The Philippines ended 2025 with its slowest economic growth in over a decade. Official data shows the economy expanded just 3% in the fourth quarter of last year, marking the weakest performance since 2009 outside of the COVID-19 pandemic.
Analysts say the slump was triggered by the massive flood control corruption scandal that hurt trust in the government and public projects, with businesses slowing down and consumers spending less. The result was a disappointing finish to an already tough year.
Flood Control Scandal Freezes Spending and Growth
Government infrastructure projects ground to a halt as agencies reviewed contracts tied to the scandal. Spending fell nearly 42% in late 2025, delaying or stopping construction and maintenance on roads, bridges, and other public works across the Philippines.
Household consumption, which drives roughly 70% of the economy, also slowed, and even holiday sales during the Christmas season could not offset the decline.
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