THE ASIAN Development Bank (ADB) is probably going to downgrade its Philippine gross domestic product (GDP) growth forecasts for this 12 months and next 12 months, as a graft scandal hurt investments and public spending.
“We were revising things downward,” ADB Country Director for the Philippines Andrew Jeffries told reporters on the sidelines of an event on Dec. 4.
The downward revision may likely cover each this 12 months and 2026, he added.
The multilateral lender earlier gave a 5.6% GDP growth projection for the Philippines this 12 months, still inside the federal government’s 5.5-6.5% goal.
Asked if the revised projection can be lower than the federal government goal for 2025, Mr. Jeffries replied: “Likely.”
For 2026, the ADB sees the Philippines growing barely faster at 5.7%, but still below the federal government’s 6-7% growth goal.
“By the best way, it still might change (this week). Nevertheless it is trending down from what we had earlier released for each years,” Mr. Jeffries said.
The ADB said it’ll release its latest Asian Development Outlook (ADO) on Dec. 10, which is able to include revised growth forecasts for the Philippines and reflect the impact of the flood control corruption scandal.
The Philippine government is currently investigating a multibillion-peso public works scandal involving government officials, lawmakers and personal contractors. This corruption scandal has weighed on third-quarter economic growth as spending slowed and consumer and investor sentiment declined.
The Philippine economy grew by 4% within the third quarter, the slowest growth seen in over 4 years. This brought average GDP growth to five% in the primary nine months.
The ADB earlier warned widespread corruption can impact economic growth and investor sentiment, saying it’s a “heightened risk.”
Despite this, Mr. Jeffries said he expects the economy to rebound in 2026, as he expects a recovery in public infrastructure spending that would lift GDP growth.
“The query is when and we predict (public investment) goes to get better faster than that. We predict, and I believe it’s consistent with what we’ve seen from others, that next 12 months there can be growth in comparison with this 12 months,” he said.
Mr. Jeffries also said the recovery would likely be faster than the general public infrastructure slowdown in 2011, when it took 4 quarters for public investment to rebound.
While the primary half of 2025 was upbeat and “generally rosy,” he noted the Philippine economy had a rough second half amid the flood control mess.
To bolster investor sentiment, Mr. Jeffries added that the federal government should attract more foreign direct investment while pursuing reforms and accountability.
“What can the federal government do about it, I believe, is just take the priority seriously and push forward with a number of the changes and reforms and enhancements which have been talked about,” he said.
Earlier, Finance Secretary Frederick D. Go said he expects the Philippine GDP growth to return to five.5% as early as first quarter of 2026 as government spending bounces back, Bloomberg reported last week.
Former Finance head and Executive Secretary Ralph G. Recto had also anticipated an economic comeback next 12 months with sustained low inflation and stronger government of the Marcos administration.
Meanwhile, Economy Secretary Arsenio M. Balisacan said the Development Budget Coordination Committee is ready to fulfill on Dec. 9 to review the macroeconomic assumptions and targets after he conceded that this 12 months’s growth goal is unlikely to be achieved.
Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said a recovery next 12 months is feasible, but not “automatic.”
“The flood control scandal hit confidence hard, and trust takes time to rebuild. If reforms are credible and infrastructure spending resumes, GDP could bounce back to six% territory,” he told BusinessWorld in a Viber message over the weekend.
Mr. Ravelas also noted that investor sentiment is hinged on transparency,
“Show them governance is improving, and capital will follow,” he said.
In a recent European Chamber of Commerce of the Philippines 2025 Business Sentiment Survey Report, it found that 70.3% of respondents said they expect business activity to rise, while 26.7% foresee no change in the following 12 months. Just 2.9% anticipate a decline. — Aubrey Rose A. Inosante