2026: Investor confidence matters

2025 was a year of disasters. Both natural (flood and tremors) and man-made (corruption). Undeniably though, fortuitous events happen. While typhoons can be predicted, these are inevitable. Supposedly, preparedness (up-to-par infrastructures) can mitigate the damages these might inflict.

To the government planners’ credit, there were flood mitigating projects. Sadly though, some are nowhere to be found (ghost projects) and those found are substandard. Thus, the unfathomable loss of lives and properties. And if we won’t learn anything from these disasters, we are doomed.

Yet, despite these tragedies, the Asian Development Bank (ADB) predicted that the country’s gross domestic product (GDP) growth in 2025 is 5% (the final rate is not yet available). Still, not that bad as we are still expected to be the second-fastest economy in Southeast Asia, just behind Vietnam. For this year, 2026, the ADB trimmed the country’s growth forecast to 5.3% from 5.7% previously. ADB’s forecast though is slightly lower than the government’s 5.5%-6.5% target for this year, and the 6%-7% for 2026 to 2028.

The disparity in these projections is obvious. It lies in their assumptions. ADB’s projections for 2025 were based on figures gathered from the economic-oriented departments like the Department of Budget and Management (DBM) and the Department of Public Works and Highways (DPWH) from January to September (4th quarter figures are not yet available).

In its report last month, the ADB said the lower growth prospects for the Philippines were “due to weak infrastructure spending amid investigations of publicly funded projects and natural hazards.” These are partly based on the figures coming from DBM which showed that “expenditure on infrastructure and other capital outlays for the January-to-September period declined by 10.7% to P877.1 billion from P982.4 billion a year ago.”

It also reported that “Sluggish infrastructure spending, affected by adverse weather and stricter fund releases to the DPWH, dragged Philippine GDP growth to a weakerthanexpected 4% in the third quarter. Thus, “this brought the ninemonth average growth to 5%,” it added.

The positive development is inflation remains low and the Bangko Sentral ng Pilipinas (BSP) reduction of borrowing costs has sustained domestic demand.  Same scenario is expected to continue in 2026. If sustained, we could expect a stronger growth this year.

There is a caveat though. There are two uncertainties that pose risks, results of the investigations of publicly funded infrastructure projects and the natural calamities (which effects remain unmitigated). Without expected results, the anxieties and uncertainties will linger on.  The worst is, as the obvious culprits remain unaccountable, investor confidence erodes.  Once that obtains, there will be no new investments. Therefore, no new economic activities.  Consequently, there will be no jobs. Thus, consumer spending plummets. Precariously, taxes generated will likewise be in the same trajectory.

Notably, the Independent Commission on Infrastructure (ICI) should have been of help.  However, the resignations of some commissioners dampened our expectations. In fact, it only padded uncertainty. The truth is, it eroded investor confidence further. There is bill though filed in congress that is supposed to institutional this commission, the Independent People’s Commission Act bill. So good, yet, not worth rejoicing. Unfortunately, it has to go through both houses of congress ruled by political dynasties. Therefore, though President Marcos asked lawmakers to speed it up, we aren’t that optimistic.

Remarkably, the root cause lies in the clout of political dynasties. Obviously with a congress and, worst, local government units ran like traditional family-owned corporations by our politicians, the internal control aspect of governance is set aside. Worse, while there are term limits on elected officials, positions are handed over to their kins despite the successors’ obvious handicaps.

Truth to tell, to these political clans, they’ve made their elective positions their businesses or livelihoods to bank on. Thus, just like any businesses, they pass it on to their future generations. Unlike privately owned businesses, however, their hold to such devious inheritances is perpetuated at our expense. How? The answer is so simple.

As politicians (from dynasties) and their cohorts (cronies and relatives) deceitfully siphon money from the government’s treasury through illegitimate deals, the economy starves.

Therefore, even in the absence of the enabling laws, let us not give these TRAPOs and their descendants the opportunity to eternally stay and be in a position to steal conveniently and conceal perpetually.