Corruption cuts economic growth

Economic growth slowed down in 2025 to just 4.6 percent, down markedly from the hefty 5.7 percent in the whole of 2024.

The 4.6 percent annual GDP growth is the lowest in five years, since the recession-inducing -9.6 percent in 2020 at the height of the COVID pandemic.

The four percent quarterly GDP growth rate in the third and fourth quarters of 2025 is the lowest in the past two years.

Originally, the government had targeted a GDP growth rate for 2025 of 5.5 percent to 6.5 percent. In terms of lost economic production, the loss was 0.9 percentage point based on the low projected growth rate of 5.5 percent, and 1.9 percentage points based on the high growth target of 6.5 percent.

A one percentage point GDP growth, assuming a P27 trillion GDP value, could have created 135,000 new jobs, solved our classroom shortage (of 165,000 classrooms) overnight, and covered our rice shortage four times.

“The flood control scandal has led to a growth rate in GDP of 4.6 percent in 2025,” explained Bangko Sentral ng Pilipinas Governor Eli Remolona on Tuesday, Jan. 6, during the first breakfast meeting for 2026 of the Tuesday Club, an informal breakfast group of senior journalists, top PR and advertising practitioners, politicians, and businessmen.

In 2026, Remolona assures, growth “will be better but not as we had hoped for, probably 5.4 percent. In 2027, we will recover with a growth rate of 6.2 percent, maybe.”

For the three years – 2025 (4.6 growth), 2026 (5.4), and 2027 (6.2) – the average annual growth rate will be 5.4 percent, a poor growth rate given that we want to be in upper-middle-income status and reduce poverty incidence to single digits, from the present 12 percent, by 2028.

Simply put, the central bank governor blames corruption for the slowing economy. Corruption hurts – and hurts badly.

“People realized that taxes are not really going to infrastructure spending. That hurts,” he said, adding, “it is not just the feeling that we are paying more taxes.” “More painful,” he stressed, “is to know that it [our tax money] is going to the wrong guys.”

The flood control corruption – or flood-gate (from flood control and Watergate) – hurt confidence across all sectors, said Governor Remolona: consumers or households, businesses, and investors, both local and foreign.

Consumer confidence went down to –22.2 percent in the last quarter of 2025, from the already negative –9.9 percent in the third quarter of 2025, a decline of 12.3 percentage points, or a massive 124 percent.

Overall business confidence for the next quarter went down from 43.3 percent in the third quarter of 2025 to 31.2 percent in the fourth quarter of 2025, a huge drop of 12.1 percentage points, or 30 percent.

Foreign direct investments (FDIs) are also in a massive downswing. In September 2025, two months after President Marcos Jr.’s “Mahiya Naman Kayo!” State of the Nation Address (SONA), monthly FDI fell to a five-year low of $320 million.

If this amount were annualized (multiplied by 12), $320 million would be equivalent to an annual FDI of $3.8 billion – a big drop, because we used to attract $10 billion in annual FDIs (2017).

Actual FDIs for the January–August 2025 period amounted to $5.179 billion, which, if divided by eight and the quotient multiplied by 12, yields a projected annual FDI of less than $8 billion – good, assuming the confidence is there. But confidence has evaporated. Like the missing trillions of a certain Zaldy Co.

When politicians, government engineers, and corrupt contractors steal your money, shouldn’t you shoot these people? Our Catholic upbringing prevents us from pursuing that option. However, Cathy Cabral has set the benchmark for the corrupt – kill yourself. With a knife, with pill overdose, or sliding down a slippery slope in Benguet.

Unless the corrupt are eliminated in our midst, the economy will continue its slide along a slippery slope to perdition, hunger, malnutrition, poverty, and mass unrest.

Who are the wrong guys who stole our tax money? The public knows by now. They are the corrupt senators, the corrupt congressmen, the corrupt DPWH engineers, and the corrupt private contractors and “cong-tractor” congressmen.

The three-person Independent Commission for Infrastructure (ICI), after three months, has identified almost 100 individuals, “including senators, congressmen, top and mid-level former and current officials of the DPWH, contractors, and even a sitting commissioner of the Commission on Audit,” reported ICI Chairman Justice Andres Reyes on Dec. 26, 2025.

ICI has eight referrals and cases with the Ombudsman, including its joint referrals with the Department of Public Works and Highways.

As of Dec. 26, 2025, ICI had frozen P20.3 billion in assets, including 6,538 bank accounts, 367 insurance policies, 255 motor vehicles, 178 real properties, 16 e-wallet accounts, three securities accounts, and 11 air assets such as planes and helicopters.

Incidentally, at the time of her death by suicide, Maria Catalina Cabral was facing four sets of charges: 1) direct or indirect bribery, 2) corruption of public officers, 3) plunder, and 4) violation of Section 7 (a, b, and d) and Section 8 of RA 6713.

RA 6713 is an act establishing a code of conduct and ethical standards for public officials and employees, to uphold the time-honored principle of public office being a public trust, granting incentives and rewards for exemplary service, enumerating prohibited acts and transactions, and providing penalties for violations.

Section 7 of RA 6713 refers to prohibited acts and transactions because of conflict of interest.

Section 8 refers to declarations by public officials, under oath, and the public has the right to know the assets, liabilities, net worth, and financial and business interests, including those of their spouses and of unmarried children under eighteen (18) years of age living in their households.

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