It is perhaps a good thing that we Filipinos are religious and that we believe in the power of collective prayer to save us from danger, because somehow — at least in my lifetime — there have been several instances when the country was on the verge of economic collapse because of political turmoil.
Our first debt crisis was caused by Ferdinand Marcos Sr. as a result of his economic mismanagement that led to massive foreign borrowings.
The imposition of Martial Law to quell rising opposition to his regime and the subsequent loss of international confidence in his administration led to a debt crisis in 1983, with the country nearly bankrupted.
A prayer revolt, and the former dictator was overthrown. There was renewed confidence in the new government led by the widow of a martyred opposition leader.
However, the Cory Aquino administration was subsequently rocked by a series of coup attempts from idealistic young military leaders which again put our economy in turmoil.
Another round of Hail Marys and the coup was crushed. The widowed president was able to effect a peaceful and democratic transition to an EDSA hero, Fidel Ramos, who was able to usher in a couple of good years of economic recovery and growth.
But the road to democracy and economic growth was once again assailed by corruption and an overthrow of the movie star-turned-president Joseph “Erap” Estrada, only to be succeeded by the daughter of a former president, who eventually seemingly turned out to have the same corruption stain.
Fortunately, prayers from a mother brought another Aquino, this time the only son, Benigno “Noynoy” back to Malacañang, and the Philippines was again back on the road to economic recovery.
Unfortunately, the Aquino luster lost its shine because of perceptions that his own relatives were also benefiting from his presidency.
Furthermore, he failed to keep a pulse on the people, was branded insensitive to the flight of Mindanao, the police — particularly after the infamous Mamasapano massacre.
Noynoy’s anointed successor Mar Roxas was not popular, and the unexpected charm of Rodrigo Duterte resulted in a new political leadership that surprisingly was welcomed even by the local business sector at the start of his term.
But it turned out to be an aberration that saw us pivoting to China and resulted in a short-lived economic rally, and renewed corruption even during the global crisis wrought by the global COVID pandemic. It also led to another unexpected political alliance with the younger Marcos, and thus here we are now.
This time, however, the rules of the game are further complicated by a geopolitical crisis that is dwarfing our own raging political battle between the Marcos and Duterte scions for future leadership of our nation.
Our Hail Marys are now part of a global prayer chain as conflicts rock the Middle East, Eastern Europe and a new global world order that has been radically reshaped by our ally the US, and is complicated by what could be considered a new global player — the rise of artificial intelligence.
Our economic outlook is harder to read and during a recent briefing for the Monday Circle group, First Metro Securities Brokerage Corp. head of institutional research Estella Villamiel noted that GDP growth averaged 2.6 percent (YTD 2026), representing one of the weaker growth periods outside the pandemic era, even as the government’s full-year target still aims for a stronger growth performance in the second half of the year.
Household consumption, she said, remains the principal driver of economic activity, although contribution trends have moderated compared with prior years. Capital formation, she adds, has emerged as the primary drag on growth, reflecting softer private-sector investment activity and weaker business spending.
Government spending, she acknowledged, continues to provide support, while exports have remained relatively resilient. The fiscal deficit, she pointed out, reached 5.8 percent of GDP in the first half of the year, reflecting continued efforts to support economic activity.
Government debt stood at approximately 66 percent of GDP. Public spending, she stressed, remains an important support for growth, particularly through infrastructure and social service expenditures.
Over the medium term, revenue-enhancing measures and fiscal discipline may help preserve fiscal flexibility while maintaining growth-supportive spending.
But, as we have read from multilateral financial institutions, more government investment for infrastructure is key to economic recovery.
Unfortunately, the geopolitical realignment is making it hard to get international funding at a time when the US has basically tightened its once generous purse string and other nations are likewise hard pressed to fill in the financing vacuum.
Villamiel also noted that consumer sentiment, retail activity and vehicle sales data suggest household demand conditions have softened in recent quarters.
Headline inflation, she cited, accelerated to 7.2 percent in September 2026, with YTD inflation running above the BSP’s target range. Transport, food and utilities were significant contributors to inflation during the year.
“More of cancer,” she warns, “is higher global oil prices appear to have played an important role in recent inflation dynamics, particularly through transport related costs. Inflation trends remain an important consideration for monetary policy and household purchasing power.”
Employment conditions, she said, remain broadly consistent with near-full employment, with employment rates remaining above 94 percent. Wage growth has generally kept pace with, and at times exceeded, inflation. Recent increases in unemployment and underemployment suggest some moderation in labor market momentum, but she highlights that “job creation trends indicate employment growth has become less broad-based compared with prior periods.” Services exports, she said, continue to provide an important source of foreign exchange earnings, while remittances remain a significant support to external balances. She warns though that “persistent fiscal and current account deficits have continued to place pressure on the peso.”