Ex-BSP official: Corruption stalling economic growth

The growth of the Philippine economy hinges on restoring investor confidence through the Marcos Jr. administration’s ability to address corruption within its ranks, according to former Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo.

In a Monday radio interview, Guinigundo — who served at the central bank under the Arroyo, Aquino, and Duterte administrations — said the country’s economic slowdown will persist unless investor confidence is decisively restored.

“Unless the government is able to resolve the problem of corruption and poor governance, it will be extremely difficult to restore the confidence of investors and businesses in our country,” Guinigundo said in Filipino.

“That is why what we should expect this year and in the coming years is a continued slowdown of our economy, and that depends on growth, employment, and the improvement of people’s livelihoods in the Philippines,” he added.

The country’s gross domestic product (GDP) growth slowed sharply in the third quarter to 4.0 percent, after public infrastructure investment contracted by 26.1 percent amid multiple probes into the Department of Public Works and Highways (DPWH) over alleged anomalous infrastructure projects.

BSP Governor Eli M. Remolona Jr. has expressed optimism that the economy could rebound by “the middle of 2026.” However, he has also said that fourth-quarter GDP growth is expected to ease further to around 3.8 percent, marking another decline from the previous quarter’s three-year low.

Recent confidence indicators released by the BSP point to subdued sentiment among both consumers and businesses, largely driven by persistent concerns over governance and corruption within the Marcos Jr. administration. The consumer confidence index remains negative, reflecting pessimism among households. With consumption accounting for 73 percent of GDP as of 2024, weak consumer sentiment poses a significant risk to overall growth.

The issue has been further complicated by renewed scrutiny over the Supreme Court ruling on the return of P60 billion in PhilHealth reserve funds — deemed excessive and ordered remitted to the National Treasury during the tenure of President Marcos Jr. and then-Finance Secretary Ralph Recto. Batangas 1st District Representative Leandro Leviste has alleged that the funds were later classified under unprogrammed appropriations and used for DPWH budget insertions tied to flood control projects on the DAILY TRIBUNE program Straight Talk.

“Why would you even enter an economy or a country when you already know that the funds meant for infrastructure, for public education, and for public health—areas on which human capital development depends, and which determine whether our economy grows or not—are being mishandled?” Guinigundo said.

The ongoing probe into anomalous flood control projects recently scored a win, with the notorious contractor Sarah Discaya and several DPWH officials arrested in December over alleged bribery and malversation related to a substandard flood control project in Davao Occidental.