Assessing the first half of the Marcos Jr. administration

(Part 1)

The end of 2025 marked more than half of the presidential term of President Ferdinand R. Marcos, Jr. As the year 2026 began, President Marcos Jr. had only 30 more months for attaining the goals that he had set for himself, especially for the Philippine economy. In this series of articles, I will assess the performance of his administration in some Key Result Areas (KRAs) that I consider of the greatest importance to the economic welfare of the Filipino people.

I gathered a group of young economists of the University of Asia and the Pacific (UA&P) to compare the performance of Mr. Marcos Jr.’s administration during the first half of his term to those of his two predecessors, President Benigno (Noynoy) Aquino III and President Rodrigo Duterte. I am grateful to economists Diana Rueda, Marco Agonia, and Jose Antonio Ramirez, all graduates of the Industrial Economics Program of UA&P, for the excellent research and communication assistance they contributed to the writing of these articles. The most thorough review by Mr. Ramirez of the efforts of the last three administrations at prudent fiscal management will be a featured article in the sequel to a book that will be written for the enlightenment of the next administration that will be in place by July 2028.

Briefly, under President Marcos Jr., who assumed office on June 20, 2022, the Philippines has recorded the following GDP growth rates so far:

For the whole year of 2022, GDP grew at the high rate of 7.6%, mostly a post-pandemic rebound, with strong reopening effects during the first months of the new administration. The year 2023 was not as lucky. It was the first of a series of years that the Marcos Jr. administration failed to meet its target of GDP growth of 6.5-8% by posting 5.5% growth only. Although this growth rate was still among the highest in the Indo-Pacific region (together with India and Vietnam), it fell short of the 8% growth needed to bring the poverty incidence of 16% down to a single digit by 2028. The year 2024 was no different, with a 5.6% GDP growth rate, still below the government target of 6-6.5%. Things got worse in 2025 when the GDP growth rate slowed down to 4.4%, the slowest increase in 15 years if we do not include the very abnormal period of the pandemic.

The major slowdown in activity in 2025 was a result of the flood control corruption scandal. A quick comparison to the previous administration of President Duterte shows that at the very macroeconomic level of GDP growth rate, the Marcos Jr. government has not performed as well. Under the Duterte administration (2016 to 2022), the annual growth rate average during the pre-pandemic years was about 6.4% It was -9.5% during the pandemic year 2020 and had a rebound in 2021 at 5.7% and 2022 at 7.6%.

It would be meaningful, however, to rate the present administration on the bases of the KRAs that are directly related to the most important goal of accelerating the GDP growth rate to 8% so that there will be sufficient resources to bring down the very high poverty incidence (compared to our ASEAN peers) that still hounds the Philippine economy.

These KRAs are food security, foreign direct investments (fdis), infrastructure, and good governance.

The first, food security, is intimately related to the performance of the agricultural sector which for the last decade or so has been performing poorly, growing at a yearly average of 0-1%. FDIs have compared very poorly with those of neighboring countries, especially with Vietnam that has averaged an annual FDI flow of $15-20 billion compared to our less than $10 billion yearly. Infrastructure spending reached the ideal of 5-6% of GDP only during the second half of the Duterte administration but has plummeted back to less than 3% in 2025 because of the massive corruption related to flood control projects involving the Department of Public Works and Highways, members of the Legislature, and some private contractors. I also included a comparative study of the fiscal discipline practiced by the three administrations.

I chose these KRAs for very specific reasons. President Marcos Jr. himself has repeatedly declared that he is assigning the highest priority to food security. In fact, he decided to be Secretary of Agriculture himself for the first 14 months of his presidential term and subsequently appointed a very competent Secretary in the person of Francis Tiu Laurel who has vast experience in aquaculture. Growing agriculture (which includes fisheries and forestry) at 3% or more annually is crucial to the urgent need to accelerate GDP growth from the average of 6% annually to at least 8% so that the high rate of poverty can be brought down to single digit levels at the end of this current term.

Other requirements for this 8% growth to be achieved is an annual flow of some $15-20 billions in FDIs which can supplement the meagre savings of the Philippines (at only 8% of GDP) so that the investment-to-GDP ratio of the Philippines can be raised close to the average 30% of GDP in the East Asian region.

A final conditio sine qua non for higher growth is an improvement in good governance so that the trillions of pesos lost through corruption (as happened in 2025) can be channeled to investing in infrastructure (especially farm to market roads), providing small farmers with the resources they need (irrigation, post-harvest facilities, access to credit, etc.) and improving the quality of basic education and the general health of the public, especially the poor.

(To be continued.)

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia