Balisacan Bets on Flood Control Cleanup to Revive Economic Growth

MANILA, Philippines — The Philippine economy now needs to grow by an average of 4.4 percent in the second half to meet the lower end of the government’s growth target, with Socioeconomic Planning Secretary Arsenio Balisacan banking on a fourth-quarter recovery in public construction as the flood-control scandal moves toward greater accountability. In an interview with Inquirer editors and reporters on Friday, Balisacan said the arrests made in connection with the flood-control corruption scandal could “help change the narrative” on public sentiment. READ: Biz groups: Flood-control probes shouldn’t end with filing of charges This could potentially give government agencies greater confidence to mobilize infrastructure projects. “We were hoping that the second half would be better than the first half. We want to make sure that they (infrastructure agencies) are able to move and get their projects implemented in the second half,” Balisacan said. “If we can just get that moving out, we should be able to recover quickly,” he added. Prior to the release of second-quarter data, Balisacan said the economy needed to grow by an average of 3.7 percent in the second half to hit the revised 3.5 to 4.5 percent growth target for 2026. But that requirement has now risen to 4.4 percent after first-half economic growth came in at 2.6 percent, weighed down in part by a 32.4-percent contraction in public construction. Balisacan said the government would need to at least bring public construction back to zero growth to add about 1 percentage point to the gross domestic product. Recent developments in the flood-control scandal include the arrest this week of former House Speaker and incumbent Leyte Rep. Martin Romualdez on plunder charges, amid allegations that he and former Ako Bicol Rep. Elizaldy Co received more than P7 billion in kickbacks from government projects between 2022 and 2025. READ: Biz group to gov’t: Rid 2027 budget of dubious line items Co was likewise charged before the Sandiganbayan. “There has to be a clear closure. Until we get the sentiment back that our institutions are trustworthy, who would want to invest in us?” Balisacan said. “We hope that this development will change the narrative … Our politics has always been noisy, but we’ve managed to grow quite respectably over the last 15 to 20 years. Investors know that politics can be noisy, but as long as economic policies are credible and respected, they will continue to invest,” he added. Still, Balisacan noted that other factors could constrain the recovery in infrastructure spending, including the rainy season. INQ