As a massive corruption scandal involving “ghost” flood control projects continues to unfold in the Philippines, big business lobby Makati Business Club (MBC), the Washington-based multilateral lender World Bank (WB), and think tank Capital Economics have raised concerns over how graft and poor governance could derail long-term growth, investor confidence, and social stability.

MBC—composed of the country’s top executives—urged the government to reject populist calls for a mass resignation of officials and instead focus on institutional reforms that will “make our democracy work” and ensure accountability.

“Simply changing the people in power will not achieve the lasting improvement in the country’s governance,” MBC said in a statement on Monday night, Oct. 6, following Senator Alan Peter Cayetano’s call for snap elections over the weekend.

The business group cited the ongoing investigation into corruption in flood control projects, saying the public’s demand for transparency must be met with concrete, systemic responses.

“These are immediate measures that need to be put in place for meaningful reforms that the country [needs],” the group said.

At the same time, the WB said the Philippines’ ongoing corruption investigations present an opportunity to embed transparency, strengthen institutions, and improve governance.

Speaking during a briefing on the sidelines of the Philippine Development Forum 2025 on Monday, WB division director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said tackling corruption could improve the investment climate and boost investor confidence, emphasizing that these reforms are critical for sustaining the country’s growth as it transitions into upper-middle-income country (UMIC) status.

“The short-term question actually would be a good opportunity to enhance its long-term growth,” Mustafaoğlu said.

He noted that the WB is working with the government on projects that digitalize public systems and improve monitoring, adding that such programs “will also help increase transparency and support a more transparent and efficient government system and structure.”

Mustafaoğlu said development partners are ready to extend around $50 billion, or about ₱2.9 trillion, in assistance over the next three years to support health, education, infrastructure, and governance reforms.

“The next three years are decisive. We will act with urgency and focus, working double time with the government to meet the Philippine Development Plan (PDP) targets and deliver tangible improvements in people’s lives,” he added.

In an Oct. 6 report, Capital Economics senior Asia economist Gareth Leather warned that corruption and inequality have triggered political unrest across the region—including in the Philippines—and could threaten policy credibility if not addressed through structural reforms.

Capital Economics noted that a widely publicized report on the mismanagement of flood control funds served as the “spark” for recent protests in the Philippines, reflecting broader frustration over corruption, job insecurity, and uneven economic gains not only in the country but also across Asia.

“While the immediate economic and market impact is likely to be limited, a greater risk lies in governments’ responses—often short-term income-boosting measures that could undermine macroeconomic stability and fail to address the structural issues driving the unrest,” the think tank said.

The report added that governments across Southeast Asia often resort to fiscal stimulus or subsidies to appease public anger instead of addressing weak institutions and governance, leaving them vulnerable to “repeated cycles of unrest.”