Political risk clouds economy

Our economy had been showing lackluster growth over the past years with major festering structural problems that constrain our export, agriculture and manufacturing sectors.

- BOO CHANCO

The corruption scandal has caused a slowdown in growth in 2025 and is projected by some analysts to temper growth in 2026 and beyond. Even domestic consumption, our usual reliable economic engine, moderated in the last quarter.

The corruption scandal is also eroding our ability to attract job-generating foreign investments. FDI inflows fell by 40.5 percent year-on-year in August and showed signs of further deterioration ahead.

That’s because political risk has increased significantly. Analysts here and abroad are widely saying that it is a significant drag to Philippine economic growth in 2026, unless the government can restore credibility and ensure transparent, efficient public spending.

But of course! How can investors, foreign and even local, feel safe to risk their capital when the scandal has, of late, tainted even the President himself? So much mud has been thrown around over the past few weeks damaging reputations or what little of it our politicians have.

The recent claims of former congressman Zaldy Co that BBM not only knew but participated in the budget insertions drama, is very damaging.

Of course, Co’s credibility is also questionable but as one of my colleagues in a Viber Group, a former bureaucrat, commented: “Zaldy Co’s revelation is NOT unthinkable and NOT unrealistic. That’s the way budget priorities for the pork barrel of ALL congressmen are included in the GAA.

“The Appropriations chairman is the main channel of pork barrel projects with the blessing of the Speaker, the closest/most influential person to the President and the gatekeeper for projects. This is the way the administration or the President has been able to control the congressmen ever since...”