Marcos administration turmoil shakes economic outlook

The Marcos administration’s ongoing political turmoil is hampering long-term economic growth, according to political scientist and WR Advisory Group Senior Adviser for public affairs Dr. Julio Teehankee. Speaking at a panel discussion organized by the Makati Business Club (MBC) on Wednesday, Teehankee emphasized that the business and political sectors in the Philippines are deeply intertwined, with bureaucracy and policymaking shaping corporate and financial decisions.

“[The] business and [the] private sector thrive on stability. And stability will provide profit if there is a strong government, strong institution, application of rule of law,” Teehankee said. He added that the state must serve as a “neutral arbiter and balancer of interest,” warning that poor governance remains the biggest barrier to economic reform.

Teehankee noted that while every administration has placed economic policy at the center of its agenda, political instability and the pursuit of power cause public officials to lose sight of social equity—an issue he said is now unfolding under the Marcos administration.

He pointed to the ongoing flood control scandal within the Department of Public Works and Highways (DPWH) and the Marcos family’s internal conflicts, saying these “have effectively disrupted policy making and the pursuit of reforms.”

Teehankee said the country’s disappointing 4 percent gross domestic product (GDP) growth in the third quarter is partly linked to the 26.2 percent contraction in public construction. He added that the scandal has been “politicized and weaponized” by several officials, including President Ferdinand R. Marcos Jr.

Following the Bagong Pilipinas bloc’s failure to secure a Senate majority in the 2025 midterm elections, Teehankee said Marcos appeared to turn whistleblower on his own administration in an effort to gain political advantage. “So BBM needed a win, and during his SONA, suddenly he flipped the narrative and said, ‘mahiya naman kayo (you should all be ashamed)’” in reference to the ghost flood control projects in Bulacan.

According to Teehankee, the move backfired. Instead of boosting his standing, public anger and frustration intensified, leading to widespread demonstrations demanding accountability. “It has destabilized governance,” he said.

He also cited the growing rift between the Marcos and Duterte camps—particularly between the President and Vice President Sara Duterte—as another major obstacle to economic stability. He warned that the struggle for power has “fundamentally fractured the ruling coalition, creating an environment of intense political instability that directly impedes effective governance and risks delaying key structural economic reforms.”

“We were promised unity, and what we have gotten so far is disunity,” he added. “If they don't eliminate each other both literally and politically, it will cost them their entire political fortunes.”

Despite these challenges, Teehankee expressed optimism, saying Filipinos have become more vocal in demanding better leadership.

“The quality of leaders that we elect and put in government will affect how we implement all of these reforms necessary for economic development,” he said.

Teehankee urged business groups to once again take a proactive role in governance reform. “So as a political scientist and an advocate of political and electoral reforms, it's high time that groups like the MBC, which has been in the forefront of pushing for political reforms in the past, should again take up that mantle and really join the public who are now sick and tired of corruption in this country,” he added.