Corruption is a ‘tax on the poor’: ADB

The Asian Development Bank (ADB), in joining the Philippine financial sector’s push against government corruption, is quite unequivocal about its stand against the major social malaise. 

In a pointed statement made during the ADB’s Anti-Corruption Day at the bank’s headquarters in Mandaluyong City recently, ADB president Masato Kanda described corruption as a “tax on the poor,” even as he emphasized the opportunity cost of stolen funds that should have supported national development.

“Every year, corruption diverts funds meant to pave roads, build schools, and shield the vulnerable from economic shocks,” said Kanda. “The loss of these funds is not an accounting error. It is a tax on the poor that siphons away the future. Without integrity, our work is fragile and short-lived.”

Q3 GDP growth down

In an October Senate budget hearing, then–Finance Secretary Ralph Recto said the country has lost up to P118.5 billion due to anomalous flood control projects. The scandal dragged third-quarter GDP growth down to 4.0 percent because of reduced public infrastructure spending.

ADB recently cut its 2025 and 2026 growth forecasts for the Philippines following the flood control projects corruption scandal. 

In its December update of the Asian Development Outlook (ADO), ADB lowered the 2025 GDP growth projection to 5.0 percent, down from 5.6 percent in September.

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

ADB warned that “uncertainties arising out of investigations of publicly funded infrastructure projects and weather-related disruptions pose downside risks” to the Philippine economy.

The Bank reaffirmed its zero-tolerance policy for corruption and its commitment to strengthening governance and integrity across its operations. 

Business groups condemn corruption in government

Several major business groups — including the Philippine Chamber of Commerce and Industry, the Financial Executives Institute of the Philippines and the Makati Business Club — have likewise issued joint statements condemning corruption in government, ranging from the flood control anomalies to the reallocation of Philippine Deposit Insurance Corporation funds to the National Treasury under former Finance Secretary Recto.

Still, these same groups expressed optimism for a Philippine economic rebound in 2026. “We also recognize that investor confidence is influenced not only by economic fundamentals but also by governance. We therefore urge public institutions to ensure policy stability, uphold the rule of law, and address corruption quickly and decisively,” their statement read.

Last week, the ADB approved two loans totaling $900 million to support the Philippines, while underscoring the private sector’s role in restoring investor confidence amid the corruption allegations facing the Marcos Jr. administration.

“The private sector is an important engine of growth and job creation. Their role in the country’s overall economic development cannot be overstated,” said ADB Country Director for the Philippines Andrew Jeffries. 

“We are committed to assisting the Philippines in finding innovative ways to create an enabling environment that would spur a more dynamic business sector — one that will help drive faster economic growth,” he stressed.