During the term of the late President Benigno “Noynoy” Aquino III, most growth indicators were flashing green — except for public spending, which lagged notably in the aftermath of the P10-billion pork barrel scam.

In the latter half of his administration, budget underspending was estimated at 13 percent of the gross domestic product in 2014 and 12 percent in 2015. An estimated P1 trillion in unused funds stifled growth, leading to the economy’s underperformance amid sluggish public spending.

It was then that the chilling effect of the Priority Development Assistance Fund (PDAF) mess led to a pullback in public spending as stricter checks were applied to government contracts.

The situation has returned as a result of a larger scandal — the flood control controversy — which involved amounts that made the PDAF scam look like stealing a lollipop from a child.

Growth is back at the laggard below 4 percent last quarter due to reduced infrastructure outlays, which economic managers traced to the investigations underway.

Regional analysts are now weighing the impact of corruption on the economy, worsened by the pullback in government spending, a key driver of growth.

Public spending was down 10 percent by the end of September, which economists say was both massive and swift in stifling growth.

Economists use late July, after President Ferdinand Marcos Jr. blurted “Mahiya naman kayo” (“Have some shame”) to legislators during the State of the Nation Address, as a reckoning point for the start of the corruption scandal.

The economic blow is just beginning and is expected to worsen in the coming quarters.

“Low government spending could linger for a while, maybe three or four months down the road, uh, and it could get worse if or it could get extended if we see a delay in the budget enactment,” an economist at Japanese financial services firm Nomura said.

The fiscal expert added that the weakening of the peso signals that capital is also flowing out.

When the domestic economy falters amid a global recovery, capital outflows are inevitable, with investors withdrawing funds primarily from equity markets, especially the stock market.

Based on estimates of economic managers, P157 billion in projects were underspent in the third quarter, resulting in a slowdown mainly in the construction sector.

The solution being put forward is to infuse P1.3 trillion in programmed spending for the final quarter — too late in the year.

Moreover, the bulk of the supposed stimulus fund will go to ayuda or cash doles that have only a fleeting effect on perking up economic activity.

The flood control scandal must see a definite resolution that includes the prosecution of top officials involved, or growth will continue to stall.

It is unsettling that the economy once again treads on dangerous ground — conditions reminiscent of those that preceded the 1986 People Power Revolution.

Those in leadership must act swiftly and decisively, or risk inviting another historic upheaval.