“…The economy is not stalling, and investor confidence is not waning a bit.”
Doomsayers, again, are predicting the collapse of the Philippine economy amid the anomalous flood control projects exposed in Congressional hearings and media reports.
The economy bore the brunt of the flood control scandals after the gross domestic product grew slower 4 percent in the third quarter of 2025. Infrastructure projects were delayed in the third quarter in the aftermath of the controversy, with procurement and governance issues hounding them.
The controversy led to government underspending, slower project execution and a drag on construction and related services.
Doomsayers and those bent on bringing down the administration of Ferdinand Marcos Jr. surmised that investors’ confidence on the economy would soon taper off because of corruption, especially at the Department of Public Works and Highways (DPWH).
But the economy is not stalling and investor confidence is not waning a bit.
Debt watcher S&P Global Ratings has even affirmed its investment-grade rating on the Philippines.
S&P, in its latest report released at end-November, kept its ‘BBB+/A-2’ rating on the Philippines, believing that the growth slowdown seems temporary. “The government is continuing its fiscal consolidation, with its debt burden stabilizing. The country’s external position remains a rating strength,” said S&P, in reference to the country’s strong macroeconomic fundamentals.
“S&P’s rating decision confirms our view of the favorable long-term economic growth prospects,” said Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona, who met with President Marcos recently to review the country’s economic outlook.
Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan, in an earlier report, said the economy remains on a growth trajectory. The third-quarter growth of 4 percent, according to him, “reminds us of the urgent need to address key challenges and strengthen our foundations for rapid, sustained and inclusive growth.
There was a sharp contraction in public construction in the third quarter due to stricter validation measures for the DPWH civil works and the implementation of more rigid requirements that delayed billings and disbursements for government projects.
National Treasurer Sharon Almanza, meanwhile, said key market indicators showed no sign of weakened investor confidence, noting that recent Treasury auctions point to calm investor behavior, with broadly stable yields on both short-term and longer-tenor bills and bonds.
The administration’s promise to jail key scandal figures by year-end will help sustain investor confidence. “I think the investigation has been progressing. So we’re really hoping that we address the concerns of our people and investors, and show that the system is working,” she said.
Improving credibility, providing a clearer policy direction and holding people accountable for their misdeeds will sustain investment momentum.
“At times like this, what matters most for markets and businesses is not the noise around us, but the strength of our institutions and the steadiness of our long-term fundamentals,” SM Investments Corp. (SMIC) chairman and former BSP Gov. Amando Tetangco said at the BusinessWorld Forecast 2026 forum.
Tetangco added that the country’s institutions remain stable and that the Philippines’ macroeconomic strengths continue to “prevail over instability.”
BDO Capital & Investment Corp. president Eduardo Francisco said business executives remain committed to investing in the Philippines even as they wait for stronger government action.
The Marcos administration has heard the protests and public cries to jail those involved in anomalous flood control projects. It has taken the call for accountability and transparency seriously.
For starters, the Independent Commission for Infrastructure (ICI) and the DPWH have referred to the Office of the Ombudsman the criminal prosecution for plunder and graft charges against eight so-called “congtractors,” led by resigned Ako Bicol Rep. Zaldy Co.
The ICI also asked the Ombudsman to conduct further investigation for possible violations of the Anti-Graft and Corrupt Practices Act on other lawmakers, ICI chairperson Andres Reyes Jr. explained that “congtractors” refer to congressmen who, by themselves or through their family members, own or control “construction firms that receive project awards or obtain contracts from the DPWH.”
The Bureau of Internal Revenue (BIR), in addition, filed tax evasion cases against several former officials of the DPWH First Engineering District in Bulacan, or the so-called “BGC Boys” or “Bulacan Group of Contractors.”
It may take time to prosecute the guilty contractors. But as soon as the wheels of justice start to grind, the Philippine economy will be on a more stable footing to resume its robust growth trajectory.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com
Tags:
DPWH, flood control projects, S&P Global Ratings, Independent Commission for Infrastructure, Zaldy Co
