The Asian Development Bank (ADB) has lowered its economic growth forecast for the Philippines.

In the December update of its Asian Development Outlook (ADO), ADB now projects the country’s 2025 gross domestic product (GDP) growth at 5.0 percent, down from the 5.6 percent it forecast in September.

ADB likewise trimmed its 2026 growth outlook from 5.7 percent to 5.3 percent, citing “weak infrastructure spending amid investigations of publicly funded projects, and natural hazards.”

Economic momentum slowed sharply in the third quarter, with GDP expanding only 4.0 percent as public infrastructure spending contracted amid the flood control corruption scandal.

Governance issues

ADB Country Director Andrew Jeffries signaled the downgrade earlier this month, saying the bank was “revising things downward” in light of the governance issues tied to the alleged ghost flood control projects.

The latest revision follows the World Bank’s downgrade of its own Philippine growth projections released Tuesday, cutting its 2025 forecast to 5.1 percent from 5.3 percent, also pointing to weakened investor sentiment stemming from the corruption scandal.

Hitting 2025 growth ‘very unlikely’

The more cautious outlook from both institutions aligns with the Department of Economy, Planning, and Development’s assessment that hitting the government’s 5.5 to 6.5 percent growth target for 2025 is “very unlikely.”

Still, ADB noted that low inflation and ongoing monetary easing should support domestic demand and help drive a stronger rebound in 2026.

“However, uncertainties arising out of investigations of publicly funded infrastructure projects and weather-related disruptions pose downside risks,” the multilateral lender said.