Iread a post from Filipino-Chinese restaurant owners group asking if their fellow restaurant owners are experiencing the slowing down of sales despite the onset of the ‘ber’ months. Last Sunday, I observed it myself when I went to a popular mall at lunchtime to find a restaurant totally empty as if I have reserved it for myself. What is happening to the Philippine economy?
Based on observable and recently available data, the Philippine economy is not collapsing. But neither is it delivering. The phrase that best captures our condition is ‘just getting by.’ Businesses remain open, overseas workers continue sending money, and families find ways to stretch their budgets. However, surviving another month is not the same as moving forward.
The numbers are reflecting this reality: GDP growth slowed from 2.8 percent in the first quarter to 2.3 percent in the second quarter of 2026 and most likely continued at this level for the rest of the year. Household consumption grew just 2.8 percent, while capital formation fell 9.2 percent. These are challenging signals which are saying that consumers are cautious and investment is retreating.
Meanwhile, inflation reached 7.2 percent in September, with rice prices rising 20.3 percent from a year earlier. For the poorest 30 percent of households, inflation was an even harsher 9 percent. Unemployment stood at 5.3 percent in August, representing 2.77 million people, while nearly 5.9 million workers are underemployed. These are describing the difficult choices that households need to make between day-to-day groceries, transport, medicines and school expenses.
While this is not stagflation, the country faces an uncomfortable combination of weak growth and high inflation. The average estimate shows that full growth for 2026 will only be 3 percent.
How to break this ‘getting by situation’ requires key policy actions some of which are already being done but needs more emphasis, effort, and proper communication sans politics by the government.
First, make food affordability the immediate economic priority. Rice is both an economic staple and a political barometer. Announcing lower prices is easier than ensuring that rice reaches markets at those prices. More actions are needed to make this happen, such as publishing transparent weekly information on stocks, farmgate prices, imports and retail margins.
Second, cushion the energy shock through an institutionalized, systematic, time-bound, properly targeted assistance to public transport operators, farmers and low-income commuters not a reactive response optics. A government assisted accelerated renewable energy connections devoid of red-tape can reshape household energy behaviors.
Third, restart credible public investment. Reviews of questionable infrastructure contracts are necessary, particularly after the flood-control controversy. But indefinitely freezing legitimate projects also destroys jobs and delays critical government infrastructure particularly with the onset of El Nino. It must be clear to government that accountability and economic recovery are not competing goals.
Fourth, protect the remaining fiscal space. The deficit had reached about P1.05 trillion by August, while outstanding national government debt stood near P19.61 trillion. Borrowing is not inherently irresponsible, but it must be for projects that work. The 2027 budget should distinguish high-impact investments from politically attractive but unproductive spending. Cutting waste and improving tax administration should precede new promises of blanket subsidies.
These steps can help ease today’s pressure. But other choices, postponed again and again, could become decisive in the 2028 elections. Medium term policy should focus on the following: job quality-a still expanding labor force cannot depend indefinitely on low-productivity services, informal work and overseas employment. We need a credible investment pipeline in manufacturing, agribusiness, logistics and tradable digital services, supported by dependable power, faster permits and practical skills training. Investment approvals must be judged by factories built and decent jobs created, not announcements.
Second, address learning losses, weak foundational skills and mismatches between training and available jobs compound over years. They cannot be corrected by a campaign slogan in 2028. Measurable improvements in reading, numeracy, technical education and employer-linked apprenticeships must begin now.
Third, repeated floods, droughts and rising temperatures are no longer exceptional disruptions. With El Niño, agriculture, water management and disaster preparation require sustained investment, not emergency spending after each calamity.
Finally, there is trust. Corruption allegations surrounding infrastructure damage more than the government’s reputation. There is erosion of taxpayer willingness, discourage investors and make public spending less effective. Institutionalizing transparent procurement, credible prosecutions and visible project completion are economic reforms, not merely political housekeeping.
Beyond the current political and security stresses, the 2028 election should answer this question: did everyday life become more affordable, secure and hopeful? Voters will look at wages after inflation, job opportunities for their children, electricity bills, commute times and whether taxes produced real services.
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The Philippines still has capable workers, entrepreneurs and considerable economic potential. But potential is not performance. The current administration has less than two years to show that it can move beyond crisis management toward disciplined execution. ‘Just getting by’ may describe the economy today. It must not become the country’s permanent ambition.
ACERD will hold its year-end Economic Briefing entitled Navigating 2027 on December 3, 2026 at the Ateneo Rockwell Campus featuring speakers from government, bank, think tank, multilateral and academe. For more details, please check – https://www.facebook.com/admueaglewatch.