THE government can still support stronger economic growth this year, but it needs to speed up spending, restore public confidence and improve the investment environment, according to the Makati Business Club (MBC).
MBC Chairman Edgar O. Chua said in a forum last Thursday that it was too early to write off 2026, with four months left in the year. However, he acknowledged that some of the constraints facing the economy would take time to address.
‘Government is one of the main engines driving the economy,’ Chua told reporters in a roundtable interview after the business group hosted a forum for the media in Makati City.
‘We still have four months, so hopefully, there’s a chance,’ he added.
Citing the proposed Luzon Economic Corridor and the United States-led Pax Silica initiative, the MBC sees these as potential sources of investment.
Chua, however, recognized that these plans would take time to translate into actual projects. He noted that putting the necessary infrastructure and policy groundwork in place could help attract investments by the end of the year or early next year.
‘If they see that we are really preparing our country, then it would help drive confidence and investment,’ according to the MBC chairman.
But increased government spending alone would not be enough, Chua said.
Spending must be credible and productive, particularly as allegations involving ‘ghost’ projects have eroded public trust.
‘What we need to do is to bring back the confidence of the public in the government,’ he told reporters.
The loss of confidence also affects foreign investors, particularly companies that have yet to establish operations in the Philippines.
‘Foreign investors, if they’re sitting outside the country, what will they read?’ Chua said, noting that companies already operating in the Philippines have a better understanding of how the country works. ‘But those outside, they won’t even come. So we need to lay the groundwork.’
Measures such as a freedom of information law and reforms to bank secrecy rules should be considered as part of efforts to improve transparency and rebuild trust, he added.
Chua also said the government should resolve ongoing political issues in a way that restores confidence in public institutions.
Growth prospects
THE MBC hopes the government’s growth projections would prove accurate, noting that official forecasts tend to be more optimistic.
‘Generally speaking, government is more upbeat about their forecast. It’s normal,’ Chua said, noting that governments need to maintain a positive outlook to avoid discouraging businesses and the public.
The Development Budget Coordination Committee (DBCC) cut its 2026 gross domestic product (GDP) growth target to 3.5 percent to 4.5 percent, from 5 percent to 6 percent projected annually from 2027 to 2030.
On inflation, the DBCC sees the rate averaging 6 percent to 7 percent this year, before slowing to 4 percent to 5 percent in 2027 and settling within the government’s 2 percent to 4 percent target from 2028 through 2030.
‘The country needs a sustained growth of minimum 7 percent to bring the country out of, especially our poor countrymen, out of poverty,’ Chua said.
On the other hand, the MBC chairman questioned how some public-private partnership (PPP) projects are evaluated, arguing that the government should place greater weight on the cost and quality of public services rather than the revenue share offered by private concessionaires.
Under some bidding arrangements, he noted, a higher revenue share for government could ultimately translate into higher fees for users.
For MBC, the better basis for selecting a private partner would be its ability to deliver the project at the lowest cost while providing the best possible service to the public.
‘The consideration of government would be not who will give the highest share. It would be who can provide that project at the lowest cost, at the best possible service to the public,’ he said.