Executive summary: Setting the course for faster growth in 2025
After another quarterly print that underscored slower momentum, the Marcos administration faces a pivotal decision: accelerate growth by targeted reforms or weather headwinds with short-term fixes. The path forward combines pragmatic policy adjustments, predictable rules, and investments that unlock private sector activity. The aim is to create a virtuous cycle where reforms attract capital, households gain real incomes, and export and tourism sectors synergize with domestic demand.
1) Accelerate infrastructure delivery with smart financing
Infrastructure remains a backbone for growth. To arrest the slowdown, the government should streamline project appraisal, expedite procurement, and maximize the utility of public-private partnerships (PPPs). Priorities include reliable power for industrial zones, road and port connectivity that reduce logistics costs, and digital infrastructure that enables e-commerce, remote work, and manufacturing hubs. Financing should emphasize credit-enhancing guarantees and blended-finance structures to mobilize private capital without ballooning public debt.
Key steps
- Publish a transparent pipeline with milestones, budgets, and risk registers to reduce uncertainty for investors.
- Expand PPP frameworks to include sector-focused funds and performance-based payments to ensure on-time delivery.
- Coordinate with regional governments to align national plans with local development priorities.
2) Improve the business climate and regulatory efficiency
Competitiveness hinges on predictable rules and lower frictions for business start-ups, licensing, and compliance. A dedicated reform package should reduce red tape, standardize permits, and digitalize filing systems to cut time and cost for small and medium-sized enterprises (SMEs) and large investors alike.
Practical reforms
- Consolidate business registries and create a one-stop digital portal for licensing and tax compliance.
- Clarify tax incentives for investments in hi-tech manufacturing, green energy, and export-oriented sectors to avoid ambiguity.
- Implement sunset clauses and independent oversight to prevent regime uncertainty and improve governance.
3) Stabilize energy supply and cost to support industry
Energy stability underpins manufacturing, logistics, and services. A credible plan to diversify supply sources, reduce price volatility, and encourage cleaner generation can buoy investor confidence and sustain job creation.
Actions to consider
- Accelerate renewable projects with clear tariff policies and streamlined permitting.
- Expand natural gas and other mid-merit capacity to smooth demand swings.
- Enhance grid reliability and reduce electricity prices for heavy users through targeted subsidies or competition reforms where appropriate.
4) Strengthen agricultural productivity and rural growth
A more robust agricultural sector supports employment and domestic demand. Policies should focus on modernization, access to credit, and market linkages to reduce vulnerability to external shocks.
Policy ideas
- Provide low-cost credit lines for smallholders to invest in yield-enhancing inputs and post-harvest facilities.
- Expand irrigation, storage, and transport networks to cut losses and raise farm incomes.
- Enhance agricultural processing to add value and create export-ready products.
5) Grow exports and tourism by targeted marketing and incentives
Global demand for Philippine products and experiences can be unlocked through selective incentives, improved logistics, and destination marketing. A strategic push in high-potential sectors—manufactured goods, agri-foods, and digital services—can widen the growth base.
What to implement
- Streamline customs and reduce non-tariff barriers for key export items.
- Offer stable, transparent incentives for tourism investments and hospitality upgrades in underserved regions.
- Promote digital services and remote-work hubs to attract foreign investment and skilled labor.
Policy cohesion and communication
Beyond individual reforms, the administration should maintain durable policy messaging, data transparency, and a quarterly update on macroeconomic projections. A credible, consistent plan reduces uncertainty and signals to markets that growth is the shared objective.
Conclusion: A practical reform agenda for 2025
To arrest the pace of slowing growth, the Marcos administration must couple near-term stabilization with medium-term reforms that unlock the private sector’s potential. By focusing on infrastructure, regulatory efficiency, energy stability, agricultural support, and export competitiveness, the Philippines can restore momentum and create a more resilient economy for 2025 and beyond.
