THE Philippines is awash in liquidity from remittances, business process outsourcing (BPO) revenues, and tourism earnings, but weak public investment and slow capital deployment are preventing the economy from reaching its full growth potential, an economist said.
Speaking at a business forum, economist Ronilo Balbieran said the country is among the world’s top recipients of net additional income from abroad, equivalent to about 11 percent to as high as 16 percent of gross domestic product (GDP) in recent quarters. This includes overseas Filipino remittances and income from services exports, which continue to support household consumption even amid global economic uncertainty.
“We are swimming in cash,” he said. “The problem is not the lack of money. The problem is what we are doing — or not doing — with it.”
Balbieran noted that household spending accounts for about 76 percent of the country’s GDP, providing a strong buffer against external shocks. Government spending, by contrast, makes up only about 14.5 percent, limiting the state’s ability to stimulate growth when private activity slows.
Despite this, the Philippines has maintained healthy external buffers, with gross international reserves well above the global benchmark of three months’ import cover. The country’s strong reserve position, low inflation, and relatively low unemployment have also helped stabilize credit ratings and investor confidence, he said.
However, Balbieran warned that excess liquidity has not translated into sufficient investments in infrastructure and productivity-enhancing sectors. Delays in public construction and low disbursement rates have constrained capacity expansion, contributing to slower growth in the second half of 2025.
“Consumption can only take you so far,” he said. “Without sustained investment in roads, ports, logistics, and digital infrastructure, growth will eventually hit a ceiling.”
He added that while remittances and services income continue to prop up demand, relying too heavily on these inflows risks masking deeper structural weaknesses in capital formation.
Global institutions such as the World Bank and the International Monetary Fund have repeatedly stressed the need for emerging economies to channel liquidity toward long-term investments, particularly as global growth becomes more uneven.
“The Philippines has the money,” Balbieran said. “What’s missing is the urgency to invest it productively.” (KOC)