ADB to cut Phl 2026 forecast following floodgate scandal

The Asian Development Bank (ADB) will revise its 2026 economic forecast for the Philippines downward following the third-quarter slowdown triggered by the floodgate scandal.

In an interview at Dusit Thani in Makati on 4 December, ADB Country Director Andrew Jeffries confirmed that the multilateral lender will cut its growth projections for both 2025 and 2026 in its upcoming Asian Development Outlook report.

“We are revising things downward,” Jeffries said, emphasizing that “in light of” the ongoing governance issues tied to the anomalous flood control project scandal, the ADB would be lowering its estimates for the current year and the next.

In its September outlook, the ADB projected 2025 growth at 5.8 percent — within the government’s target of 5.5 to 6.5 percent. But the third quarter saw a sharp deceleration, with gross domestic product (GDP) plunging 1.5 percentage points to 4.0 percent. The downturn was driven largely by a collapse in public construction after authorities suspended and reviewed flood control programs implicated in the corruption controversy.

The ADB previously forecast 2026 growth at 5.6 percent, below the government’s 6 to 7 percent target. Jeffries confirmed that this projection will also be revised downward.

Despite the headwinds, Jeffries said the ADB expects a relatively quick recovery once confidence stabilizes and government spending resumes.

“We think it's going to recover faster than that. So we predict, and I think it's consistent with what we've seen from others today, that next year there will be growth compared to this year,” he said.

His remarks echo those of Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr., who last week said the economic rebound should begin by mid-2026. “The recovery should start by 2026, maybe [the] middle of 2026, and then we should be back on track by 2027,” Remolona said.

Jeffries also stressed that restoring investor confidence hinges on meaningful reforms and accountability for those involved in the floodgate scandal.

“I mean, of course, accountability is part of any kind of legal system,” he said. “I guess it's not necessarily, you know, all a consistent story on sentiment. But what can the government do about it, I think, is just take the concerns seriously and push forward with some of the changes and reforms and improvements that have been talked about.”

The updated Asian Development Outlook will be released on Wednesday, 10 December — one day before the BSP’s Monetary Board convenes for its policy meeting.