Flood control scandal could weigh on PHL growth - BMI

THE PHILIPPINES' economic growth outlook for 2025 and 2026 could weaken as a widening flood control corruption probe erodes business confidence and dampens infrastructure spending, Fitch Solutions unit BMI said.

- - A.M.C. Sy

"For now, we are maintaining our growth forecast due to further monetary easing ahead, but risks to growth are tilted to the downside," BMI Asia Country Risk Analyst Brandon Ong said in a webinar on Thursday.

The challenge will be containing the impact on business confidence from governance issues linked to infrastructure spending, he added.

The country’s gross domestic product (GDP) expanded by an average of 5.4% in the first half of 2025. BMI expects full-year growth to hold at 5.4%, missing the government's 5.5% to 6.5% target.

For 2026, the firm projects GDP growth to ease further to 5.2% as corruption concerns and slower public investment weigh on sentiment.

Mr. Ong noted that infrastructure spending could remain weak in the coming quarters as fiscal authorities tighten oversight of projects.