The country director of the Asian Development Bank, Andrew Jeffries, said that the economic impact of the widening corruption scandal may show up in the lender’s updated growth forecasts for the Philippines, as intensifying scrutiny could slow the government’s infrastructure push.
Jeffries said that the fallout is still difficult to quantify, as funds originally earmarked for flood control works are expected to be redirected to other government programs.
An estimated P255.5 billion has already been slashed from the Department of Public Works and Highways proposed 2026 budget, following the order of President Ferdinand Marcos Jr. to conduct a sweeping review of its original P881.3 billion budget.
Malacañang said the money would be shifted to social services and education, among other key sectors. However, the budget department had warned that a “temporary slowdown” in infrastructure spending was likely as the DPWH verifies completed projects and tightens scrutiny on billings and payment claims.
“There’s certainly a risk to economic projections going forward,” Jeffries said. “More broadly, corruption has broad impacts on economic growth in general and investment sentiment. We’re monitoring that and how that may be affected going forward.”
The government’s growth ambitions hinge partly on keeping infrastructure outlays at 5 to 6 percent of GDP. With investigations into alleged irregularities in flood control projects ongoing, the ADB could hold off on revising its outlook until more data is available.
Despite the recent revisions, the ADB still ranks the Philippines as Southeast Asia’s second-fastest growing economy this year and next, trailing only Vietnam. The country is also expected to outpace Developing Asia – a group of 46 economies projected to expand by an average of 4.8 percent this year and 4.6 percent in 2026.
While a healthy growth rate as measured by economists is important, so is containing the massive leakages that are due to deeply entrenched corruption in the country. Filipinos can only imagine how much more competitive our country and its economy could be if the billions, if not trillions, had not been stolen by corrupt officials and their partners in plunder. Infrastructure outlays that look good on paper but end up being pocketed by the corrupt simply cannot be sustainable. If we want real growth and progress for our nation, the type that is truly felt by the people and not just the bean counters, a revamp of our system will need to be necessary.*
