The Department of Finance (DOF) expects the Philippine economy to recover strongly in 2026 after a temporary slowdown in the third quarter of 2025, when GDP grew 4.0% amid reduced government spending linked to an investigation into flood-control project anomalies.
“Although there has been a slowdown in government spending as we continue to address the flood-control corruption controversy,” Finance Secretary Ralph Recto said.
“This reflects the administration’s strong resolve for good governance and to spend only on legitimate, high-impact programs and projects.”
Recto said the spending adjustment is a “necessary” step to ensure transparency and efficiency.
“This short-term adjustment will pave the way for more efficient, transparent, and accountable public spending moving forward,” he added.
For 2026, the ₱6.793-trillion proposed budget focuses on education, healthcare, agriculture, digitalization, and infrastructure—key pillars for sustainable growth. Reforms at the DPWH aim to boost transparency and coordination, while major projects like the Siargao Airport expansion and the new Caticlan-Boracay Airport are underway.
Recto highlighted continued investor confidence, citing Samsung Electro-Mechanics’ ₱50.7-billion commitment and talks with Hanwha Ocean and DL Group for technology and energy ventures.
“The government’s game-changing structural reforms and strategic investments will sustain the country’s economic momentum,” he said.
The Philippines has also applied to join the CPTPP, which is expected to expand trade and investment opportunities.
“The Philippines remains on a solid footing, with strong fundamentals and easing inflation,” Recto said.
“Improved governance and sound fiscal policies will drive a robust economic recovery in 2026.”