THE upcoming nationwide anti-corruption rallies on Sept. 21, 2025 — timed with the anniversary of the declaration of Martial Law — are unlikely to derail the Philippine economy’s growth trajectory, as strong fundamentals continue to anchor expansion, according to University of Asia and the Pacific economist Prof. Ronilo Balbieran.
While public discontent over corruption and governance issues may fill the streets, Balbieran said the broader macroeconomic environment is far from the turmoil that fueled past crises.
“In the 1980s, lending rates were at 100 percent, inflation reached 30 to 50 percent, and we ran out of dollar reserves. Those conditions made it easy to bring people to the streets,” he told business leaders at the 2nd Logistics Summit hosted by the Mandaue Chamber of Commerce and Industry on Sept. 18, 2025. He was referring to the Edsa crisis when the Philippines experienced negative gross domestic product (GDP) growth.
“Today, inflation is low, reserves are strong, and remittances keep adding 15 percent to our GDP every year. People are busy working, so it’s difficult for political issues to spiral into an economic crisis,” he said.
Balbieran noted that the GDP expanded 5.5 percent in the first half of 2025 — slightly faster than last year’s pace — despite under-spending during the midterm election period. He projects stronger outturns in the second half and into 2026, as government disbursements accelerate and borrowing costs ease.
“The economy cannot go lower from here,” he said. “The remaining months of 2025 will be better, and 2026 can grow faster due to three things: lower inflation and interest rates, a higher exchange rate favorable to exporters, and faster government spending on infrastructure.”
For the long term, Balbieran expects the Philippines to sustain at least five percent growth annually over the next five decades. Household consumption, which accounts for 76 percent of the GDP, provides a sturdy base.
“Anything positive the government does will be an addition to that growth,” he said.
Still, he argued the Philippines is “barely scratching one percent” of its potential. Metro Manila, representing only 0.2 percent of the nation’s land, contributes 40 percent of the GDP. Unlocking growth outside the capital, he stressed, is key to inclusive prosperity.
Balbieran urged policymakers to aim higher. “You will start to matter when GDP growth reaches eight to 10 percent,” he said, pointing out that government spending will play a critical role.
“We are hopeful that with the crafting and implementation of the 2026 budget, the government will be able to spend our taxes wisely and productively, allowing growth to exceed five percent,” he said.
Reforms, however, are opening new opportunities. The amended Public Service Act, allowing full foreign ownership in strategic sectors such as airports, could reshape competition.
“This is a game-changer. You will see more investors coming in,” he said.
Yet the country faces paradoxical challenges. Bank deposits have ballooned to P6 trillion, leaving lenders struggling to deploy excess liquidity into productive ventures.
“Our number one problem today is that we are swimming in extra cash and we don’t know what to do with it,” he said.
Balbieran also urged systemic reforms to curb corruption, saying that public demonstrations should go beyond politics and push for deeper structural change.
“We need rallies that make a strong stand against corruption, but more importantly, we must pursue long-term solutions,” Balbieran said.
According to him, the current system of incentives and penalties in government fosters corruption.
“Public sector pay should be restructured to be more competitive with the private sector, while penalties for stealing taxpayer money must be stronger and more meaningful,” he added.
Globally, the International Monetary Fund projects world output to expand just three percent in 2025, with emerging Asia at 4.7 percent. The Philippines, at five percent, will again outpace the U.S. and Europe and remain the region’s second-fastest-growing economy.
“Any company in the Philippines growing slower than five percent is actually underperforming the economy,” Balbieran told business leaders. “The fundamentals are solid. What matters now is how we channel our resources into real productivity, innovation and jobs.” / KOC