Philippine GDP growth sinks to post-pandemic low in Q4 2025 due to corruption scandal

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January 29, 2026 | 3:00pm

MANILA, Philippines — The Philippines’ gross domestic product (GDP) hit a record low of 3.0% in the fourth quarter of 2025—its lowest quarterly growth since 2009, excluding the pandemic years.

This brings the country’s annual GDP growth to 4.4%, well below the government’s target of 5.5% to 6.5%.

While analysts had already predicted that the Philippines would fail to meet its GDP target, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan admitted that the economic slump was still sharper than expected.

Balisacan admitted that the massive corruption scam in the Department of Public Works and Highways (DPWH) had affected business and consumer confidence.

“While these developments weighed on short-term growth, the Marcos Administration emphasizes that the investigations into the flood control corruption controversy had to be undertaken,” Balisacan said in a press conference.

“The resulting measures and governance reforms are necessary to strengthen accountability, improve project quality, ensure better value for scarce public resources, and build our capacity for faster and more sustainable growth in the years ahead,” he added.

Other factors that further weighed down the country’s economy were the adverse effects of natural hazards, as well as global uncertainties.

The industry sector suffered a sharp decline in the fourth quarter of 2025, shrinking to -0.9%, bringing the annual growth rate to 1.5%.

Balisacan again attributed this to the decrease in construction projects. Construction activity in the country slowed following the DPWH scandal, with Public Works Secretary Vince Dizon halting locally funded projects after the flood control scam.

Despite the sizable decline, Balisacan emphasized that a slowed economy is still preferable to allowing corruption to persist in the name of short bursts of growth. Reforms, he said, are key to sustainable and inclusive growth.

“We need to regain trust as quickly as possible,” Balisacan said, adding that legislative proposals such as an Anti-Political Dynasty measure, the Party-List System Reform Act, and others would help restore public confidence.

Balisacan said that 2026 must be the rally point, expressing optimism that Philippine GDP growth may see a turnaround as early as the second quarter of 2026.