Corruption blight guts growth goals: targets missed yearly under Marcos

The economy will miss its 2025 growth target, the country’s top economist said, mainly due to the effects of the raging political conflict on business sentiment. 

Should the full-year growth fall below the low-end 5.5-percent target, 2025 would mark the third consecutive year the government has missed its economic goal under President Ferdinand R. Marcos Jr.

Department of Economy, Planning and Development (DEPDev) Secretary Arsenio M. Balisacan said the scaled-down 5.5 to 6.5-percent gross domestic product (GDP) goal likely will not be achieved.

“Honestly, that’s very unlikely now. We need to grow roughly seven percent in the fourth quarter to achieve a 5.5-percent growth for the year, and given the situations and the data that are coming out, that’s quite unlikely,” said Balisacan in a Monday press briefing.

According to Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, a 5-percent growth rate in 2025 is more achievable.

“Weather-related disruptions by “Tino” and “Uwan” in early November could lead to slower gross domestic product growth, but it will be offset by Christmas holiday-related spending,” Ricafort said.

Floodgate submerges dev’t hopes

Growth was only at 5.6 percent in 2024 — below the 6 to 6.5-percent goal — and 5.5 percent in 2023 against the 6 to 7-percent target. 

While these earlier misses were attributed to the lingering effects of the pandemic, natural disasters, and overly optimistic projections, today most Filipinos point to the floodgate scandal as the primary cause for this year’s sharp economic slowdown.

The government last June revised its 2025 growth target downward, from a range of 6 to 8 percent to 5.5 to 6.5 percent, through the Development Budget Coordination Committee (DBCC), citing global uncertainty, the conflicts in the Middle East, and the new tariffs of the Trump administration. Third-quarter GDP growth weakened to four percent, the lowest since the Covid-19 pandemic.

President Marcos recently met with Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. during which both acknowledged that the tepid growth was primarily driven by the corruption allegations in Department of Public Works and Highways (DPWH) flood control projects, an issue that was flagged by Marcos himself.

At the meeting, Marcos reiterated his belief that the economy will rebound in 2026, noting that inflation remains below target at 1.7 percent, giving the BSP room for a rate cut to stimulate growth if timed correctly.

Meanwhile, Balisacan said the economy averaged five-percent growth from January to September. Despite the political and economic turbulence, he said the government aims to maintain this momentum.

“If we can sustain five percent for the year, that’s still, to me, quite respectable. We intend to move back to the top tier of the target range,” he added.

President Marcos has repeatedly called economic development the central pillar of his administration. However, the political fallout from the floodgate scandal — now considered the largest corruption scandal in Philippine history — has soured investor sentiment, crippled the local currency, and sparked widespread public outrage, demanding accountability and reforms from the administration.

Trail leads to Malacañang

Mr. Marcos himself was accused by former Congressman Zaldy Co of inserting P100 billion in the national budget that was linked to ghost flood control projects, fueling the public outrage and deepening the economic uncertainty.

Balisacan acknowledged the impact of the political turmoil and underscored the need to shield the economy from further damage.

“Amid these governance issues, it is imperative that while we pursue transparency and accountability, we ensure that the economic gains we have reaped over the years are not only protected but sustained and deepened,” he said.

“Only by keeping our growth momentum through steady and sound economic policies, and with a steadfast commitment to uplift the lives of ordinary Filipinos, can we earn and maintain our people’s trust in the government,” the DEPDev chief said.

The holiday season typically brings higher consumer spending, driven in part by increased dollar remittances from overseas Filipino workers. 

With the Philippine economy heavily dependent on consumption and remittance inflows, all eyes are now on the President as the country positions itself for a potential rebound in 2026.