Balisacan: 2025 growth goal of 5.5-6.5% stays

Economy, Planning and Development Secretary Arsenio Balisacan —DEPARTMENT OF ECONOMY, PLANNING AND DEVELOPMENT/FACEBOOK

The Marcos administration expressed confidence it could still meet the lower end of its 5.5- to 6.5-percent growth target for the year, even as it braces for a slowdown in the third quarter amid a widening corruption investigation and the aftermath of a series of destructive typhoons.

That means no imminent revisions to the government’s current growth goal, Economy, Planning and Development Secretary Arsenio Balisacan said.

“The growth that we are expecting for 2025 is now 5.5 to 6.5 percent. All those numbers that I showed are pretty close to the lower end,” Balisacan told reporters on the sidelines of the 2025 European-Philippine Business Dialogue.

“So, the low end of the range is still very much achievable,” he added.

But Balisacan said weather disturbances that disrupted economic activities and the deepening probe into anomalous infrastructure spending may have created a “bit of a slowdown” in the third quarter. Even so, he cited developments that could offset the weakness.

“There are also good developments, like inflation has continued to fall, interest rates have continued to slow down,” he said.

“The effects of falling interest rates months earlier are of course beginning to be felt now because there are usually lagged effects of interest rate changes and investment and consumption decisions,” he added.

The government aims to keep infrastructure investment at 5 to 6 percent of gross domestic product—spending seen as crucial to meeting the Marcos administration’s growth targets until the end of its term.

But corruption in flood control projects drained the economy of an estimated P42.3 billion to P118.4 billion from 2023 to 2025, according to a Department of Finance study. The losses could have otherwise generated 95,000 to 266,000 jobs over the same period.

Tighter controls

Amid the probe, the Department of Public Works and Highways recently tightened the verification of completed projects and enforced stricter checks on billings and payment claims amid the deepening investigations. The Department of Budget and Management said a “temporary slowdown” in infrastructure spending was expected as the cleanup continues.

Already, institutions like the Asian Development Bank had flagged the ongoing corruption inquiry as a risk to economic projections going forward. The Manila-based lender pegged its growth forecast for the country at 5.6 percent for this year.

In the same interview, Balisacan also flagged external headwinds like higher US tariffs that could weigh on investments.

“There are positive forces and negative forces, hopefully the positive forces will dominate,” he said. “Of course, these corruption scandals could also impact on sentiments—investment sentiments and consumer sentiments.”