Without reforms, Cabinet revamp may deepen uncertainty – economists

MANILA, Philippines — Economists warned that restoring confidence in government will be difficult, as the recent Cabinet shakeup could deepen uncertainty unless it comes with meaningful reforms and clear accountability.

Oikonomia Advisory & Research Inc. Reinielle Matt Erece said that a management change without accompanying reforms could signal political instability, a development that could hurt the economy.

“Although management changes often aim to be a reset of their reputation, the confusing reasons and messaging behind the change offset the objective,” Erece said.

He added: “Management changes without reform may be seen as political instability, which is bad for the economy. Meaningful actions such as audits and transparency reports may be more helpful in restoring confidence.”

On Monday, Malacañang announced the resignation of executive secretary Lucas Bersamin and Department of Budget and Management secretary Amenah Pangandaman.

While Pangandaman formally declared that she had submitted her irrevocable resignation, Bersamin, in contrast, insisted that he did not resign. The former executive secretary said he just bowed to the President’s prerogative to replace him.

For Rizal Commercial Banking Corp. chief economist Michael Ricafort, there could be a positive impact on the local economy if higher government standards are implemented.

“If anti-corruption measures or reforms and higher governance standards are taken seriously, just like 10 to 15 years ago, then these should be good for the local economy and financial markets,” he said.

Meanwhile, senior research fellow at the Philippine Institute for Development Studies John Paolo Rivera said that the immediate challenge is restoring credibility and ensuring that government spending resumes efficiently and transparently.

“But the opportunity lies in using the reshuffle to reset governance standards, improve transparency and refine spending priorities to support growth sectors like agriculture, digital and infrastructure,” he said.

Rivera added that any change in leadership should focus on rebuilding trust and accelerating delayed public projects, rather than disrupting ongoing fiscal plans. He noted that the changes in the economic team are closely monitored for their impact amid corruption concerns.

“A key risk is policy uncertainty or bureaucratic slowdown during transition, which could delay spending further at a time when the economy needs stimulus,” he said.

He added that the reshuffle presents an opportunity to reset governance standards, enhance transparency and refine spending priorities to bolster key growth sectors, such as agriculture, digital technology and infrastructure.

“If handled well, it can turn a credibility problem into a chance to restore confidence and strengthen fiscal management,” Rivera said.