President Ferdinand Marcos Jr. has kept the economy growing three years into his term through tax reforms and infrastructure spending, but concerns over corruption and political instability are clouding his mid-term record, London-based Capital Economics said in a report.
The research firm noted that Marcos pushed reforms such as the CREATE MORE Act, which lowered corporate income taxes and eased foreign investment limits, while sustaining high spending on projects including the Davao City Bypass and the North-South Commuter Railway under his “Build Better More” program.
These measures helped improve logistics performance, boost container throughput, and expand internet usage, Capital Economics said. Growth averaged 5.6% in 2023-24 and is projected at 5.3% this year, while easing inflation has allowed the central bank to cut rates.
“Overall, the progress that Marcos has made over the past three years is encouraging for the economic outlook,” Capital Economics said. “However, persistent concerns over corruption and political instability risk undermining this progress.”
The think tank flagged the abolition of the Presidential Anti-Corruption Commission and questions over transparency at the Maharlika Investment Fund. “These moves have raised fears about backsliding on efforts to fight corruption — the Philippines is ranked among the most corrupt countries in Asia,” it said.
It also cited tensions between Marcos and Vice President Sara Duterte, who resigned from the Cabinet in 2024, was impeached and later accused the president of plotting against her. The Supreme Court dismissed the impeachment, but analysts expect another attempt next year.
Capital Economics said the Philippines is rated among the least politically stable countries in Southeast Asia, behind Vietnam, Malaysia and Thailand. “If these issues remain unresolved, the Philippines will find it difficult to keep pace with the region’s top-performing economies, particularly Vietnam and India,” it said.
