Economic growth in the third quarter of 2025 is the slowest in 14 years, largely due to a huge contraction in public construction, exposing the corruption-driven nature of the Philippine economy, said research group IBON. Worse yet, the largest drop in household spending in 15 years underscores how this drastically slowing growth has been so exclusionary. It enriches those in power while leaving tens of millions of jobless, job-insecure and low earning poor and middle-class Filipinos behind.
Gross domestic product (GDP) growth slowed to just 4% in the third quarter of 2025 – the most sluggish since the 3.0% growth 14 years ago in the third quarter of 2011 (not counting the period of Duterte government-induced pandemic lockdowns). A key factor in this decline was the 26.2% contraction in public construction. The Marcos Jr administration attributed this 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 marked slowdown in government construction projects is 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 enormous and an indicator of how corruption-driven so much of past spending and the corresponding push to economic growth has been.
Such corruption has bloated government spending, expanding the wealth of a select few instead of contributing to real economic development and improving Filipinos’ welfare. The group noted that during the first year of the Marcos Jr 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%).
The slowdown also stresses the long-time and even bigger problem of growth being so exclusionary, said IBON. 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.
Employment fell by 327,000 to 48.6 million in the third quarter of 2025 from 48.9 million in the same period last year. Meanwhile, the nationwide average minimum wage of Php487 is not enough to keep up with the Php1,225 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 the 6% in 2023, 5.2% in 2024 and 4% in 2025 – will likely continue in 2026. This is because the government still refuses to invest in agriculture and Filipino industrialization.
Instead, the government remains obsessed with market-driven policies favoring foreign investments over people’s interests and national economic progress. However, the 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 urgent need for bold measures to combat corruption and revitalize the Philippine economy. There should be a comprehensive crackdown on systemic corruption – not just targeting 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.
