The government is redoubling its commitment to combating corruption in the bureaucracy, focusing on empowering citizens for a more capable public sector in driving governance reforms with transparency and accountability.
In releasing the latest update to the Philippines’ Medium-Term Development Plan 2023-2028 last week, the Department of Economy, Planning and Development (DEPDev) said good governance will be the order of the day for the remainder of President Ferdinand Marcos Jr.’s term.
The revised plan was released over the weekend, a day after London-based think tank Capital Economics pointed to corruption in infrastructure projects as potential threat to growth.
Fighting graft head-on
“During the remaining Plan period, the government will intensify efforts to foster a more inclusive and participatory governance framework, strengthen public accountability and integrity, optimize government operations through digitalization and strengthened collaboration, and develop human resources,” DEPDev said.
The updated plan outlines stricter enforcement of anti-corruption laws, early detection systems, and improved coordination across agencies.
Full implementation of the Philippine Government Electronic Procurement
System (PhilGEPS) by 2026 is targeted, along with expanded audits covering national and local offices, state firms and priority projects.
Balancing reform and risk
Arsenio Balisacan, DEPDev secretary, said the revised plan “refines the administration’s strategies under its transformation agenda through priority actions that aim to boost productivity across economic sectors, accelerate innovation and human capital development, generate high-quality jobs, and promote infrastructure development in support of the country’s long-term vision, the AmBisyon Natin 2040.”
The updated plan also draws lessons from the past three years while repositioning the economy amid global shifts.
However, Capital Economics flagged persistent worries about governance and political uncertainty. It noted the abolition of the Presidential Anti-Corruption Commission and the lack of transparency in the sovereign wealth fund as troubling signs.
Clouds over economic gains
The Capital Economics report cited Marcos’s economic progress: steady management of fiscal policy, infrastructure spending at over 5 percent of GDP, and reforms such as the CREATE MORE Act lowering corporate taxes and easing investment barriers.
Infrastructure upgrades have lifted logistics performance, expanded the expressway and rail networks and boosted digital access, it said.
Still, the think tank warned that political infighting — underscored by the rift between Marcos and Vice President Sara Duterte — has deepened instability. Duterte’s resignation from the Cabinet in 2024, her impeachment saga, and renewed tensions with Malacañang have left investors wary.
Business confidence at stake
Executives in the Philippine Chamber of Commerce and Industry said consistent governance is critical to sustaining investment flows.
“Global firms weigh not only tax breaks and infrastructure, but also rule of law and predictability in contracts,” the chamber said, noting that corruption cases in procurement remain among the top concerns of foreign chambers.
The World Bank’s latest enterprise survey showed that one in four Philippine firms reported having to pay informal fees to secure government contracts — a figure higher than most Southeast Asian peers.
Analysts said this weakens competitiveness and feeds perceptions that reforms on paper do not always translate to action.
Global spotlight on reforms
Multilateral lenders have also kept a close eye on anti-graft measures.
The Asian Development Bank stressed that efficient digital procurement and transparent bidding processes are crucial to maximizing the impact of infrastructure spending.
The International Monetary Fund, meanwhile, flagged that poor governance and leakages in public spending could blunt fiscal reforms and reduce investor appetite.
For Capital Economics, this international scrutiny underscores the stakes. “Marcos’ policy continuity has been a bright spot, but unresolved governance issues cast a long shadow,” it said, adding that the Philippines risks “falling behind Vietnam and Indonesia in the race to attract new manufacturing hubs.”
Unfinished business
“Overall, the progress that Marcos has made over the past three years is encouraging for the economic outlook. However, persistent concerns over corruption and political instability risk undermining this progress,” Capital Economics said.
It warned that persistent governance concerns “risk undermining progress,” adding that the Philippines could find it “difficult to keep pace with Vietnam and India” and might “miss out on opportunities from the global supply chain realignment.”
