Corruption scourge chokes 2026 prospect

Economic activity in 2026 will be affected by the spillover from the corruption scandal.

“It will be the heaviest weight pulling down the economy particularly in the last quarter of 2025 wherein we see just a 4 percent growth that is mainly driven by the huge decline when it comes to government spending,” Matt Arez, an economist at Oconomia Advisory and Research Inc., said.

“All of the easing moves by the Bangko Sentral ng Pilipinas, which started late last year up to now, could only do so much. We still have to see some reforms or at least some positive moves when it comes to fiscal policy in order to fully realize a rebound in 2026,” he said.

The analyst said there’s already some transparency “hopefully” happening in the corruption scandal but “we’re waiting to see whether the budget will be approved or reenacted in the first week of 2026.”

Tax amnesty looms?

When it comes to taxes, Arez said a lot of sectors are wishing for some relaxation on taxes or amnesties, and “even some reviews on the value added tax (VAT), which are all positive moves that could be detrimental when it comes to the tax base.

But on the overall economy, if that extra disposable income could be used to um to do a lot more activities, that would become more helpful.

Then when it comes to spending that is where we should see a lot more improvement or a lot more deliberate action from especially when it comes to the bank to the budget for next year.

“If we can see that the budget is positive towards more spending especially on productive sectors and hopefully that could be used the right way or in its intended way. that would be the positive catalyst that is needed to see better growth for 2026,” he explained.

Bull run from tech

What is causing the surge in US stocks despite the overall uncertainties cause by the punitive tariffs of President Donald Trump?

Tech stocks, with the advent of the artificial intelligence (AI) revolution, are leading the bullish sentiment, particularly those listed on the NASDAQ.

And we can see that share prices are still up, and earnings are still beating expectations.

Global markets, especially NASDAQ and major stock indices, are still up despite the political headwinds, he added.

US analysts, however, expect US inflation to rise because of the additional taxes imposed on goods.

Wall Street stocks edged down from records on Friday amid holiday-thinned trading, while precious metals extended their year-long surge to record highs.

Silver topped $75 an ounce for the first time, while gold also reached a fresh record price, as geopolitical risk remains elevated amid US military and economic pressure on Venezuela.

Precious metals have surged in 2025 as uncertainty about US policy under President Donald Trump and the prospect of further Federal Reserve interest rate cuts have weakened the dollar, reducing its appeal to investors.

3 finished lower

Major indices in New York moved sideways for much of a quiet, post-Christmas session. All three finished marginally lower, with the Dow and S&P 500 both slightly below Wednesday’s records.

But market watchers remain bullish ahead of next week’s finale to 2025. Stocks often rise during the peak festive period, sometimes resulting in a “Santa Claus rally.”

“We’ve had a good week so with the weekend ahead, and also with the light trading for next week, possibly you had people who are just looking to take some profits,” CFRA Research’s Sam Stovall said. “But I still think that we’re going to end the year on a high note.”

But we can still see some firms absorbing some of those increased costs from tariffs, as well as some tariff relaxations or postponements, according to Arez.

The lag effect would likely begin next year, especially once these costs are passed on to final consumers.

“What about the Philippines? For a long time, we’ve been, let’s say, insulated from trade issues. Are we going to start feeling the pinch next year?” the analyst asked.

The perception that the country is insulated from trade tensions stems from the economy’s dependence on domestic activity, including household and government spending.

“When it comes to the trade sector, that would start to become something to worry about. But then there’s um there is another factor that we must also factor in when it comes to our trade performance, and that would be exchange,” he said.

Despite gloomy sentiment about the peso’s weakening against the dollar, the currency’s depreciation may even help improve the export sector.