The administration of President Ferdinand R. Marcos Jr. has officially failed to lift the country’s economic growth prospects for a third consecutive year, pushing Philippine economic growth to a 14-year low following the release of 2025 gross domestic product (GDP) data on Thursday.

In a joint press conference by the Philippine Statistics Authority and the Department of Economy, Planning, and Development (DEPDev), the PSA reported that fourth-quarter GDP growth plunged to 3.0 percent, far below the already downgraded 3.9 percent posted in the previous quarter.

Slowest growth rate

Growth from October to December dragged full-year 2025 GDP growth to 4.4 percent, well short of the administration’s 5.5 to 6.5 percent target range and the slowest annual growth rate since 2011, which also recorded 4.4 percent.

GDP growth measures the total value of goods and services produced in an economy over a given period and serves as a key benchmark of economic performance. Growth had already missed targets in previous years — settling at 5.7 percent in 2024 against a 6.0 to 6.5 percent goal, and 5.5 percent in 2023 versus a 6.0 to 7.0 percent target — shortfalls previously attributed to external shocks such as the lingering effects of the Covid-19 pandemic, natural disasters, and global geopolitical uncertainty.

On Thursday, DEPDev Secretary Arsenio Balisacan cited adverse weather disruptions that affected class and work schedules, as well as ongoing global economic challenges, as contributing factors to the slowdown.

Drag on growth stemmed

from domestic factors

However, he acknowledged that in 2025, the drag on growth largely stemmed from domestic factors — particularly the contraction in infrastructure spending following the “floodgate” corruption scandal.

“This outcome reflects several converging factors. These include the adverse effects of weather and climate-related disruptions, … as well as measures we are taking to ensure that only the right infrastructure projects move forward,” Balisacan said.

“Admittedly, the flood control corruption scandal also weighed on business and consumer confidence,” he added. “Public and private construction, as well as private consumption were particularly affected during [the fourth quarter].”

The scandal, which erupted in late July 2025, implicated senior government officials, including the President himself. While GDP growth in the first half of the year averaged a modest 5.5 percent, within the lower end of the target range, growth slumped to an average of 3.5 percent after the controversy surfaced—representing trillions of pesos in lost economic output.

Probe had to be undertaken

“While these developments [have] weighed on short-term growth, the Marcos administration emphasizes that the investigations into the flood control corruption controversy had to be undertaken,” Balisacan said.

Latest Department of Budget and Management (DBM) data show that as of October 2025, public infrastructure investment had contracted by 29.4 percent since the President flagged anomalous flood control projects during his State of the Nation Address in late July, translating to roughly P27.4 billion in foregone spending.

The government had earlier promised that so-called “big fish” behind the scandal would be detained by Christmas, but by yearend, only the Discaya couple had been jailed.

Last week, former Senator Bong Revilla surrendered after the Office of the Ombudsman issued a warrant for his arrest on charges of graft and malversation related to a P92.8-million ghost flood control project in Pandi, Bulacan.

Former DPWH Secretary Manuel Bonoan, under whose tenure the alleged anomalies began, resurfaced after fleeing to the United States with his wife. During the resumption of the Senate Blue Ribbon Committee probe, Bonoan said flood control data submitted to Malacañang originated from the office of the late Undersecretary Maria Catalina Cabral, placing the controversial “Cabral files” at the center of the information pipeline reaching the President. Despite being subpoenaed, Bonoan has not been formally charged.

Zaldy Co’s whereabouts unknown

Meanwhile, the whereabouts of fugitive former congressman Zaldy Co remain unknown. In a series of video exposés, Co alleged that President Marcos Jr. masterminded the scheme, claiming that about P100 billion in flood control budget insertions were carried out under his orders.

The release of Co’s first video sent the Philippine Stock Exchange Index plunging to 5,584.35, near levels last seen during the height of the Covid-19 market crash in May 2020.

Balisacan sought to reassure the public that ongoing investigations and governance reforms would help restore growth.

“The resulting measures and governance reforms are necessary to strengthen accountability, improve project quality, ensure better value for scarce public resources, and build our capacity for faster and more sustainable growth in the years ahead,” he said.

Opportunity to boost growth

He added that the Philippines’ 2026 ASEAN Chairship presents an opportunity to boost growth through tourism and foreign direct investments (FDIs), which have fallen by nearly 40 percent since July 2025 — roughly $2 billion or P118 billion lost amid the scandal.

“Looking ahead, we see 2026 as our rally point. We are accelerating efforts to restore public trust through improvements in governance and public services — improvements that Filipinos can see and feel in their everyday lives,” Balisacan said.

“In infrastructure, we are resuming and accelerating the completion of public works while enforcing stricter anti-corruption safeguards. At the same time, we are pursuing long-term and high-impact reforms in infrastructure development planning, guided by comprehensive, science- and technology-based master plans,” he added.