The Philippine economy expanded by 4.4% in 2025, marking its slowest non-pandemic growth in 14 years, as corruption issues and climate-related disruptions dragged down performance, official data released Thursday showed.
The full-year growth fell well below the government’s revised target of 5.5% to 6.5% announced in June, which had already factored in global uncertainties and the impact of new US tariffs.
It was the weakest expansion since 2011, when the economy grew by 3.9%, excluding the 9.5% contraction recorded in 2020 during the COVID-19 pandemic.
Economic output also slowed sharply in the last quarter of the year, with October to December growth at just 3.0%, down from 5.3% in the same period a year earlier. This marked the second consecutive quarter that growth targets were missed.
Economic Planning Secretary Arsenio Balisacan said a major corruption scandal involving alleged bogus flood control and infrastructure projects significantly dampened business and consumer confidence.
“Admittedly, the flood corruption probe scandal weighed on business and consumer confidence,” Balisacan said.
Construction activity declined sharply following the controversy, which erupted in July after President Ferdinand “Bongbong” Marcos highlighted the issue in a national address.
The investigation has since implicated several government officials, lawmakers, and construction firm owners.
Balisacan noted that if public construction spending had remained steady, economic growth would have been considerably higher.
“If public construction (had not been) been flat, GDP for 2025 would have actually increased from 4.4 to 5.5%,” he said, referring to the sector’s 0.24% contraction for the year.
He added that extreme weather conditions also took a toll on the economy.
“Weather and climate-related disruptions affected productivity and domestic demand, as heatwaves, flooding, missed workdays, and school suspensions weighed on overall economic activity,” he said.