Marcos to accelerate reforms as growth falters

The administration of Philippine President Ferdinand R. Marcos, Jr. is accelerating structural reforms and diversifying trade ties to shield the economy from global volatility following sluggish economic growth last year.

During the Association of Southeast Asian Nations (ASEAN) Editors and Economic Opinion Leaders Forum in Makati City on Tuesday, Mr. Marcos said the government is pushing the bureaucracy to make it more responsive to policy shifts as external shocks, from geopolitics to supply chain disruptions, become more frequent.

Mr. Marcos cited trade negotiations with nontraditional partners such as Latin American nations, members of the European Union (EU) and Canada, among others.

The President framed the next phase of his administration around strengthening economic resilience after the pandemic and amid what he described as increasingly complex geopolitical tensions.

While the government had expected a more stable global environment after the pandemic, he said successive economic and political shocks have required a recalibration.

“One of the main things that we are striving for is to provide stability,” he said. “Whatever shocks come, we are more robust, we are resilient and we are able to adjust.”

That balancing act, preserving policy continuity while remaining agile, will define Manila’s economic strategy in the coming years, he added.

Halfway through his six-year term, Mr. Marcos said that embedding reforms deep enough to outlast political cycles will be key to turning short-term growth into a long-lasting one.

The Philippines’ gross domestic product (GDP) growth slowed to a post-pandemic low of 4.4% in 2025, after a graft scandal affected government spending, consumption and investor and consumer confidence.

The Marcos administration is now targeting GDP growth of 5-6% in 2026, 5.5-6.5% in 2027 and 6-7% in 2028. These new targets are slightly lower than the earlier 6-7% growth goal for 2026 to 2028.

“Flood control problems, scandal, whatever you want to call it, have certainly played a very large part in that,” Mr. Marcos said, referring to his exposé about anomalous flood control projects last July in his annual address to Congress.

“Unfortunately, it had to be done. It is one of those things where you just have to rip the band-aid off. There was no easy way to do it. And otherwise, then the old practices would continue and the Philippines would flatline.”

The President also blamed the Ukraine-Russia war and disruptions in global commodity markets, which have also affected the Philippines through higher food and energy prices.

“It is uncertainty that we are fighting with,” he noted.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the Philippines is “moderately sensitive” to global volatility but generally less trade-dependent than export-heavy peers such as Vietnam and Thailand.

“The main transmission channels of global volatility are oil prices (import dependence), exchange rate pass-through to inflation, and financial conditions (portfolio flows, risk-off episodes),” Mr. Rivera said via Viber.

Compared with regional peers that are more deeply integrated into global manufacturing supply chains, the Philippines faces smaller exposure to abrupt trade disruptions, he noted.

Mr. Rivera said the country’s defenses include international reserves, a flexible exchange rate, a predominantly domestic-currency public debt profile and resilient forex (foreign exchange) inflows from remittances and services.

Mr. Rivera said energy and logistics costs, limited export diversification and uneven infrastructure execution may hamper competitiveness and the economy’s recovery.

He said productivity gains and investment in infrastructure will be critical to sustaining long-term growth.

University of Asia and the Pacific Associate Professor George N. Manzano said the Philippines is an open economy but is less exposed to global trade shocks than more export-dependent ASEAN peers.

He noted the country’s trade as a share of GDP is smaller than in Singapore, Vietnam and Thailand, meaning external disruptions transmit with somewhat less intensity. — Chloe Mari A. Hufana, Reporter