Marcos vows to ramp up spending

Philippine President Ferdinand R. Marcos, Jr. on Thursday pledged to ramp up government spending in the fourth quarter, as a corruption scandal contributed to weaker-than-expected growth in the third quarter.

“We have implemented many measures because public spending will now be increased to make sure that by the end of the year, the spending levels are aligned with our original plan — so we can recover what was lost in the third quarter,” Mr. Marcos said in mixed English and Filipino during a press briefing in Malacañang.

The Department of Budget and Management (DBM) earlier said it has programmed PHP 1.31 trillion for disbursement during the October-to-December period to boost economic growth.

In the third quarter, the Philippine gross domestic product (GDP) growth slowed to a four-year low of 4% from the 5.5% expansion in the second quarter and 5.2% a year ago.

The sharp economic slowdown was mainly attributed to the corruption mess that dampened government spending and affected consumer and investor confidence.

For the first nine months of the year, GDP growth averaged 5%, slower than 5.9% in the same period last year, and below the government’s 5.5-6.5% full-year target.

The government is probing a multibillion-peso corruption scandal involving public works projects, where government officials allegedly colluded with private contractors to inflate costs and approve ghost infrastructure. It has affected investor confidence in the Philippines, weighing on the stock market and the Philippine peso.

Mr. Marcos vowed to put the culprits behind bars before Christmastime.

“They won’t have a Merry Christmas. Before Christmas, they will be jailed,” he said.

Mr. Marcos said the slowdown in economic activity in the third quarter can be partly blamed on the string of typhoons.

“There really was a downturn in economic activity. You have to remember that it’s not only because of these problems. Because of the typhoons, we lost working days in the economy,” he said.

Mr. Marcos also attributed the slower growth to the trade uncertainties, which are also affecting the global economy.

“We are not the only ones suffering the shocks that come from the new trade structure that has been imposed on the rest of the world. And so, we are all adjusting to that,” he added.

Since Aug. 7, the US has imposed a 19% duty on many goods from the Philippines, Cambodia, Malaysia, Thailand and Indonesia.

DBCC to review targets

Meanwhile, the Development Budget Coordination Committee (DBCC) is set to review its macroeconomic assumptions and targets next week, Senate Committee on Finance Chairman Sherwin T. Gatchalian said.

During the plenary debates for the 2026 national budget, Mr. Gatchalian said he is certain there will be revision in the growth targets.

“Next week the DBCC will once again meet and talk about this, possibly a revision in terms of our 2025 economic growth, and also the succeeding years 2025-2028,” Mr. Gatchalian said.

This was in response to Senator Risa N. Hontiveros-Baraquel’s question if the weak third-quarter growth will prompt a revision of the DBCC targets.

“We will also have a slightly lower economic growth forecast for the end of the year, about… 4.7-5%, Mr. President. And then our debt to GDP will still be at 63%,” Mr. Gatchalian said.

In June, the DBCC tempered its growth forecast to 5.5-6.5% for 2025 and 6-7% for 2026, mainly due to “heightened global uncertainties” arising from the Middle East conflict and US tariffs.

Mr. Gatchalian said there are a lot of factors that have affected the growth outlook, such as the series of typhoons and recent earthquakes.

Last week, Economy Secretary Arsenio M. Balisacan warned that hitting the low end of the 5.5-6.5% growth target would be “very challenging,” with more storms expected this quarter.

For next year, Mr. Gatchalian flagged external headwinds such as US trade policies that will have a negative impact on growth.

At the same time, Mr. Gatchalian said restoring public trust requires accountability, stressing that those involved in the flood control corruption scandal must face charges and be jailed before yearend.

“That’s why all of this flood control issue is giving us a lot of headache in terms of outgrowing debt. But still, that’s why the administration is really bent on holding people to account by putting them to jail, and that will bring back confidence and in turn revive our economic growth in the next quarter,” he said.

Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said the slowdown in economic growth is also due to the government’s lack of a “coherent” growth strategy.

“The main reason why our GDP growth is below target is that the current administration does not have a coherent growth strategy, and worse has allowed or enabled policies and activities that undermine growth (diversion of pub-lic funds to Maharlika, revenue-eroding measures, transfer of PDIC (Philippine Deposit Insurance Corp.) and PhilHealth (Philippine Health Insurance Corp.) funds to National Government, ‘most corrupt budget,’ massive corruption, etc,” he said in a Viber message. — Chloe Mari A. Hufana and Aubrey Rose A. Inosante