Corruption slows PH’s 2025 growth

resident Ferdinand R. Marcos Jr.’s chief economic manager said Philippine growth might have slowed in the third quarter of the year, which he sees stretching through early 2026, due to the moderation in flood control infrastructure spending.

- By DERCO ROSAL

Department of Finance (DOF) Secretary Ralph G. Recto told senators during the Senate finance subcommittee’s briefing on the agency’s 2026 budget proposal that the country’s gross domestic product (GDP) could have moved at a sluggish pace.

“There’s a possible slowdown in growth in the third quarter because of all the reforms being initiated by our President to ensure that taxpayers’ money is spent properly in executing the budget as well,” Recto said on Tuesday, Oct. 14.

If government spending moderates, Recto said there could be a slowdown in local output expansion.

For the full-year 2025 growth target, Recto conceded the Philippines may miss even the lower end of 5.5 percent. “We could miss it, we could hit 5.4 percent.”

He added that another interest rate cut by the Bangko Sentral ng Pilipinas (BSP), which could help accelerate growth, stands as a possibility after the latest reduction in the policy rate to 4.75 percent.

While Recto believes this economic slowdown could pan out until early next year, growth is expected to accelerate beginning the second quarter of 2026. He is upbeat that the government will “fix the problem” tied to corruption in government spending.

“Moving forward, we will realize the full potential of growth. Based on our demographic data and stable macroeconomic environment, the economy could easily grow anywhere from six to seven percent,” Recto said.

“We just need to make sure that we execute the budget properly and spend the people’s money correctly,” he added.

Last month, Recto lamented that the Philippine economy could be growing 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.