The German banking giant Deutsche Bank has urged the Philippine government to act swiftly to contain the corruption scandal that has disrupted public works, as stalled projects are depriving the economy of a potentially significant boost from infrastructure spending.
The bank estimated that a 20 percent year-on-year increase in government infrastructure outlays could lift real gross domestic product (GDP) growth by 0.7 to 1.3 percentage points, which are gains the country may be missing out as graft investigations slow disbursements.
The bank said stronger public investment would ripple through the economy, stimulating consumer and business activity both directly, through procurement and spending, and indirectly, by lifting confidence.
Although a sharp increase in infrastructure spending has risks, as higher outlays may spur dollar outflows as imports climb to meet the demands of faster construction activity and stronger consumer spending, which could potentially put pressure on the peso, the risks appear limited.
“This underscores the need for the government to press on with reform amid the ongoing probe to restore confidence in the economy, while also making sure that reallocated budget funds are disbursed as planned,” Deutsche Bank said.
The flood control project corruption scandal has ensnared lawmakers, Cabinet members, and government engineers, sending consumer confidence plummeting to a pandemic-era low of -22.2 percent in the last three months of 2025, while direct government spending on infrastructure contracted by 40.1 percent year-on-year in October last year, based on the latest available data.
As long as corruption taints government infrastructure projects, the country will not be able to regain the momentum it has lost. This adds to the urgency for the administration of President Ferdinand Marcos Jr. to earn back public trust by identifying and prosecuting the corrupt, fixing the rotten system that has allowed corruption to be normalized, and putting competent and trustworthy officials in place.
The infrastructure corruption scandal plaguing the country cannot be allowed to fester. It requires immediate, and hopefully lasting resolution and solutions, especially if the impacts that the Filipino people and our economy are already feeling are going to be mitigated. Investigations and independent commissions are fine, but it shouldn’t take foreigners to know that concrete action has to follow ASAP.*
