The Philippine economy experienced its slowest expansion in four years during the third quarter of 2025, growing at just 4% according to the Philippine Statistics Authority—a sharp decline from the 5.5% recorded in the previous quarter and significantly below the government's target range of 5.5% to 6.5%.
This marked the weakest performance since the COVID-19 pandemic's first quarter of 2021, with government infrastructure spending plummeting to a 14-year low of -26.2% growth amid stricter validation measures for Department of Public Works and Highways projects following the flood control corruption scandal.
Department of Economy, Planning and Development Secretary Arsenio Balisacan explained that investor and consumer confidence were severely dampened by ongoing probes into government infrastructure spending, with household consumption slowing to 4.1% as widespread cancellations of school, work, and travel activities due to typhoons further suppressed economic activity.
Balisacan emphasized that "the productive capacity that we had wanted to happen was muted by all this corruption," noting that the investment in infrastructure meant to enhance the economy's capacity to produce more and generate higher-quality jobs has been significantly undermined by the scandal.
Despite these challenges, Balisacan maintained optimism about the Philippines' strong macroeconomic fundamentals—including low inflation, manageable fiscal deficit, stable currency, and a young resilient workforce—though he acknowledged that achieving even the lower end of the government's growth target would now be "challenging."
