ECONOMIC GROWTH IN the third quarter is the slowest in 14 years owing to huge contraction in public construction because of corruption and the exclusion of the low earning poor and middle class from government plans, leading to reduced consumption.
Think tank IBON Foundation said GDP (gross domestic product) slowed down to four percent in Q3– the most sluggish since three percent growth 14 years ago (not counting the Duterte government-induced pandemic lockdowns).
A key factor in the recorded decline is the 26.2% contraction in public construction, attributed to stricter validation measures for Department of Public Works and Highways (DPWH) civil works and implementation of stricter requirements, which delayed billings and disbursements for government projects.
IBON said that the slowdown in government construction projects is an indirect confirmation of irregular spending practices where past laxity is actually systemic tolerance of ghost projects, overpricing and substandard implementation to pay for kickbacks to government officials.
The 26.2% contraction is deemed enormous and an indicator of how corruption-driven the past spending and the corresponding push to economic growth has been, bloating government spending, expanding the wealth of a select few instead of contributing to real economic development and improving Filipinos’ welfare.
NUMBERS DON’T LIE
During the first year of the Marcos administration, public construction growth surged by 27% in the third quarter of 2023, outpacing the first years of both Duterte (14.8%) and Benigno Aquino (-28.6%).
Household final consumption expenditure grew by just 4.1 percent, the slowest since the 2.6% in third quarter of 2010 or 15 years ago (also excepting the pandemic).
Sluggish household spending shows that Filipinos are struggling with job scarcity and insecurity, low incomes, and high prices due to bad government policies.
Corruption exacerbates these bigger problems by diverting massive public funds away from much-needed programs that benefit the poor and vulnerable.
HUGE JOBS DROP
Q3 employment fell by 327,000 to 48.6 million from 48.9 million in the same period 2024. The nationwide average minimum wage of P487 is not enough to keep up with the P1,225 living wage needed by a family of five.
With slower growth in the third quarter, the adjusted target of 5.5%-6.5% for 2025 is unlikely to be met. The trend of declining growth – from 7.7% in Q3 2022 to six percent in 2023, 5.2% in 2024 and four percent in 2025 – will likely continue in 2026.
The predicament has been attributed to the government’s refusal to invest in agriculture and Filipino industrialization.
POLICY OBSESSION
The government remains obsessed with market-driven policies favoring foreign investments over people’s interests and national economic progress.
Yet, foreign investments and other external factors like overseas remittances that the government relies on are vulnerable to the worsening global economic situation.
IBON emphasized the urgency for bold measures to fight corruption and revitalize the Philippine economy– through a comprehensive crackdown on systemic corruption targeting not just a few scapegoat politicians and contractors.
Public funds should be directed toward real economic development by strengthening domestic agriculture and Filipino industries, which can generate decent and sustainable livelihoods.
The welfare of ordinary Filipinos can be boosted through substantial wage hikes and subsidies, and support for small businesses and producers.