Government still counting on late-year public spending boost to hit GDP goals

THE GOVERNMENT is still counting on accelerated spending late in the year as it reaches for the low end of official growth targets, even though economic planners have all but ruled out the possibility.

The official growth target is 5.5%–6.5% for 2025, though the Department of Economy, Planning, and Development (DEPDev) has warned that even the low end of the target band could be out of reach.

If DEPDev’s view pans out, it would be the third consecutive year targets will be missed, as the Philippines grapples with an infrastructure corruption scandal and successive natural disasters.

Palace Press Officer Clarissa A. Castro said on Tuesday that President Ferdinand R. Marcos, Jr. and his economic team will “work together” to reach the desired gross domestic product (GDP) for the full year.

Mr. Marcos has said the government will ramp up fourth-quarter spending to boost economic growth, while the Budget department is counting on stronger holiday consumption to help lift the economy.

“The Palace and the President are doing their best to meet our targets,” Ms. Castro told a Palace briefing.

“We will continue striving, especially with the recent (protests), which have been quite disruptive and are affecting the economy. The economic team, the President, and hopefully the public as well will work together so we can still achieve our goals.”

The corruption scandal has weighed on government spending and undermined investor and consumer confidence.

About 59,000 protesters took to the streets on Sunday to denounce corruption within the bureaucracy. The Nov. 30 protest was billed as the second installment of protests first mounted in September.

The public works scandal has implicated several high-ranking officials, including Mr. Marcos, and led to the resignation of key cabinet members.

On Monday, the DEPDev said that to meet the low end of the target band, the economy would need to grow by roughly 7% in the fourth quarter — a pace it called “very unlikely.”

Growth slowed dramatically in the third quarter, with GDP rising only 4% — the weakest reading in over four years — dragging the nine-month average down to 5%. 

The Development Budget Coordination Committee (DBCC) is set to meet on Dec. 9 to reassess macroeconomic assumptions and possibly reset the growth target for 2026.

“Our DBCC is meeting to assess the situation, particularly given the recent developments in the third-quarter performance and what’s emerging in the fourth quarter. Those will be taken into account in setting a target for 2026,” Economy Secretary Arsenio M. Balisacan said on Dec. 1. — Chloe Mari A. Hufana