Corruption, storms weaken economy

While private consumption sparks a ray of light in the dimming economy, persistent domestic governance concerns in flood control projects, recent destructive typhoons, and United States (US) tariffs are blocking a brighter trend.

- By DERCO ROSAL

As such, Singapore-based DBS Bank Ltd. has adjusted downward its full-year 2025 gross domestic product (GDP) growth forecast for the Philippines from 5.3 percent previously to 4.7 percent, matching the Department of Finance’s (DOF) lowered expectation.

“As it stands, growth was expected to moderate in the rest of 2025 and next year due to a confluence of domestic and external headwinds, including the impact of typhoons, domestic governance issues (corruption issues from flood control projects), slower fiscal expenditure, and the impact of US tariffs,” read DBS Group Research’s report published on Nov. 18.

From muted growth this year, DBS anticipates economic expansion to crawl at five percent in 2026 through 2027—both of which fall extremely hard below the existing yearly target of six to seven percent until 2028.

“Consumption demand should make up for part of the downside, with real purchasing power benefiting from softer inflation, a low unemployment rate, and loose financial conditions,” the report read.