The fallout from the flood control scandal will continue to weigh on the Philippines’ gross domestic product (GDP) into 2026, according to Malayan Banking Berhad (Maybank) Investment Banking Group Economist Azril Rosli, who spoke during a Tuesday webinar.
Rosli said Maybank has cut its GDP growth forecasts for the Philippines in both 2025 and 2026, largely due to the corruption scandal confronting the Marcos Jr. administration.
“We did some quantification on the impact of the [flood control scandal]. Based on the quantification, we actually revised our GDP growth for the Philippines to 4.8% in 2025 and to 4.9% in 2026,” Rosli said, noting that the projections fall 1.0 to 1.5 percentage points below the national government’s growth targets for both years.
Rosli added that Maybank’s previous forecasts stood at 5.6 percent for 2025 and 5.8 percent for 2026. With the revised outlook, Maybank joins a growing list of institutions downgrading the Philippines’ growth prospects following the floodgate scandal. The downward adjustments—0.8 percentage points for 2025 and 0.9 percentage points for 2026—are among the steepest cuts issued by any bank or international organization so far.
For comparison, Standard & Poor’s (S&P) earlier downgraded its 2025 growth forecast by 0.8 percentage points, while multilateral lenders such as the World Bank, International Monetary Fund, and Asian Development Bank have also trimmed their projections, citing reduced public infrastructure spending—an assessment Rosli said is reflected in Maybank’s revised forecasts.
“I think predominantly, the important significant features that we are looking at is the flood control spending cuts, as well as the broader Department of Public Works and Highways budget consolidation. We thought that the quantification is expected to derail the government's medium-term economic targets,” he said.
Data from the Department of Budget and Management (DBM) show that as of October 2025, public infrastructure investment had contracted by 29.4 percent since President Ferdinand R. Marcos Jr. flagged anomalous flood control projects during his State of the Nation Address in late July, translating to roughly P27.4 billion in foregone spending.
From January to October 2025, infrastructure and other capital outlays declined by 13.1 percent to P943 billion, down from P1.09 trillion in the same period last year.
Asked by DAILY TRIBUNE about the potential economic impact of the impeachment complaint filed against President Marcos Jr. on Monday—alleging that he benefited from kickbacks linked to anomalous flood control projects—Rosli said the effects are likely to remain contained.
“At this stage, the economic and market impact is expected to be limited. The Philippines has strong institutional processes, and impeachment proceedings follow a clear constitutional framework which helps contain uncertainty and prevent policy disruption,” Rosli said.
“And from an economic standpoint, I think the policy continuity remains intact. Key macroeconomic priorities, such as inflation management, fiscal consolidation, and infrastructure development are driven by established institutions,” he added.
The government has earmarked P1.3 trillion for infrastructure spending in 2026 to address the backlog caused by the floodgate scandal. Department of Public Works and Highways Secretary Vince Dizon earlier said around P200 billion to P250 billion will be disbursed for infrastructure projects in the first quarter of the year.
Rosli said he expects the long-term impact of the scandal to be relatively manageable, provided decisive action is taken.
“I don't think that it will persist in the longer term. It depends on whether the government has taken on positive, proactive actions to actually solve the issue of the unresolved flood control scandal,” he said.
“The risk that it could influence the economic trajectory, it could be lesser if, let's say, the situation has been resolved by the government, and I think the government has also been proactive to actually improve the situation,” Rosli added.
Earlier that day, Dizon testified before the Sandiganbayan, saying the government’s evidence against those allegedly responsible for a P289-million substandard road dike project in Oriental Mindoro is “rock solid.”
Meanwhile, former Senator Bong Revilla surrendered to authorities to face graft and malversation charges linked to an alleged P92.8-million ghost flood control project in Pandi, Bulacan. As of press time, Revilla remains detained at the Quezon City Jail in Payatas, despite posting bail.