THE ECONOMY GREW ONLY 2.3 PERCENT
The Philippine economy grew by only 2.3 percent year-on-year in the second quarter of 2026.
That is down from 2.8 percent in the first quarter and is the weakest year-on-year quarterly growth since 2021.
First-half growth is now only 2.6 percent.
The figures underneath the headline number are even more troubling.
Construction investment fell 14.8 percent.
Gross capital formation, which includes investment, fell 9.2 percent.
Household consumption grew by only 2.8 percent.
General-government construction fell 32.4 percent.
Economic Planning Secretary Arsenio Balisacan says the flood-control scandal contributed to the slowdown because infrastructure spending became more cautious and investor confidence weakened.
That is the government’s assessment. The GDP figures cannot tell us exactly how much of the slowdown was caused by corruption.
But the connection is worth following.
Corruption can damage the economy more than once.
Money can be wasted on ghost or overpriced projects. Substandard infrastructure can deliver less value than taxpayers paid for. Then, when the scandal breaks, legitimate projects may also slow down while contracts and spending are reviewed.
The government now has to clean up questionable infrastructure spending without freezing legitimate projects for too long.
Inflation also averaged around 5 percent during the first seven months of the year.
That leaves the Bangko Sentral facing a harder trade-off: inflation remains above target while economic growth is weakening.
Its next policy meeting is scheduled for August 27.
WHAT TO WATCH
Watch whether government construction recovers in the third quarter, whether private investment starts growing again, and whether the administration can restart legitimate infrastructure spending without weakening anti-corruption safeguards.