GDP

Socioeconomic Planning Secretary Arsenio Balisacan says unemployment's climb to a four-year high and growth stuck below target show that how the country picks its leaders is holding back the economy, days after former House Speaker Martin Romualdez's arrest on a ₱7-billion plunder case.

Government economists say a 32.4% collapse in public construction — tied to agencies' reluctance to approve projects after the flood-control corruption scandal — cost the economy roughly a percentage point of growth in the second quarter, pushing the debt-to-GDP ratio to 66%, its highest since 2004.

The Department of Budget and Management has released 87.7% of the P6.793-trillion 2026 national budget as of end-May — slower than the 90.4% disbursed a year earlier — even as the long-lagging DPWH finally received 96.6% of its allocation. But capital spending remains depressed: infrastructure and other capital outlays plunged 52% to P41.5 billion in April, the 10th straight monthly decline since the flood-control corruption scandal erupted.

In a newly published book, the Bangko Sentral ng Pilipinas says a weak industrial base, underdeveloped agriculture and heavy import dependence are eroding the buffers — remittances and BPO exports — that have long masked the country's persistent goods trade deficit, even as the current account gap narrowed to $16.3 billion in 2025.

Foreign direct investment net inflows climbed 26% year-on-year to $611 million in March, BSP data show, lifted by equity, reinvested earnings and debt instruments from Japan, the US and Singapore — but the figure was the lowest in two months and follows a year in which FDI slumped to a five-year low, underscoring how fragile investor confidence remains amid geopolitical and domestic political turmoil.

Government economists now project the debt-to-GDP ratio will linger in the 60–63% range through 2026 — the worst sustained level in two decades — as Middle East war-driven oil shocks force fresh emergency borrowings on top of a fiscal position already strained by collapsing infrastructure spending and slowing growth.

Oxford Economics warns that Manila — carrying the widest fiscal deficit in ASEAN at 5.6% of GDP — will be forced to rein in government spending as interest payments consume over 15% of revenue and borrowing costs climb, compounding the infrastructure collapse already caused by the flood control graft crackdown.

The 2026 Chandler Good Government Index ranked the Philippines four spots lower than last year, with analysts pointing to corruption scandals, institutional weaponization, and policy drift as the drivers — while the country scored near the bottom globally on ethical leadership, rule of law, and budget surplus.

An Oxford Economics analysis released this week warned that the Philippines — entering 2026 with Southeast Asia's widest budget deficit — now faces the most severe market pressure in the region to cut state spending, as rising borrowing costs consume an ever-larger share of government revenue and the economy digests the fallout from the flood control corruption crackdown.

Government infrastructure outlays plummeted to ₱147.8 billion in the first quarter of 2026 — down from ₱261.8 billion a year earlier — as the Department of Public Works and Highways imposed aggressive billing validation procedures in the wake of the flood-control corruption scandal, dragging GDP growth to a post-pandemic low of 2.8%.