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Our economy had been showing lackluster growth over the past years with major festering structural problems that constrain our export, agriculture and manufacturing sectors.
The corruption scandal has caused a slowdown in growth in 2025 and is projected by some analysts to temper growth in 2026 and beyond. Even domestic consumption, our usual reliable economic engine, moderated in the last quarter.
The corruption scandal is also eroding our ability to attract job-generating foreign investments. FDI inflows fell by 40.5 percent year-on-year in August and showed signs of further deterioration ahead.
That’s because political risk has increased significantly. Analysts here and abroad are widely saying that it is a significant drag to Philippine economic growth in 2026, unless the government can restore credibility and ensure transparent, efficient public spending.
But of course! How can investors, foreign and even local, feel safe to risk their capital when the scandal has, of late, tainted even the President himself? So much mud has been thrown around over the past few weeks damaging reputations or what little of it our politicians have.
The recent claims of former congressman Zaldy Co that BBM not only knew but participated in the budget insertions drama, is very damaging.
Of course, Co’s credibility is also questionable but as one of my colleagues in a Viber Group, a former bureaucrat, commented: “Zaldy Co’s revelation is NOT unthinkable and NOT unrealistic. That’s the way budget priorities for the pork barrel of ALL congressmen are included in the GAA.
“The Appropriations chairman is the main channel of pork barrel projects with the blessing of the Speaker, the closest/most influential person to the President and the gatekeeper for projects. This is the way the administration or the President has been able to control the congressmen ever since…”
The most devastating of Co’s claims is about BBM’s supposed involvement in this horrible conspiracy to raid the Treasury. This was widely reported in all media including this newspaper.
“In two trips to a Forbes Park property in early December 2024, Co claimed he handed over P200 million on Dec. 2 and P800 million on Dec.5 to Justice Undersecretary Jose Cadiz Jr., who he said essentially served as Marcos’ bagman.
“I personally delivered the money. I, myself, gave the money, together with my driver and staff. And all of this was based on the direct orders of Speaker Martin Romualdez,” Co said in mixed English and Filipino in the video, speaking from outside the Philippines.
Co has effectively admitted against self-interest, his complicity in the execution of the unlawful orders he described. That may improve his credibility a bit but Co’s notoriety must make us suspend belief until he returns and is subjected to cross examination.
What Co said was not sworn to before a Philippine official and as of now, treated as hearsay by legal quarters. But the man-on-the-street Pinoy already got the impression of serious wrongdoing and will likely think it is believable.
That is politically destabilizing as more rallies are being scheduled over the next few days or weeks. There are calls for both BBM and Sara to voluntarily resign and let Senate President Tito Sotto take over in the interim and special elections called within 60 days.
Sara herself is all over social media declaring she is ready to assume the presidency if BBM resigns. That’s a worse outcome. For that alone, BBM should be allowed to complete his term. Those who voted for the UniTeam made the country a hostage of the warring political families.
Indeed, Sara’s impeachment must be revived so we can open her bank accounts to verify what former senator Trillanes has already made public. Those AMLC records, which can only be publicly opened in an impeachment trial, should show if she is worthy of our trust.
But Sara’s supporters seem to be actively moving to get her in Malacañang soon. Former president GMA, a loyal Sara supporter, was reported to be trying to gain support to have herself elected as Speaker.
That’s supposedly so GMA can orchestrate the effort to impeach BBM. Impeachment originates at the House. If that game plan materializes, we will be in political gridlock for most of 2026.
In the meantime, life will get harder for the common Pinoy as our economy continues to flounder and the cost of imported food rises with the falling peso.
Analysts from institutions like Deutsche Bank, BMI (Fitch Solutions unit), S&P Global Ratings and the ASEAN+3 Macroeconomic Research Office agree that the scandal is clouding the Philippine growth outlook. And they haven’t even taken regime change into consideration.
Government will slow down considerably as public officials become more cautious, wondering which side will prevail.
There has already been a sharp slowdown in infrastructure spending, a key factor in the economic slowdown to a four-year low of four percent growth in the third quarter of 2025.
The DPWH secretary is now more concerned with cleaning house than initiating new construction, especially flood control projects. That exacerbates our vulnerability to climate risks.
Foreign direct investment inflows are already below pre-pandemic averages. While no agency has yet revised the Philippines’ investment-grade status, analysts suggest this could change if reforms stall or unrest (political risk) escalates.
Global investors also see this corruption scandal as a systemic red flag, highlighting structural vulnerabilities in the way we govern ourselves beyond just the stolen funds. We need constitutional change.
Prosecution will help restore investor and citizen trust. Some lower-level DPWH officials have been arrested and are facing charges. But people need to see some “big fish” being punished. Or they will think what BBM is doing is all palabas.
Fat chance any “big fish” will be charged soon.
BBM, Sara and GMA will be playing their deadly Game of Thrones while the country moves ever closer to becoming a failed state.
A pox on all their houses!
Boo Chanco’s email address is [email protected]. Follow him on X @boochanco
