At the crossroads: Growth, exclusion and the cost of waiting
The Philippines stands at a critical juncture in its economic life.
The 3 percent gross domestic product growth rate in the last quarter of 2025 has led skeptics to warn that the country may be entering a prolonged period of slow growth, which, in turn, can signal an economic recession.
This moment, however, need not be a death sentence. It is a call that forces a confrontation with a deeper problem: Past growth failed to build inclusive, accountable and resilient foundations.
For years, uneven outcomes were defended with a familiar claim: The “bibingka” must expand first before it can be shared.
That argument assumed growth would be durable, that its benefits would eventually spread, and that institutions would later redistribute effectively.
The current slowdown exposes how fragile those assumptions were. Growth proved shallow rather than structural, easily disrupted by shocks.
Large segments of the population—informal workers, rural households, micro, small and medium scale enterprises (MSMEs) and disaster-exposed communities—remained excluded from security and opportunity.
What was framed as a temporary delay in inclusion hardened into a permanent weakness.
Exclusion, however, is not merely a social cost; it is an economic risk. When large groups lack buffers, shocks propagate faster and deeper across the economy. Demand weakens, recovery slows and fiscal pressures intensify.
The present slowdown reflects not only external headwinds but the accumulated consequences of an economic model that treated inclusion as secondary.
The lesson is no longer debatable: Inclusion is not the reward for growth; it is a condition for sustaining it.
The long failure of flood control projects makes this logic unmistakable. Billions of pesos were allocated to protect vulnerable communities, yet corruption, weak oversight and impunity transformed public investment into public risk.
Corruption in this context was not incidental—it was an act of exclusion. Resources meant for collective protection were diverted, leaving those most exposed to bear the consequences.
Inequality was not merely tolerated; it was actively produced through governance failure.
This is why the “grow first, distribute later” premise ultimately encouraged corruption. By deferring accountability in the name of growth, it normalized leakage as long as headline figures improved. Redistribution was perpetually postponed, while capture occurred immediately.
The bibingka grew, but access to it narrowed. When the time came to share, little remained.
Efforts to prosecute corruption through the Office of the Ombudsman are indeed necessary—but insufficient.
Accountability pursued solely through cases and convictions treats corruption as a legal deviation rather than a structural outcome.
As long as growth remains the overriding priority, insulated from inclusion and institutional reform, the incentives that generate corruption persist.
Cases may be filed, but exclusion will be reproduced. Justice intended merely to protect growth objectives ultimately weakens both.
If growth is to be rebuilt on firmer ground, solutions cannot rest on centralized authority alone. Local government units offer a critical part of the answer.
Being closer to communities, they are better positioned to identify real needs, tailor interventions and be held directly accountable by the people they serve.
Important steps have already been taken to make decentralization possible. Yet these reforms will remain insufficient unless power itself is genuinely dissipated—both upward at the national level and downward within local governments.
Without dispersing authority, resources and decision-making power, decentralization merely transfers administrative burdens to local governments while real control stays centralized, reproducing the same failures under a different label.
The current slowdown does not announce collapse, but it does mark the end of an illusion.
Growth without inclusion, accountability and dispersed power is not development—it is delay.
At this crossroads, the choice is stark: Wait for growth that may never come, or build resilience now by confronting exclusion, dismantling the incentives for corruption, and grounding economic renewal in institutions that people can finally trust.
