The Philippines economy grew at just 4.4% in 2025, marking its slowest expansion since 2011, excluding the pandemic slump. This is well below the projected 5.5–6.5% and highlights the toll of corruption scandals and climate-related disruptions.
Economic Planning Secretary Arsenio Balisacan said the fraud over bogus flood control projects sharply hit construction spending and investor confidence. The scandal has implicated officials, lawmakers, and construction firms, slowing public projects that could have boosted GDP by 1.1 points.
Additionally, climate-related events, including nationwide floods and heatwaves, reduced productivity, school attendance, and domestic consumption. Despite the grim figures, reforms stemming from the scandal aim to strengthen governance, improve accountability, and restore investor confidence.
Analysts, however, remain cautious. Capital Economics predicts soft growth for 2026, around 4.5%, below the 5.3% consensus, while signaling possible interest rate cuts to stimulate the economy.
The Philippines now faces the challenge of restoring growth momentum while implementing governance reforms to prevent similar scandals and economic setbacks.
#PhilippinesEconomy #EconomicGrowth #GDP2025 #InfrastructureScandal #ClimateImpact #InvestorsAlert #MarcosAdministration #AsianMarkets #PhilippinesNews #GlobalEconomy
