The Philippine economy faces a challenging year, with growth likely to remain in the 4-5% range, according to former Finance Secretary Margarito B. Teves. Lingering repercussions from a recent public works corruption scandal continue to cast a shadow over economic prospects, hindering a more robust recovery.
Teves, who served during the Arroyo administration, expressed skepticism about exceeding 5% growth without significant systemic changes. He believes a fundamental shift towards accountability is crucial, stating that tangible improvements must be felt directly by the population to restore confidence.
This lack of confidence stems from a 2025 economic expansion of just 4.4%, the slowest pace in five years. Excluding the pandemic years, this represents the weakest growth since 2011, signaling a concerning trend that demands immediate attention.
To revitalize the economy, Teves emphasized the need for comprehensive reforms to the budgeting process and a continued focus on streamlining the ease of doing business. These measures, he argues, are essential to surpass the current consensus forecast of around 5% growth.
However, not all budgetary practices are inherently detrimental. Teves suggested that unprogrammed appropriations – funds without pre-defined allocations – can be beneficial if carefully managed and limited to a small percentage of the overall budget, ideally between 2-3%.
This perspective aligns with calls from former Budget Secretary Amenah F. Pangandaman, who advocated for capping unprogrammed appropriations at 5% of the national budget. Current levels, at 2.21% of the national budget (P150.9 billion in 2026), appear relatively contained.
President Marcos Jr. recently demonstrated a commitment to fiscal discipline by vetoing P92.5 billion in unprogrammed appropriations when signing the budget into law. This action directly addresses concerns about the misuse of these funds for localized projects.
The core issue, Teves explained, lies in the historical tendency of legislators to utilize unprogrammed appropriations to finance “pet projects.” He stressed the importance of reserving funding for essential items like foreign-assisted projects and counterpart funds within the programmed budget, ensuring transparency and accountability.
