The 'anti-investment' tax: Corruption as top barrier to foreign funds

Pervasive corruption in the Philippines is preventing the country from realizing its full economic potential, despite President Ferdinand R. Marcos Jr. making "steady progress" on his reform agenda, according to the think tank Capital Economics.

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In its Asia Economic Outlook report for the fourth quarter of 2025, Capital Economics said that while the midterm of the Marcos Jr. administration saw the passage of key reforms aimed at improving the ease of doing business and infrastructure development in the country, "corruption and political instability remain a concern for foreign investors."

"Unless these areas are addressed, the Philippines risks not fully capitalizing on the significant opportunities arising from the realignment of global supply chains driven by United States (US)-China decoupling," Capital Economics warned in its Sept. 25 report.

Finance Secretary Ralph G. Recto, who heads the economic team, had lamented that the Philippine economy could have grown by six percent if flood control projects had not been hijacked by corruption, resulting in a loss of as much as P119 billion in economic output.