The business sector said that the slowdown in the country’s GDP in the third quarter is a clear indication on the extent of damage caused by corruption on the economy and serves as a strong wake up call to continue the fight for good governance.
Elizabeth H. Lee, chairperson of the Federation of Philippine Industries (FPI), said the slowdown to 4 percent is a “wake up call.” Because of the massive corruption scandal in government infrastructure projects, government spending has slowed down, consequently affecting consumption expenditures.
“People are spending less as prices bite and confidence dips. Government spending slowed down too, with flood control projects stuck in controversy and procurement delays. Investments barely moved because businesses are cautious with all the corruption probes and policy uncertainty,” said Lee.
On top of that, she said, typhoons disrupted farms and factories, while global pressures added even more weight. Put together, it’s no surprise growth came in at its weakest pace in years.
But she stressed that what is still front and center is the anti-corruption drive. “We must take the bitter pill of anti corruption reforms to get better and move forward—anchored on transparent infrastructure spending,” she said.
For local industries, Lee said, this is also an opportunity to regain momentum, with government prioritizing locally sourced materials that meet product standards, priced correctly to benefit both manufacturers and public projects. “This is the path to rebuilding confidence and putting growth back on track,” she said.
The Makati Business Club through its executive director Apa Ongpin agreed with Secretary Arsenio M. Balisacan of the Department of Economy, Planning, and Development that the private sector should continue to champion good governance.
“Our role as watchdogs is all the more vital and these results show how good governance is good economics. Public officials must be held accountable, in order for the country to encourage both domestic and foreign investment,” said the MBC statement.
The significantly lower third quarter GDP growth result of 4 percent illustrates how the corruption scandal has begun to affect our macroeconomic performance.
“This is an indirect effect: the corruption scandal did not directly slow economic growth, but instead, it slowed government spending, as many programmed infrastructure projects are on hold or even in limbo, as the DPWH and the ICI investigate them. Government spending is an important driver of economic growth,” the statement added.
