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.