World Bank Cuts Philippine Growth Forecast Amid Flood Control Corruption Fallout

The World Bank cut its 2026 growth forecast for the Philippines to 3.7%, down from an earlier 5.3% projection, pointing to the flood control corruption scandal as a drag on investor confidence and fixed investment, which it now expects to contract by 0.5%.

Finance Secretary Ralph Recto told a Senate budget briefing that the government estimates the country lost between ₱42.3 billion and ₱118.5 billion to "ghost" flood control projects from 2023 to 2025.

Officials said the government funded 9,855 flood control projects worth roughly ₱545 billion between July 2022 and May 2025. An initial audit found that about 20% of that spending, or roughly ₱100 billion, went to just 15 contractors.

Economic managers said restoring investor confidence would depend on the pace and visible results of the ongoing anti-corruption cleanup, including prosecutions and stronger procurement oversight.