‘Accountability to aid recovery’

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December 31, 2025 | 12:00am

Economists say restoring public trust vital to growth

MANILA, Philippines — The country’s economic rebound next year will hinge on improved efficiency in public spending and accountability for officials implicated in the alleged corruption surrounding flood control projects, with economic growth projected to exceed five percent, according to economists.

Noting that redeeming trust requires visible compliance, Philippine Institute for Development Studies senior research fellow John Paolo Rivera said key priorities for next year include spending efficiency, tighter procurement and food price stability, among others.

“A return to six to seven percent growth is still possible, but only if confidence improves quickly and public and private investment rebounds. Otherwise, growth is more likely to stay in the mid-five percent range,” he said.

The Cabinet-level Development Budget Coordination Committee has set next year’s growth target at six to seven percent, but the economic committee is expected to revise both economic targets and revenue projections after its early December meeting.

Rivera said restoring public trust would require visible accountability, including pursuing cases and enforcing rules, clearer policy communication and consistent implementation across government agencies.

“Onto 2026, urgent steps are to restore spending efficiency and not just spend more but tighten procurement and transparency, stabilize food prices through supply-side fixes and accelerate investment facilitation through affordable power costs. Permits and infrastructure remain decisive,” he said.

The government’s infrastructure spending fell for the fourth consecutive month in October to P65.9 billion as concerns over reports of corruption in flood control projects continued to weigh on disbursements, according to the Department of Budget and Management.

Finance Secretary Frederick Go has urged government agencies to forgo low-yield projects and prioritize spending that ensures greater efficiency and stronger economic impact in 2026, following reported losses and alleged fund misuse tied to flood control projects.

Meanwhile, Security Bank chief economist Angelo Taningco said there is a “glimmer of hope” for the next quarter and year, suggesting that businesses and consumers remain able to invest and spend, though many are taking a cautious approach.

Noting that lessons from recent setbacks could reset momentum in 2026, Taningco said the economy would rebound with gradual improvement.

“First two quarters of 2026, it could be above five percent, but not hitting the six percent that we envisioned. But hopefully closer to six percent in the second half. And therefore, we have penciled in a gross domestic product growth forecast for 2026 of about 5.6 percent,” he said.

Taningco added that clearer guidance on the budget and its spending could help businesses and consumers advance investment plans, while lessons learned may prompt the government to implement a larger yet more efficient budget, which could restore confidence.

The economist said the country could have reached six percent growth if not for inefficiencies in public infrastructure, particularly flood control projects.

“Moving forward, we think that there is still room for our targets to be hit. Although I understand that we’re going to have a revised target to be released pretty soon, a more realistic type of target,” he said.

“And that is because we still face headwinds, not just locally, but also abroad. We still have the high tariffs in place,” Taningco added.

Former finance chief Ralph Recto also said the economy could have grown by as much as six percent without the economic losses from flood control projects that may have reached P118 billion from 2023 to 2025.

Rizal Commercial Banking Corp. chief economist Michael Ricafort is projecting that the Philippine economy will expand between 5.5 to six percent next year.