The ASIAN Development Bank (ADB) is likely to downgrade its Philippine gross domestic product (GDP) growth forecasts for this year and next year, as a graft scandal hurt investments and public spending.

In its latest Asian Development Outlook, the ADB said its gross domestic product (GDP) growth forecast for the country was trimmed to 5% in 2025 from its earlier projection of 5.6%.

It also cut its growth outlook for 2026 to 5.3% from 5.7%.

The multilateral lender said its updated growth forecasts reflected “reduced public infrastructure spending.”

This, as GDP growth slowed to 4% in the third quarter of 2025, bringing the year-to-date average to 5% for the year, “mainly due to lower government spending on flood control projects amid investigations and stricter controls.”

The ADB’s trimmed outlook echoed the World Bank’s GDP growth downgrade for the country to 5.1% this year from its previous expectation of 5.3%, citing subdued investor confidence amid the flood control corruption mess.

Both ADB and World Bank’s outlooks are consistent with the Department of Economy, Planning, and Development’s (DEPDev) expectation that the economy is “very unlikely” to hit the government’s growth target range of 5.5% to 6.5% for 2025 as corruption concerns dampen both consumer and investor sentiment. 

Nevertheless, the Manila-based multilateral lender said “low inflation and ongoing monetary easing should sustain domestic demand, supporting stronger growth in 2026.”

“However, uncertainties arising out of investigations of publicly-funded infrastructure projects and weather-related disruptions pose downside risks,” the ADB said.