Economic Secretary Arsenio Balisacan said the country’s slower economic growth cannot be blamed entirely on corruption, noting that the world economy has suffered through uncertainty in the past year.
On Monday, October 6, Balisacan said international financial institutions have revised their global growth forecasts downward, citing persistent instability in trade and investment flows.
‘The global economy has… in fact, the World Bank, the IMF – all the organizations have reduced global growth because of the elevated uncertainty in the global economy that impact the flow of goods, trade, investment and so on. We are not completely isolated from those developments,’ Balisacan said at a press briefing.
The issue of corruption has rocked President Ferdinand Marcos Jr.’s government, as several high-profile officials being named in massive flood control fund schemes. The Department of Finance projected that P119 billion was lost in corruption since 2023, dampening economic potential.
For the first half of the year, the Philippines’ gross domestic product (GDP) grew an average of 5.4%, slower than the 6.2% a year ago. The projection for the second half of the year is even slower, with the full effect of the United States’ tariffs taking place.
While he does not attribute the dip in growth solely to corruption, the economic chief said the government must respond swiftly to domestic issues.
‘I think accountability and transparency is key to that. That’s why this administration is pushing for a more rapid digitalization,’ Balisacan said.
He added that addressing corruption could strengthen investor confidence and create a more favorable environment for long-term growth.
World Bank: Turn scandal into reform
World Bank Philippines Director Zafer Mustafaoglu echoed the sentiment, saying the ongoing flood control scandal should be viewed as a chance for reforms toward transparency.
‘This short-term question, actually, would be a good opportunity to enhance its long-term growth,’ Mustafaoglu said, responding to whether the has affected how the World Bank viewed the Philippines’ credibility for loans.
The World Bank has been working with the Philippines on governance reforms aimed at reducing corruption and promoting transparency.
The corruption scandal involving alleged kickbacks from infrastructure projects has implicated several lawmakers and senior government officials and continues to test the administration’s anti-corruption stance.