Benise Balaoing

The Pasig skyline as seen from the Metro Manila Development Authority (MMDA) Command Center  in Pasig City on July 7, 2025.  Jonathan Cellona, ABS-CBN News

Article (news)

PH economy worse due to poor planning and weak policies—think tank

Jekki Pascual

ABS-CBN News

<p>MANILA — Philippine think tank IBON Foundation lamented what it calls the worsening state of the Philippine economy ahead of the State of the Nation Address of President Ferdinand Marcos, Jr. The group attributed this to decades of poor planning and weak policies.</p><p>IBON Foundation Executive Director Sonny Africa said the Philippines needs a new development plan--one that focuses on building Philippine industries rather than just attracting foreign investors, and one that also increases high-quality job opportunities and decreases poverty.</p><p>“The Philippines is a poor and low-income country. Our economy now is worst than it was five years ago, ten years ago, forty years ago,” Africa said.</p><p>He said the recent economic slowdown is not just because of the flood control controversy, which lowered government spending, and the war in the Middle East, which drove up inflation. Africa said the country has had systemic problems, like the weakness in the manufacturing and agriculture industries.</p><p>He said the country needs to have an independent policy- not siding with the US or even with China. The Philippines, he added, must strengthen domestic industries and not just focus on attracting foreign investors. </p><p>He added that because the country has been attracting foreign companies like Intel and Hanjin, for example, when these companies left, there was no major Filipino electronics or shipbuilding industry.</p><p>“If we have the exact same kind of foreign investment setup or regime that Intel had and that Hanjin and the Malampaya contract had, they will be here, they will profit from our location, our labor, our natural resources, but there is nothing developed in terms of Filipino industrial capacity. That’s an important cautionary tale,” he said.</p><p>Africa said the Philippines focused too much on building free trade agreements and on new laws to attract foreign investors, when the local businesses need more help.</p><p>He said the recent reclassification of the Philippines into an upper-middle-income country also does not reflect the true state of the Filipinos.</p><div><a href="https://www.abs-cbn.com/news/business/2026/7/1/philippines-now-an-upper-middle-income-country-2222" rel="noopener noreferrer" target="_blank">Philippines now an &#x27;upper-middle income&#x27; country</a></div><p>He now hopes the government will support Filipino industries more than they do foreign investors- who, he said, usually get financial incentives.</p><p>What the government does is “lower taxes for foreign investors, lower regulations for foreign investors, limit regulatory controls on foreign investors, ease [of] doing business for foreign investors. Ang tanong why aren’t you doing the same for Filipino manufacturers?,” Africa said.</p><p>He expects the Philippine economy to still grow this year but less than the government forecast of 3.5 to 4.5 percent. He also hopes wages will increase further because the recent approval of an P85 daily wage hike is not enough.</p><div><a href="https://www.abs-cbn.com/news/business/2026/7/9/adb-world-bank-cut-growth-outlooks-for-the-philippines-1340" rel="noopener noreferrer" target="_blank">ADB, IMF cut growth outlooks for the Philippines</a></div><div><a href="https://www.abs-cbn.com/news/business/2026/6/2/amro-cuts-ph-growth-forecast-to-4-1-pct-1550" rel="noopener noreferrer" target="_blank">AMRO cuts PH growth forecast to 4.1 pct</a></div><p>The Philippine government has said that the country will bounce back in the second half of the year and in the years to come. Government officials have also said reforms have been put in place, and that more programs are now focused on helping the vulnerable sector.</p>

<p>IBON Foundation lamented what it calls the worsening state of the Philippine economy ahead of #SONA2026.</p>

IBON Foundation lamented what it calls the worsening state of the Philippine economy ahead of #SONA2026.