The Philippine economy is expected to see a short-term boost from election-related spending in 2026, but experts warn that long-term growth remains vulnerable to institutional weaknesses and inconsistent policy execution.
A study titled “Election-Year Stimuli and Economic Performance” presented by the Philippine Institute for Development Studies (PIDS) on Jan. 15 shows that heightened government spending and campaign activities traditionally lift the economy.
PIDS senior research fellow John Paolo Rivera said agencies often accelerate infrastructure and social program disbursements to beat the statutory pre-election spending ban.
“Election years stimulate growth, but the effects are temporary,” he said.
The research indicates that political campaigns inject liquidity through logistics, advertising and temporary jobs. The “election employment” is estimated to trigger a 2.7-percent jump in jobs across the services, transport and construction sectors during early election quarters.
Private consumption is projected to surge by 8 percent to 18 percent during these periods, while government consumption could rise by 7 percent to 14 percent on front-loaded spending.
Rivera, however, cautioned that these effects are cyclical and the economy typically slows down once the election ends.
De La Salle University Prof. Marites Tiongco said the findings highlight how election cycles compress spending into narrow windows, which can lead to post-election tightening.
She said such patterns impact macro volatility and public investment planning, adding that institutional weaknesses often limit the developmental impact of these funds.
The PIDS model suggests that while investment may see gains of 4 percent to 11 percent, uncertainty regarding political transitions often tempers long-term commitments.
The shift in priority toward visible, short-term projects can disrupt the continuity of large-scale infrastructure and Public-Private Partnership initiatives.
The Philippines enters 2026 with eased inflation and stable financial conditions, yet the recovery of investment remains slow. Rivera described the current economic state as one of fragility rather than weakness, projecting growth to edge up from 5.0 percent in 2025 to 5.3 percent in 2026.
Philippine National Bank chief economist Alvin Joseph Arogo said the slow pace of investment recovery is the biggest risk to the outlook.
He said investor confidence relies on the consistency of policy execution once the temporary demand boost from the election season fades.
The report said sustaining momentum beyond 2026 would require stronger institutions capable of converting public spending into concrete outcomes.
Rivera said growth fails not due to a lack of capital but when institutions fail to deliver on program execution.
