A widening deficit and falling revenue are ‘direct, quantifiable effects’ of an investigation into the flood-control scandal, economists say
3-MIN READ3-MIN ListenSam BeltranPublished: 12:00pm, 10 Mar 2026Updated: 12:02pm, 10 Mar 2026An investigation into allegedly corrupt flood-control projects worth billions of pesos is beginning to ripple through the Philippines’ public finances, slowing infrastructure spending and adding uncertainty to the government’s investment-driven growth strategy.The budget deficit widened 4.68 per cent to 1.58 trillion pesos (US$26.5 billion) in 2025, Treasury Bureau data showed, surpassing 2024’s record of 1.51 trillion pesos.
Despite slowing disbursements amid tighter scrutiny of public works projects, the deficit still breached the government’s 1.56 trillion-peso ceiling.
At 5.63 per cent of gross domestic product by year-end, the deficit was an improvement on 2024’s 5.7 per cent but remained above the government’s 5.5 per cent target.
This shows the corruption investigation is already taking its toll on government spending and investor confidence, analysts say.
