The Philippine economy is facing a potential slowdown in the third quarter due to weak government spending and disruptions from adverse weather conditions, Finance Secretary Ralph Recto said, while expressing optimism for an “upside” in the coming months.
Recto said the government has prepared a “catch-up plan” to mitigate the potential slump, focusing on the accelerated implementation of high-multiplier effect projects.
“To mitigate this, we have prepared a catch-up plan that prioritizes the accelerated implementation of projects with high multiplier effects,” Recto said.
The government’s strategy is to prioritize high-impact, fast-disbursing projects to maintain full-year gross domestic product (GDP) growth within the Development Budget and Coordination Committee’s (DBCC) projected range, he said.
Priority areas for investment include education, agriculture, health, and information and communications technology (ICT).
The Philippine economy expanded by 5.5 percent in the second quarter, a slight increase from 5.4 percent in the first quarter of the year.
The DBCC projects 2025 GDP growth of 5.5 percent to 6.5 percent, followed by 6 percent to 7 percent from 2026 to 2028.
Recto said he believes a major government cleanup of a recent flood control controversy would ultimately result in stronger institutions and faster growth.
“Now that we’re plugging growth leaks and reallocating funds to high-impact investments, we will only grow faster,” Recto said, adding that the controversy “has revealed that not all capital expenditures were translating into growth.”
Under the administration of President Ferdinand Marcos Jr., the Philippine economy has grown at an average rate of 5.9 percent, supported by low inflation, easing policy rates, strong consumer spending, and a vibrant labor market.
As of August 2025, employment reached 50.1 million.
Recto reaffirmed the Department of Finance’s (DOF) commitment to protect every Peso of taxpayers’ money, ensuring funds are spent on the “right things, at the right price, by the right agency and at the right time.”
