The Philippine economy could have grown by six percent if flood control projects had not been hijacked by corruption, resulting in a loss of as much as ₱119 billion in economic output, according to President Ferdinand Marcos Jr.’s chief economic manager.

While Finance Secretary Ralph G. Recto is upbeat about hitting the midpoint of the new output growth goal of 5.5 percent to 6.5 percent, he lamented the serious drag corruption has on gross domestic product (GDP) expansion annually.

“For sure, [anomalies in flood control projects negatively impact growth]. We just learned that this is the extent of the problem in flood control. So maybe if that money was spent better, we could have grown by six percent. That’s the point,” Recto told reporters on the sidelines of the Development Budget Coordination Committee (DBCC) briefing at the Senate finance committee on Tuesday, Sept. 2.

Corruption in flood control projects implemented by the Department of Public Works and Highways (DPWH) has caused an average economic loss of ₱42.3 billion to ₱118.5 billion from 2023 to 2025.

Recto also expressed “grave concern and dismay” over the reported anomalies and corruption in the DPWH flood control projects, warning that ghost projects rob the nation of jobs and opportunities.

“Raising revenues is no joke. And then you see that these are not going to the right projects and for the welfare of the people, with some even turning into ghost projects,” Recto lamented.

On the employment front, corruption in infrastructure projects results in the loss of around 95,000 to 266,000 jobs that could have been created annually on average. Recto said the DOF has studied how much faster the economy could have grown and how many jobs could have been created if flood control funds had been properly used.

“It’s possible that our growth would have increased by six percent if there was no problem,” Recto said. “We could have grown faster if corruption was reduced, especially if it’s a ghost project.”

To recall, the local economy shrank by 9.5 percent during the pandemic (2020). It rebounded in 2021 with a full-year growth rate of 5.6 percent. This further accelerated to 7.6 percent in 2022 but slowed to 5.6 percent in 2023.

Last year, output expansion showed a modest improvement, rising to 5.7 percent. For the first semester of the year, GDP growth averaged 5.4 percent, with economists expecting it to slow in the second half.

“Our country is facing many challenges right now. We still have wars all over the world. We have trade wars, geopolitical tensions with China. It’s not good that we still have this problem in our country,” Recto said.

“That’s why investor confidence is already affected by all the external challenges. We should not add to this domestically. That’s why we support the investigation being done by the Senate and possibly by an independent commission of the executive,” the Finance chief added.

To recall, the Cabinet-level Development Budget Coordination Committee (DBCC) has narrowed the growth target range for 2026 to 2028 to six percent to seven percent, from the previously more ambitious six percent to eight percent.