Slowdown revives 'sick man' fears

The Philippine economy is confronting a familiar specter of stagnation as the administration of President Ferdinand R. Marcos Jr. grapples with a sharp slowdown, echoing the period of malaise that marked his father’s strongman rule decades ago.

- BY DERCO ROSAL

Economic growth in the fourth quarter of 2025 tumbled to three percent, a figure that shocked policymakers and revived the “sick man of Asia” narrative. For the full year, output expansion averaged 4.4 percent, falling significantly short of the government’s minimum target of 5.5 percent.

Excluding the pandemic years, 2025 marked the weakest economic performance since 2011—a period of déjà vu recalling the early term of former President Benigno S. Aquino III, whose aggressive anti-corruption campaign similarly constrained fiscal spending.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan admitted on Thursday, Jan. 29, that the severity of the deceleration caught the government off guard.

“To be honest, I did not expect this sharp [moderation]. I expected that there would be a slowdown as a consequence of the measures that we are putting in place,” Balisacan told reporters, referring to ongoing reforms targeting systemic corruption.

The primary culprit appears to be a paralysis in state spending. In a Jan. 29 commentary, Salceda Research chair Joey Sarte Salceda noted that while a slowdown was anticipated, the reality was closer to a standstill.