The Philippines is well-positioned for a stronger rebound in 2026 …
The Philippines so far is weathering the political noise triggered by the flood control projects scandal and the noticeable stabilization efforts being waged by the opposition in mainstream and social media.
The economy grew at a slower pace in 2025 after construction slowed down but kept its growth trajectory. Inflation was tame and the economy did not stall at all. One economic indicator stood out―foreign investors are regaining their confidence on the Philippine economy.
Latest available data from the Bangko Sentral ng Pilipinas (BSP) showed that foreign direct investment (FDI) inflows in November 2025 surged to a four-month high―a strong signal that reforms under President Ferdinand Marcos Jr. are gaining traction.
FDI inflows, per the BSP report, jumped 39.7 percent to $897 million in November, up from $642 million in October, despite global market volatility and lingering external headwinds.
While year-on-year figures reflected a decline, economists stressed that the month-on-month surge points to renewed investor optimism as the country strengthens economic fundamentals.
Economist Jonathan Ravelas described the uptick as a sign that investors respond decisively to clearer policy direction and improved stability. The November rebound, he noted, reflected confidence in the Philippines’ reform trajectory amid global uncertainty.
Business leaders echoed the optimism. At the recent “Big Bold Reforms: The Philippines 2026” forum, the British Chamber of Commerce Philippines (BCCP) cited the Marcos administration’s aggressive push for digitalization and structural reforms as key drivers of investor confidence.
BCCP Executive vice chairman Chris Nelson pointed to major government initiatives―including the digital transformation of the Bureau of Internal Revenue and the Bureau of Customs―particularly the implementation of a digitized audit system and a national single-window platform for trade facilitation.
These reforms, he said, significantly enhance the ease of doing business and reduce bureaucratic friction.
Nelson added that priority legislative measures such as the proposed Cybersecurity Act, Digital Payments Act and Blue Economy Act would further institutionalize reforms and position the Philippines as a competitive and investment-ready destination in Asia.
Economic managers are optimistic that as reforms deepen and infrastructure, digitalization and fiscal systems continue to modernize, the Philippines is well-positioned for a stronger rebound in 2026―reinforcing the administration’s vision of a resilient, future-ready economy.
The economy bore the brunt of the flood control scandals after the gross domestic product (GDP) grew at a slower 4 percent in the third quarter of 2025. Infrastructure projects were delayed in the third quarter in the aftermath of the controversy, with procurement and governance issues hounding them.
The controversy led to government underspending, slower project execution and a drag on construction and related services.
The government, in response, devised a catchup plan in the early part of 2026 that would accelerate public spending, especially on infrastructure.
Credit rating agencies, meanwhile, remain confident on the Philippine economy.
Debt watcher S&P Global Ratings has affirmed its investment-grade rating on the Philippines. S&P, in its latest report released at end-November, kept its ‘BBB+/A-2’ rating on the Philippines, believing that the growth slowdown seems temporary.
“The government is continuing its fiscal consolidation, with its debt burden stabilizing. The country’s external position remains a rating strength,” said S&P, in reference to the country’s strong macroeconomic fundamentals.
“S&P’s rating decision confirms our view of the favorable long-term economic growth prospects,” said BSP Governor Eli Remolona, after a recent meeting with President Marcos to review the country’s economic outlook.
Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan, in an earlier report, said the economy remains on a growth trajectory. The third-quarter growth of 4 percent, according to him, “reminds us of the urgent need to address key challenges and strengthen our foundations for rapid, sustained and inclusive growth.”
The administration’s promise to jail key scandal figures by year-end, in addition, will help sustain investor confidence. The next FDI report, hopefully, will validate this assurance.
E-mail: rayenano@yahoo.com or extrastory2000@gmail.com
