Palace bullish on poverty reduction, status upgrade

Malacañang Palace on Wednesday said the government, despite headwinds, remains optimistic about achieving upper-middle-income status and reducing poverty in the country within President Ferdinand R. Marcos Jr.’s term.

This, amid the International Monetary Fund’s (IMF) reducing its previous 5.6 percent growth forecast for the Philippines’ gross domestic product (GDP) to 4.1 percent, as indicated in its World Economic Outlook (WEO) published on Tuesday.

The IMF noted the “(Middle East) war shock compounding the negative base effects from a weaker-than-expected 2025 outturn related to a sharp decline in public investment and confidence.”

Moody’s Ratings revision

Meanwhile, Moody’s Ratings also revised it’s Philippine GDP growth projection to 4.9 percent from 5.5 percent due to the surging energy costs, global tensions, and weakened domestic demand.

However, Moody’s maintained a Baa2 stable rating for the Philippines, citing high growth potential, while the inflation forecast for the Philippines is expected to average 3.7 percent in 2026.

Palace Press Officer Presidential Communications Office Undersecretary Claire Castro said by July 2026, the World Bank will indicate whether the Philippines has met the income threshold for upper-middle-income status based on 2025 performance, citing data provided by Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan.

“Formal classification may require additional years of sustained results. We remain confident this will be achieved within the term of the Marcos administration,” Balisacan said in a statement read by Castro.

“Despite geopolitical tensions and heightened uncertainty, we will stay the course in stabilizing the economy and strengthening social protection to sustain poverty reduction,” he added.

As for the assessment of weaker-than-expected reform momentum and a decline in public investment and confidence, Balisacan said most Asian economies will likely miss their growth targets this year due to global supply chain disruptions and heightened uncertainty stemming from the Middle East.

The President has issued Executive Order 110 declaring a state of national energy emergency in light of the ongoing conflict in the Middle East.

Measures to ease public burden

Among the recent government measures to ease public burden are the P10 per liter diesel discount for public utility vehicles (PUVs), suspension of the excise tax imposed on liquefied petroleum gas (LPG) and kerosene, and cash assistance to tricycle drivers and TNVS drivers, as well as toll discounts for jeepney, buses, and trucks.

The government also rolled out the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) Para sa mga Tsuper, and intensified service contracting in the transport sector.

To ensure food security, the government expanded the P20 rice program and transferred fuel and fertilizer subsidies to farmers and fisherfolk to cushion the impact of rising petroleum prices.

Proposed suspension of pension premium contributions

Meanwhile, Castro said the government is committed to studying proposals to suspend pension premium contributions for members of state-run pension funds, and outlined measures to ease the burden on pensioners and contributors.

“We are studying it now, but the SSS (Social Security System), GSIS (Government Service Insurance System) and Pag-IBIG (Home Development Mutual Fund) have already did something for our kababayan as an intervention in the Middle East war.”

Castro said for SSS, there is about P60 billion in financial assistance and benefits for its members, pensioners, and employers for loan programs and early implementation of the 2026 pension increase.

These are in addition to loan penalty condonation and contribution delinquency relief, Castro added.

The GSIS, for its part, is implementing the Balik Ginhawa Program, which involves a three-month loan moratorium.