Hope needs receipts
Businesses do not manufacture consumer confidence. Only income growth, price stability, and a functioning peso do that, and none of the three made a mark on schedule this year.
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Businesses do not manufacture consumer confidence. Only income growth, price stability, and a functioning peso do that, and none of the three made a mark on schedule this year.
The head of one of the country’s most influential business organizations is practically giving up hope for an economic rebound this year.
Coming out of the Management Association of the Philippines general membership meeting on Thursday, MAP president Donald Lim said that as far as 2026 is concerned “that chapter is closed.”
Lim was not being pessimistic when he deemed the year already “closed.” He was simply reading the same numbers everyone else was reading and drawing the obvious conclusion: second-quarter growth slowing to 2.3 percent, down from 2.8 percent in the first quarter and a world away from the 5.4 percent posted a year earlier; first-half output averaging just 2.6 percent, the weakest performance among ASEAN’s major economies.
The uncomfortable thing is this slowdown is substantially self-inflicted. The Marcos administration’s own economic managers have acknowledged as much. Public spending has lagged because the government, chastened by the flood control scandal that exposed the diversion of billions in infrastructure funds through congressional insertions and a captured contractor network, has chosen caution over speed.
Projects were re-bid, disbursements were delayed, agencies were told to slow down and get things right. This as the governance response is perhaps defensible, but it is also the reason — by the administration’s admission — why growth cratered.
President Marcos has promised to close the seven-percent year-on-year spending gap by the fourth quarter. Whether that catch-up materializes, or simply front-loads next year’s obligations into a scramble, will say more about the government’s capacity for execution than any of his statements on the matter will.
So can the economy still be primed before December closes the book on 2026? Marginally, yes.
The accelerated disbursement of the 2026 P6.79-trillion budget, faster movement on the Strategic Investment Priority Plan, and a genuine push for the completion of DPWH projects could stave off some of the damage.
But Lim’s skepticism about a holiday consumption lift is well-founded. Inflation spiked earlier in the year after the Iran-linked oil shock forced Marcos to declare a national energy emergency, and even with prices easing since, real household purchasing power has not recovered enough to fund a splurge.
Businesses do not manufacture consumer confidence. Only income growth, price stability, and a functioning peso do that, and none of the three made a mark on schedule this year.
The more interesting question is whether the government has the credibility, not just the fiscal room, to make 2027 believable.
Multilateral forecasters are more bullish than the mood on the ground suggests: the OECD projects growth accelerating to 5.8 percent next year, and even the government’s own Development Budget Coordination Committee sees a rebound to the 5-to-6 percent range once the realigned, scandal-cleaned 2026 budget flows through the system properly.
That is not nothing. A budget process that produced what former Senate President Tito Sotto called the “cleanest ever” appropriations law is a genuine, if belated, institutional gain. But credibility is not restored by a single clean budget cycle after a P118-billion theft was exposed on live television during a SoNA.
It is restored by prosecutions that stick, by procurement reforms that outlive the news cycle, and by lawmakers facing consequences rather than committee hearings that fade by Christmas.
This is where Lim’s insistence on pairing economic recovery with political reform makes its weight. An Anti-Political Dynasty Law, a Cadena Bill closing procurement loopholes, and a reformed party-list system are not distractions from growth policy. They are the growth policy, aimed at the exact mechanism that broke 2026: politically protected actors treating public infrastructure as a private revenue stream.
A government that spends faster without fixing who controls the spending will simply recreate the conditions for the next scandal.
Can the Marcos administration do better in 2027? The fundamentals suggest it can. The forecasts allow for it. But the question business groups like the MAP are really asking is whether the state will choose reform over resumption, and whether hope, this time, will come with receipts.
