Philippine economic growth is expected to fall short of the government’s downscaled target this year as the fourth quarter is likely to again falter after a weaker-than-expected third-quarter expansion of just four percent, according to economists from De La Salle University (DLSU).

“Our December 2025 forecast points to emerging signs of short-term deceleration in the Philippine economy,” said Jesus Felipe, Mariel Monica Sauler, Gerome Vedeja, Clarence Gabriel Fernandez, and Seth Paolo Paden in DLSU’s report of the Philippine economy for December 2025, published on this week.

Following the sharp slowdown in the previous quarter, DLSU economists now project economic growth at 4.4 percent in the final quarter of 2025. For the full year, they forecast gross domestic product (GDP) growth at 4.8 percent—below the 5.7 percent posted in 2024 and lower than their earlier five-percent projection for 2025.

Earlier, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan conceded that the Philippines is likely to miss its full-year economic growth target of 5.5 to 6.5 percent amid a worsening corruption scandal, noting that even the lower end of the goal is “very unlikely” to be reached.

Missing this year’s growth goal will make it three years in a row for the Marcos Jr. administration, which also fell short of achieving GDP targets in 2023 and 2024.

The DLSU economists see GDP growth at 4.8 percent in 2026, before rising to 5.9 percent in 2027—both below the government’s six- to seven-percent annual target for 2026 to 2028.

“The Philippine economy remains off track in meeting its growth ambitions over the next two years,” they said.

The economists noted that weakened confidence and lower demand, alongside ongoing governance concerns and corruption scandals, continue to weigh on private spending and investment.

“Private consumption growth has continued to lose momentum, particularly toward late 2025,” they said, adding that consumer spending is expected to weaken sharply to 2.5-percent growth in the fourth quarter, diverging from the usual holiday-season surge.

They added that despite inflation remaining below the central bank’s target range of two to four percent, rising unemployment and underemployment are expected to keep consumer spending growth subdued, at 4.2 percent in 2025, 4.5 percent in 2026, and 3.9 percent in 2027.

The latest Philippine Statistics Authority (PSA) data showed that headline inflation averaged 1.6 percent during the first 11 months of 2025. Meanwhile, the unemployment rate rose to a three-month high of five percent in October, representing around 2.54 million jobless Filipinos, while underemployment or the low quality of jobs and salaries affected about 5.81 million Filipinos.

“We expect the average inflation rate for 2025 to be at 1.68 percent,” the economists said.

The DLSU economists added that public-sector spending is expected to rebound to 6.9-percent growth in the fourth quarter of 2025, after slowing to 5.8 percent in the previous quarter.

Despite delays in government disbursements linked to corruption probes, annual public spending is projected to remain elevated at 9.6-percent growth, driven largely by strong first-quarter expenditures. Fiscal spending is expected to return to double-digit growth over the next two years, reaching 14.5 percent in 2026 and 12.4 percent in 2027.

“Deferred projects and major infrastructure spending would eventually have to be resumed and carried forward. This acceleration would also likely depend on the ongoing corruption investigations reaching a credible resolution—not merely through the punishment of those culpable, but through institutional mechanisms that ensure accountability and restore public trust,” the DLSU economists said.