MBC warns Marcos economy losing steam after GDP slump
The third-quarter slump in gross domestic product (GDP) growth may signal that the Philippine economy is losing momentum as the prolonged decline in public infrastructure investment compounds the effects of adverse weather disturbances and the global energy shock, Makati Business Club Executive Director Julia Abad said.
“The reported 2.1% GDP growth in the third quarter is a clear warning that the Philippine economy is losing momentum, as persistent inflation, declining purchasing power, weak investment, and rising business costs weigh on economic activity,” she said in a Monday statement.
“These challenges will be further compounded by the looming Super El Niño, which threatens agricultural production, water and power supplies, and food security,” she added.
The Philippine Statistics Authority reported that GDP growth slowed for a fifth consecutive quarter to 2.1 percent in the third quarter of this year, the weakest expansion since the fourth quarter of 2009, excluding the pandemic years. Economy, Planning and Development Secretary Arsenio Balisacan attributed the slump to higher prices brought about by the Middle East conflict, weather disturbances during the rainy season, and a lingering decline in public investment following last year’s flood control scandal.
Abad said the latest growth figure should serve as an opportunity to address the economy’s underlying weaknesses rather than rely on short-term measures to cushion the slowdown.
“While attracting investments, restoring business confidence, and accelerating infrastructure development remain critical, we must address the underlying constraints to our competitiveness, including workforce readiness, energy affordability, infrastructure gaps, regulatory predictability, and institutional stability,” she said.
Balisacan acknowledged that the slump reflected continued public distrust in governance following last year’s flood control scandal, calling for efforts to ramp up infrastructure investment while restoring confidence in the economy through greater transparency, particularly in the national budget, which has come under scrutiny since the controversy broke.
“We will work with Congress to secure timely pass-aids of the national budget. A credible fiscal program must protect productive infrastructure and essential social services, supported by better revenue collection and reduced waste,” he said.
“Fiscal consolidation must preserve spending that expands productive capacity. Repeatedly cutting sound investments would weaken future growth,” he added.
Abad echoed the call for long-term reforms, arguing that the response to the economic slowdown should go beyond social subsidies or “ayuda” handouts and address the structural problems holding back growth.
“Good governance and effective public institutions are essential to ensuring that resources are used efficiently and deliver tangible economic and social benefits,” she said.
“Ultimately, the policy response must go beyond stimulating economic activity and attracting investments. It must strengthen governance, institutions, and policy execution while translating growth into more resilient livelihoods, quality jobs, higher incomes, and a more competitive, job-generating, and inclusive economy.”