A forecast is not reform

A forecast is not reform | Daily Tribune

The projection that the Philippine economy could grow by at least five percent in 2026 has been welcomed as a sign of resilience after a year of slower public spending and cautious investors. The outlook, based on news reports citing the Department of Finance (DoF), points to solid fundamentals — a young workforce, steady remittances, and consumption that continues to anchor growth.

However, business leaders are quick to highlight an important warning: growth projections mean little unless long-promised reforms are executed decisively. Across the private sector, there is a broad sentiment that the Philippines does not suffer from a lack of plans but from inconsistent and uneven implementation.

The economy has repeatedly shown it can rebound from shocks. The real test is whether this recovery phase is used to fix structural weaknesses that have long constrained competitiveness.

Business groups such as the Makati Business Club and the Philippine Chamber of Commerce and Industry remain cautiously optimistic that the five-percent target is achievable, particularly if reforms are speeded up.

Both groups consistently highlight three priorities. First, infrastructure delivery must improve. While spending levels have increased, delays in right-of-way acquisition, procurement, and project approvals continue to blunt their impact. Faster completion of transport, logistics, and digital infrastructure would immediately lower business costs and raise productivity.

Second, regulatory predictability remains elusive. Despite laws meant to streamline processes, firms still face overlapping permit requirements and unclear timelines, particularly at the local level. Business groups continue to push for a true end-to-end single-window system that will reduce discretion and uncertainty.

Third, human capital development must better match industry needs. Skills mismatches persist in manufacturing, electronics, agribusiness, and information technology. Closer coordination among government, schools, and industry through updated curricula and expanded apprenticeships is critical to building a future-ready workforce.

Other organizations, like the Financial Executives Institute of the Philippines and several manufacturing and export associations, remain cautious. Their concern is that longstanding bottlenecks are becoming more binding. High electricity costs, expensive domestic logistics, and persistent red tape continue to weaken the Philippines’ standing versus its regional peers.

Without visible progress, they warn that investors may increasingly favor our neighbors that offer faster approvals and more predictable incentives.

Fiscal sustainability is another pressure point. Rising public debt and a still-wide budget deficit limit policy flexibility. Skeptical groups argue that spending programs must be paired with stronger tax administration, better collection, and rationalized fiscal incentives. There is also unease about policy continuity. Shifts in implementing rules and the leadership at key agencies create uncertainty that discourages long-term investment planning.

As a Poll Starter, a five-percent growth rate is respectable, but it is not transformational. What matters more is the quality and durability of growth that include investment-led expansion, stronger manufacturing and agriculture, and the creation of higher paying jobs. Reforms are the bridge between projections and reality.

Faster infrastructure delivery, lower power costs, simpler regulations, and better skills training would not only lift headline growth but also broaden its benefits. The Philippines has another chance to turn resilience into sustained progress. Forecasts alone will not carry the economy forward. Only consistent, credible, and well-executed reforms will.