Amid the corruption mess, Japan, Canada, and the EU have affirmed their trust in the Philippines!
Despite recent corruption scandals in public works, envoys from Japan, Canada and the European Union said investor confidence and free trade negotiations in the Philippines remain intact, citing strong monitoring mechanisms and viable government action against corruption.
International bodies like the World Bank and International Monetary Fund (IMF) generally maintain an optimistic outlook for the Philippines, forecasting growth rates between 5.3 percent and 6.2 percent for 2025, positioning the country as one of the fastest-growing economies in Southeast Asia.
President Ferdinand Marcos Jr. has ordered investigations into the corruption scandal, and various agencies are implementing reforms to ensure accountability and improve public financial management.
Recto’s economic plan
Finance Secretary Ralph Recto’s economic plan focuses on increasing investment through public-private partnerships, improving tax and non-tax collections, and ensuring fiscal sustainability.
His priorities include strengthening the investment climate by creating a multi-sector working group to address private sector concerns, digitalizing government processes for efficiency, and aligning spending with the national development plan to support inclusive growth.
The plan also emphasizes boosting the economy by promoting skills for new industries, supporting workers affected by calamities, and ensuring that government spending is directed towards high-impact projects.
How has the economy been under Recto’s plan?
As of November 2025, the national government describes the economy as strong and resilient despite a recent slowdown. Key indicators show mixed signals with the government actively implementing fiscal and monetary policies to address challenges and restore confidence.
Economic status and key indicators: The economy grew by 4.0 percent in the third quarter of 2025, the slowest growth since the first quarter of 2021, and below both market expectations and the government’s target range.
The year-to-date average growth for 2025 stands at 5 percent. Growth was primarily driven by the services sector and household consumption, though both slowed down from the previous quarter.
Inflation is manageable and within the government's target range of 2-4 percent in October 2025, the inflation rate was steady at 1.7 percent the same as September, allowing the Bangko Sentral ng Pilipinas (BSP) to cut its key interest rate to 4.75 percent to stimulate the economy.
The labor market has improved, with the employment rate at 94.7 percent as of July 2025. Job gains were primarily in administrative support, transport, health, manufacturing, and education.
While the country’s BoP recorded an eight-month-high surplus of $706 million in October 2025, persistent trade deficits, tariff policies, and higher global uncertainty reversed the 10-month BoP to a deficit of $4.609 billion.
The national debt remains a concern with the debt-to-GDP ratio having exceeded the internationally accepted 60-percent threshold during the pandemic era. The government is pursuing a fiscal consolidation path to gradually reduce the deficit and debt.
The slowdown in the third quarter of 2025 was attributed to a major corruption controversy that led to a sharp decrease in public infrastructure spending, as well as the impact of recent typhoons. In response, the government is taking several remedial measures.
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