Philippines 2026 economic growth target cut to 5-6% as graft concerns rise

The Southeast Asian tiger is losing its stride. The Philippines has slashed its economic growth target to between 5% and 6% for 2026, as corruption scandals cast a long shadow over the nation's fiscal health. President Ferdinand Marcos Jr. signed the state budget on January 5, 2026, following months of heated deliberations.

Philippines 2026 Economic Growth Target and Corruption Risks

According to Reuters, public outrage peaked in late 2025 after investigations revealed systemic graft linked to flood control projects in Manila. These concerns have not only fueled street protests but have also weighed heavily on investor confidence, prompting the government to adopt a more conservative growth outlook than previously anticipated.

Budget Focus: Health, Education, and Agriculture

Despite the lowered growth ceiling, the new budget aims to bolster the social safety net. Significant increases have been allocated to public health, education, and agriculture. However, the contrast with regional peers is stark; Vietnam reported an 8% growth rate in 2025, the highest in three years, putting pressure on the Philippines to prove it can still compete for foreign direct investment.