PH growth likely slowed to over decade low in 2025
The Philippine economy may have seen one of its weakest growth rates in more than a decade in 2025, reflecting the damage of a sweeping anticorruption drive that stalled government spending and gutted confidence.
In a note to clients, Deutsche Bank said the economy may have grown by 4.1 percent in the final three months of 2025—a modest rebound from the preceding quarter’s 4 percent clip—thus bringing the average growth last year to 4.7 percent.
The bank’s 2025 forecast would mark a deceleration from the 5.7-percent expansion recorded in 2024. Excluding the pandemic-induced meltdown in 2020, the estimate would also turn out to be the weakest pace of expansion since 2011, when a graft crackdown during the Aquino administration sapped government spending.
“Similar to the third quarter of 2025, we expect reduced government outlays, with the associated spillover effects to private investment and spending, to drag on growth,” Deutsche Bank wrote.
“In addition, the consumer confidence index in the fourth quarter of 2025 fell to the lowest since 2021, with fewer households intending to purchase big-ticket items and instead opting to save,” it added. “This would likely materialize as lower growth in the near term, as household consumption comprise more than 70 percent of gross domestic product (GDP) in the Philippines.”
An Inquirer poll of 14 economists last week yielded a median growth estimate of 4.2 percent for the fourth quarter of 2025, indicating that average growth last year may have settled at 4.8 percent. If borne out, the figure—set to be released on Jan. 29—would fall well short of the government’s 5.5- to 6.5-percent growth target for 2025, extending a streak of missed annual goals that began in 2023.
President Marcos ordered an investigation into anomalous flood control projects, a scandal that ensnared lawmakers, cabinet members and government engineers. The probe rattled business and consumer confidence and slowed public spending, dragging on economic activity.
The findings of the probe also underscored how corruption undermined efforts to strengthen the country’s defenses against climate shocks, which have grown more frequent and destructive, exacting a heavier toll on economic growth.
In a separate note, economists at Japanese investment bank Nomura said growth may have further eased to 3.8 percent last quarter, reflecting “the impact of the sharp fiscal contraction, which has persisted as a result of the ongoing corruption scandal.”
“We also expect the negative spillover effects from the scandal to broaden from household consumption to private investment spending, likely due to a prolonged slump in construction activity and the drop in overall business sentiment,” Nomura added.
