AFTER government spending slowed the growth of the Philippine economy in the third quarter this year, a business leader called on the government to ‘fix the domestic economy’ first instead of being fixated on securing foreign investments.
‘The slowdown in spending [accounted for the] 4 percent. Government spending, especially infrastructure, has a huge impact on GDP. So in terms of overall investment climate and so on and so forth, we’ve been saying for years that you can make it about foreign investment but fix the domestic economy first,’ Rafael Alfonso Salvador Garcia Ongpin, Makati Business Club Executive Director, told reporters on the sidelines of the forum billed, ‘Competition Law in a Digital Economy’ organized by MBC on Tuesday in Makati City.
Ongpin said the business community is dealing with ‘a lot’ of issues on ease of doing business.
‘Ease of doing business is just a code for corruption. We have to deal with the [Bureau of Internal Revenue] BIR, we have to deal with the [Bureau of Customs] BOC. These are issues that are not going away,’ Ongpin pointed out.
Data from the Philippine Statistics Authority (PSA) noted that gross capital formation (GCF) contracted by 2.8 percent in the third quarter of 2025. This was a reversal from the 12.8-percent growth in the same period of 2024.
Construction declined by 0.5 percent in the third quarter of 2025, attributed to the contraction of General government with 26.2 percent.
PSA Undersecretary Claire Dennis S. Mapa said this 26.2-percent contraction on General government is the slowest since the 22.5-percent decline in the third quarter of 2011.
Explaining the abrupt decline in public construction, Department of Economy, Planning, and Development in the Philippines (DEPDev) Arsenio M. Balisacan attributed this to the ‘stricter validation measures for [Department of Public Works and Highways] DPWH’s civil works, as well as the implementation of stricter requirements that delayed billings and disbursements for government projects.’
Moving forward, Ongpin said the Philippines may not hit the government’s growth targets because of the slowdown in the third quarter.
In an earlier statement, the MBC official underscored that the ‘significantly’ lower third quarter GDP growth result of 4 percent ‘illustrates how the corruption scandal has begun to affect our macroeconomic performance.’
Ongpin said the corruption scandal slowed government spending, as many programmed infrastructure projects are on hold or even in limbo while the DPWH and the Independent Commission for Infrastructure (ICI) investigate these projects.
After the PSA announced on Friday that the economy grew by only 4 percent in the third quarter this year, Balisacan explained that the GDP is also about expectations and confidence.
‘It’s not just an infrastructure issue, but any noises or disturbances, shocks as we call them in economics that shape people’s perception of the future, can impact on your GDP. So confidence is key to that,’ Balisacan underscored.