MANILA, Philippines – The Development Budget Coordination Committee (DBCC) further trimmed the country’s economic growth targets for the remainder of the Marcos Jr. administration as the economy continues to reel from the effects of the flood control corruption scandal.

During a Malacañang press briefing on Monday, January 5, Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said the P6.793-trillion 2026 national budget will be able to help grow the Philippine economy by 5% to 6%. This is lower than the DBCC’s earlier target of 6% to 7%.

Balisacan also said the economy is expected to grow 5.5% to 6.5% in 2027 and 6% to 7% in 2028, lower than the DBCC’s projected 6% to 8% growth for both years. The adjustments were made during the DBCC’s meeting in December 2025.

The DEPDev chief cited the effects of global trade uncertainties and the public works corruption scandal on the Philippine economy.

Uncovered corruption in flood control projects caused government infrastructure spending to tumble to a 14-year low in the third quarter of 2025 as the Department of Public Works and Highways implemented stricter validation measures. Corruption concerns also tempered business and consumer confidence as Filipinos held back on purchasing durable goods.

The Philippine economy grew just 4% in the third quarter, with average growth for 2025 at just 5%. Balisacan said they expect the economy to have grown just 4.8% to 5% last year.

Balisacan also explained that the economy will continue to feel the effects of the diminished trust in governance this year, with growth expected to rebound in the second half.

“We expect growth perhaps in the first quarter to be or at least in the first half [of 2026] to be still quite not as rosy as we would want it to be. But I think that with the improvements in the systems that we are putting in place as reflected in the budget and in the various offices, we expect to see faster growth toward the second half and the succeeding years,” the country’s chief economist explained.

Balisacan said consumption spending has been the main driver of economic growth in the past few years, contributing about 75% of gross domestic product (GDP) growth. He expects consumption to rebound this year on the back of growing employment and remittances, as well as slow inflation and low interest rates.

The World Bank slightly downgraded its growth forecast for the Philippines this year to 5.3% from 5.4%, while Fitch Solutions unit BMI maintained its projected growth at 5.2%. – Rappler.com