There is no economic expansion when the government stalls or postpones projects.
After disappointing growth numbers in the third quarter, the government is changing gear to quicken the pace and make up for lost time.
Will the recalibration be enough, given that there are barely five weeks left in the calendar?
The government’s two key economic officials―newly-appointed Finance Secretary Frederick Go and Department of Budget and Management (DBM) officer-in-charge Rolando Toledo―are at the helm of two departments that can right the ship.
Mr. Go is well-versed in his new job, having served as Special Assistant to the President for Investment and Economic Affairs. Mr. Toledo was undersecretary of the DBM’s Budget Preparation and Execution (BPE) Group prior to his new role.
The two will oversee a comprehensive catch-up plan that aims to accelerate economic growth by aligning budget disbursements with national priorities, as immediate past Finance Secretary Ralph Recto unveiled to the press before he was transferred to his new post..
Recto, the new executive secretary of President Ferdinand Marcos Jr., will certainly coordinate with Mr. Go. and Mr. Toledo in implementing the catch-up plan that will extend over to the first and second quarters of 2026 by front-loading the next budget.
First in the agenda is the passage of the 2026 national budget in Congress that reflects the government’s priorities and reform agenda.
Mr. Recto as finance chief had called for prioritizing spending with the highest multiplier effects, enforcing fiscal discipline and imposing targeted austerity measures on travel, maintenance and other operating expenses (MOOE) and non-essential government expenses.
The economy grew at a slower pace in the third quarter of the year, weighed down by low spending on public works.
Congressional hearings on flood control anomalies and admissions of corruption and payoffs that involved some lawmakers also put a dent on market sentiments and sparked calls for resignation of public officials.
As I’ve written in my past column here, the economy bore the brunt of the flood control scandals. Per the account of Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan, the economy grew slower in the third quarter of 2025 as a result of the flood control anomalies and projects that were delayed, questioned, or paused due to procurement and governance issues.
The controversy led to underspending in certain pockets, slower project execution and a drag on construction and related services.
The Philippine economy grew 4.0 percent year-on-year in the third quarter of 2025, the slowest in nearly five years amid the disruption in public works projects caused by the flood-control controversy.
For Mr. Go, restoring the momentum of public spending is the solution to the laggard growth of the economy. He suggested separating and implementing the good projects from the questionable to speed up economic expansion.
Public investments will continue to pump-prime the economy. President Marcos has just ordered the release of P1.307 trillion in programmed funds for the fourth quarter of 2025 and directed agencies to fully utilize the budget through targeted, efficient spending to support growth.
Go earlier said that releasing budgeted funds on schedule―with a mandate for targeted, efficient use―is a signal the state will not starve the economy of needed demand.
He proposes a faster way of vetting projects by using standardized integrity checks for flood control and other infrastructure. The government should green-light clean projects quickly and cancel the rest decisively.
Mr. Go also favored the disclosure of weekly disbursements and project milestones. Transparency, in his own words, is the best antidote to “underspending creep.”
High-multiplier items, in addition, must be prioritzed. These include maintenance and rehabilitation, digital public infrastructure, health facilities, school repairs and logistics bottlenecks that crowd in private investments.
Local government units (LGUs), meanwhile, must have a critical role in the implementation of infrastructure projects.
LGUs should be provided with technical assistance for procurement and project management to translate fund into actual outputs on the ground.
In sum, the government must practice smart spending instead of adopting austerity. There is no economic expansion when the government stalls or postpones projects.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com
