable with the media on Tuesday, Jan. 13, HSBC Southeast Asia economist Aris Dacanay cited that public infrastructure spending, a traditional engine of the country's economy, fell 40 percent year-on-year in the third quarter of 2025.

Dacanay explained that this "spending choke" is not a temporary glitch but a structural shift that could weigh on output for the next two to four years, potentially outlasting the current administration.

The slowdown in disbursements stems from heightened due diligence and more rigorous scrutiny of state-funded projects. While these reforms aim to improve the quality of public investment, the immediate result is a bottleneck that makes the government's growth targets increasingly elusive.