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Opinion

Why Are Investors Looking Elsewhere in ASEAN?

by Contributor
written by Contributor

THE PHILIPPINE stock market has underperformed several regional peers. Is the weakness temporary—or does it reveal a deeper challenge for the country’s capital markets?

The Philippine stock market is sending a message that deserves closer attention.

The PSEi closed at 5,736.69 on October 7, 2026. That was about 5.2% below its end-2025 level of 6,052.92 and about 12.1% below its end-2024 level of 6,528.79. The decline in 2026 has occurred amid the war in West Asia, higher oil prices, global risk aversion, and uncertainty over US monetary policy. But these factors cannot explain the entire story. The Philippine market was already losing ground before the latest geopolitical shock.

The more interesting question, therefore, is not simply why Philippine stocks have fallen. It is why investors have been more willing to put their money into several other ASEAN markets.

The regional comparison is striking. According to ASEAN Exchanges data, by the end of August 2026, the Philippine PSEi was down 1.6% for the year. In contrast, Singapore’s STI had gained 23.9%, Thailand’s SET 26.6%, Malaysia’s KLCI 2.7%, and Vietnam’s VNI 2.7%. Indonesia’s JCI, however, was down 24.5%, reminding us that this is not a simple story of all ASEAN markets outperforming the Philippines.

That comparison makes the question more useful: what distinguishes the Philippine market from the ASEAN markets that have attracted stronger investor interest?

The weakness predates West Asia

The first point is important. It would be too easy to blame the present weakness entirely on the Middle East conflict, oil prices, and the Federal Reserve.

The Philippine Stock Exchange reported that the PSEi fell 7.29% in 2025 after rising only 1.2% in 2024. Foreign investors recorded net selling of ₱51.78 billion in 2025, compared with ₱23.18 billion in 2024.

The market therefore entered 2026 with a considerable problem already in place.

There was, in fact, a brief improvement early this year. The PSEi rose to 6,611.24 by February 27, before subsequently losing ground. This suggests that global conditions alone cannot explain the market’s performance. Investor sentiment toward Philippine equities has been changing over time, responding to a combination of domestic and international factors.

The PSE itself, in reviewing 2025, pointed to concerns over the peso, disappointing economic growth, and confidence-related issues as factors behind persistent foreign selling.

The implication is important: the West Asian conflict may have intensified an existing problem rather than created it.

Is foreign capital really fleeing?

This question needs more careful treatment.

At first glance, the foreign-selling figures from the PSE suggest a clear withdrawal. But the broader balance-of-payments data from the Bangko Sentral ng Pilipinas tell a more complicated story.

BSP data show that the Philippines recorded net portfolio investment of $615 million in January-June 2026, compared with a net outflow of $337 million during the same period of 2025. Equity and investment-fund shares recorded a net inflow of $683 million during the first half of 2026, compared with a $24 million outflow a year earlier.

Yet the quarterly pattern changed sharply. Net portfolio investment was positive by $1.082 billion in the first quarter but turned negative by $468 million in the second quarter.

This suggests that “foreign investors are fleeing the Philippines” is too simple a description.

The more accurate interpretation is that foreign portfolio capital has become highly selective and volatile. Investors can remain interested in the Philippine economy while reducing exposure to Philippine equities, shifting between asset classes or reallocating capital among emerging Asian markets.

That distinction matters.

Foreign direct investment tells a different story again. BSP data show nonresident investment liabilities under direct investment at $3.38 billion during January-June 2026, down from $4.12 billion a year earlier. The decline deserves attention, but it is not a collapse of foreign investment.

The Philippines, therefore, has not become invisible to international capital. The question is why its equity market is not attracting a proportionate share of that capital.

ASEAN is providing the comparison

This is where the Philippine story becomes more revealing.

Singapore’s strong stock-market performance reflects its role as a financial centre and safe regional destination, as well as the strength of its financial and technology-related companies.

Malaysia has benefited from its position in the semiconductor and electronics supply chain and from growing investment in data centres and digital infrastructure.

Thailand’s market has been supported by expectations surrounding tourism, technology and investment, although its performance is not immune to domestic economic and political uncertainties.

Vietnam has continued to attract attention because of its manufacturing and export-oriented development model.

Indonesia’s sharp decline shows that ASEAN is not a uniform success story. Indonesia has its own problems, including commodity exposure, currency pressures, and changes in investor sentiment.

The lesson is not that the Philippines should copy one of its neighbours.

The lesson is that international investors are comparing opportunities across the region.

Capital does not ask only whether an economy is growing. It asks where earnings can grow faster, where companies have room to expand, where markets are liquid, where currencies are reasonably stable, and where investors believe the rules of the game will remain predictable.

The economy beneath the stock market matters

A stock exchange ultimately reflects expectations about corporate earnings and the economy that generates those earnings.

The Philippines’ economic growth slowed sharply to 2.3% year-on-year in the second quarter of 2026. The International Monetary Fund’s September 25 Article IV assessment projected growth of only 3.4% for the full year, although it expects a recovery to 5.1% in 2027.

The IMF identified weaker private investment, a sharp fall in public construction investment, natural disasters and the prolonged property-sector slowdown among the factors weighing on the economy.

That matters to equity investors.

If economic growth slows, corporate earnings expectations weaken. If investment slows, future productive capacity becomes less certain. If property activity remains subdued, banks, developers and related industries can feel the effects. If oil prices rise, the country’s import bill increases and household purchasing power can come under pressure.

The stock market therefore reflects much more than daily sentiment. It is also a forward-looking assessment of the economy.

But there is another problem: market depth

The Philippines has a reasonably sophisticated capital market, but it remains relatively small compared with some regional peers.

The PSE had 282 listed companies at the end of 2025. Its average daily value turnover rose to ₱7.33 billion in 2025 from ₱6.10 billion in 2024, which is encouraging. Yet market depth remains an issue.

A market needs a continuous supply of new companies, new sectors, and new investment opportunities to remain attractive to global investors.

There are encouraging signs. International Container Terminal Services became the first Philippine company to reach a ₱2 trillion market capitalization in July 2026. The PSE also approved Maynilad Water Services for inclusion in the PSEi in August, while new rules for REITs, market making and listings are being developed.

The San Miguel Corporation follow-on offering raised ₱30 billion in August, and Arthaland’s October follow-on offering raised another ₱2.15 billion and was 1.43 times oversubscribed.

These developments show that capital raising remains possible.

But the broader challenge is to create a larger and more diversified pipeline of investable companies.

The market needs more than a better index

This leads to a larger development question.

A stock market should not be judged only by whether the PSEi rises or falls in a particular year. A deeper capital market can mobilize savings, provide equity financing to businesses, reduce excessive dependence on bank borrowing and help finance investment.

For the Philippines, this matters particularly as the country tries to expand manufacturing, infrastructure, digital services, logistics, healthcare, renewable energy and other productive sectors.

The objective should therefore not be to engineer a higher stock-market index.

It should be to create the economic and institutional conditions under which more Philippine companies can grow, list, raise capital and become attractive to both domestic and international investors.

What needs to change?

The first requirement is a stronger growth and earnings story.

Investors need confidence that Philippine growth can return to a durable trajectory closer to the country’s potential. Macroeconomic stability remains necessary, but stability alone is not enough. Investors also need evidence of rising productivity and expanding corporate earnings.

Second, the Philippines needs a deeper and more liquid equity market. More IPOs, larger public floats, stronger institutional participation, and a broader range of listed companies would give international investors more choices.

Third, the country needs to strengthen investor confidence and corporate governance. Transparency, predictable regulation, effective enforcement, and protection of minority shareholders are not abstract principles for capital markets. They affect the risk premium investors attach to Philippine assets.

Fourth, the Philippines needs to develop more investable growth sectors. Its strengths in business-process and digital services, electronics, logistics, and infrastructure provide a base, but the challenge is to generate more high-productivity companies capable of becoming major listed enterprises.

This is where the ASEAN comparison is particularly useful. Malaysia’s semiconductor ecosystem, Singapore’s financial and technology strengths, Thailand’s tourism and emerging technology sectors, and Vietnam’s manufacturing platform have all created identifiable investment themes.

The Philippines needs its own equally compelling investment narrative.

Finally, the country needs to continue improving capital-market infrastructure and accessibility. The PSE has already pursued measures to increase liquidity and listings, while recent reforms have reduced transaction costs and encouraged new market products. These efforts need to continue.

Capital markets are part of development infrastructure

The Philippine stock market’s current weakness should not be viewed merely as a problem for investors.

It is also a development issue.

A country that wants to attract investment needs a capital market capable of connecting domestic and international savings with productive businesses. A deeper market can help companies finance expansion, innovation and employment without relying exclusively on bank credit or government resources.

The Philippines therefore faces a dual challenge.

It must restore confidence in the underlying economy while simultaneously making its capital market deeper, more liquid, more diversified and more attractive to international investors.

The West Asian conflict, oil prices and US interest rates will eventually change. Global capital will continue to move from one market to another.

The more enduring question is whether, when investors compare opportunities across Asia, the Philippines can offer a sufficiently strong combination of growth, productivity, corporate earnings, market depth, governance and investor confidence.

That is ultimately what will determine whether Philippine equities merely recover from the current weakness—or whether the country’s capital market can become a stronger instrument for Philippine development.

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Opinion

Mobilizing More, Spending Better: The Philippines’ Fiscal Imperative 

by Contributor
written by Contributor

THE PHILIPPINES needs a stronger revenue base and a more disciplined system for turning every public peso into better services, stronger human capital, and productive investment.

The Philippines has entered a stage of development in which the quality of public finance will increasingly determine the quality of economic growth.

The country needs better schools, stronger health systems, more reliable infrastructure, improved transport, greater energy security, stronger climate resilience, and better opportunities outside the major urban centers. These requirements cannot be met simply by announcing larger budgets. They require the government to mobilize sufficient resources, use those resources efficiently and direct them toward areas that generate the greatest social and economic returns.

This makes the current discussion about fiscal policy particularly important.

Two major assessments released within days of each other point in broadly complementary directions. The International Monetary Fund’s 2026 Article IV Consultation, released on September 25, 2026, called for the Philippines’ medium-term fiscal adjustment to place greater emphasis on revenue mobilization while protecting priority social spending and creating room for productive public investment. It also stressed the need for reforms in procurement, project appraisal, project selection, and budget execution.

Three days later, on September 28, 2026, the World Bank released its Public Finance Review, Building on Reform: Public Finance for a Rising Philippines. It identified substantial potential fiscal gains from both stronger revenue collection and more efficient public spending.

The message is clear: the Philippines needs to mobilize more, but it also needs to spend better.

Fiscal capacity matters

The government’s latest medium-term fiscal program, as reported by the Development Budget Coordination Committee in its 2026 review, projects national government revenues of P4.807 trillion, or 15.8% of GDP, in 2026. Disbursements are projected at P6.466 trillion, or 21.2% of GDP, leaving a fiscal deficit of 5.4% of GDP. The government aims to bring the deficit down gradually to 3.5% of GDP by 2030.

That is important for fiscal credibility and debt sustainability. But fiscal consolidation cannot simply mean reducing expenditure.

For a developing economy, the composition of adjustment matters as much as its size.

Cutting productive investment, education, health or well-targeted social protection can weaken future growth while improving a short-term fiscal indicator. Conversely, mobilizing additional revenue and eliminating inefficient expenditure can create fiscal space without sacrificing development priorities.

That is why the debate should move beyond the simple question of whether government is spending too much.

The more useful questions are: Is the government collecting enough? Is it collecting fairly? Is it spending efficiently? And is each peso directed toward the country’s most important development needs?

The revenue side cannot be neglected

A country with ambitious development objectives needs adequate fiscal capacity.

The Philippines cannot depend indefinitely on a relatively narrow revenue base while expecting government to finance increasingly demanding responsibilities. Stronger revenue mobilization therefore has to be part of the development strategy.

The IMF’s September 25 Article IV assessment identified several possible areas: broadening the VAT base, strengthening excise taxation on luxury goods and goods detrimental to health or the environment, and improving the governance and design of tax incentives. It also emphasized stronger tax administration and advised against relying on tax amnesties as a substitute for durable revenue reform.

This does not mean simply increasing tax rates.

A better approach is to improve compliance, reduce unnecessary exemptions, modernize tax administration and ensure that businesses operating in comparable circumstances face broadly comparable obligations.

Digitalization can play an important role. Electronic invoicing, better data matching and stronger audit systems can make it harder for economic activity to remain outside the tax net while reducing unnecessary burdens on compliant taxpayers.

Tax incentives also deserve continuous scrutiny.

An incentive can be justified when it generates investment, employment, technology transfer or other measurable benefits that would not otherwise occur. But an incentive that continues automatically without demonstrating a meaningful public benefit becomes a permanent claim on fiscal resources.

The objective should therefore be more effective revenue mobilization, not indiscriminate taxation.

But more revenue alone will not solve the problem

This is the other half of the fiscal equation.

Every additional peso collected from citizens and businesses creates an obligation to demonstrate that it is being used responsibly.

The World Bank’s September 28, 2026 Public Finance Review estimates that comprehensive reforms could potentially generate combined additional revenue and savings equivalent to 3.6% to 7.1% of GDP annually. These are potential gains, not guaranteed budgetary savings, but their scale illustrates how much fiscal capacity may be available through better systems rather than simply higher taxes.

The World Bank identifies three broad areas for reform: increasing fiscal space through measures such as consolidated procurement and easier tax payments; closing fiscal gaps through measures such as expanded e-invoicing and audits and rationalization of VAT exemptions; and improving the targeting of health, education and social-protection spending.

Procurement is one important example.

The World Bank estimates that procurement reform alone could potentially save up to P435 billion annually. This does not mean P435 billion can automatically be added to the government’s available cash. It means that improving procurement processes, competition and purchasing efficiency could reduce the cost of obtaining the same goods and services.

That distinction matters.

Public financial management is not an abstract bureaucratic exercise. If a government can build a school for less without compromising quality, more classrooms can be built. If medicines can be procured more efficiently, more patients can be served. If infrastructure projects are selected according to economic and social returns rather than administrative convenience, scarce capital can generate greater benefits.

Efficiency is therefore itself a form of fiscal capacity.

The question is where the money goes

The Philippines’ development challenge is not merely to increase the size of the public budget. It is to improve the allocation of that budget.

Education is an obvious example.

The national budget provides substantial resources for education. But the ultimate measure of success cannot be the amount appropriated. It has to include whether children are actually learning, whether classrooms are delivered on time, whether teachers receive the support they need and whether disadvantaged communities receive adequate resources.

The same principle applies to health.

Higher health allocations matter, but so do access, targeting, procurement, preventive care and the ability to reach families before illness becomes financially devastating.

Social protection requires similar discipline. A program that reaches the wrong households, overlaps with another program or imposes high administrative costs can consume resources without achieving its intended objective.

The World Bank’s September 28 report argues that better targeting of health, education and social-protection programs could improve outcomes without necessarily requiring larger budgets. It estimates that a common social-program registry could potentially lift about 2 million Filipinos out of poverty, while stronger foundational learning and streamlined medical assistance could improve education and reduce health costs.

This is the essence of outcome-based public spending.

Public investment needs special attention

There is another reason the quality of expenditure matters now.

The Philippine Statistics Authority, in data released on August 7, 2026, reported that GDP grew by only 2.3% year-on-year in the second quarter of 2026. Gross capital formation fell 9.2%, while industry contracted 2.4%. Household consumption grew 2.8% and government consumption grew 8.3%.

The IMF’s September 25 assessment subsequently identified a sharp fall in public construction investment following stricter infrastructure project reviews as one factor behind the second-quarter slowdown, alongside weaker confidence and natural disasters.

There is an important lesson here.

Better scrutiny of infrastructure projects is necessary. But scrutiny should not become prolonged administrative delay.

A development project has value only when it moves from the budget to implementation. Roads, bridges, schools, hospitals, water systems and power infrastructure do not generate economic benefits while sitting in procurement or approval processes.

The objective, therefore, should not be to spend faster at any cost. It should be to select better projects, approve them efficiently, procure them competitively and implement them on time.

That requires stronger project appraisal, better procurement systems and clearer accountability for delays.

Fiscal reform should protect the future

The Philippines also faces pressures that cannot be postponed.

Climate-related disasters are becoming a recurring economic concern. Energy costs can be affected by geopolitical shocks. The country needs investment in resilient infrastructure, reliable electricity, and human capital. At the same time, demographic changes will eventually increase demands on health and social protection.

Fiscal policy must therefore look beyond the next budget year.

The IMF’s September 25, 2026 recommendation is particularly relevant: fiscal consolidation should be anchored in concrete revenue and expenditure measures while protecting priority social spending and creating room for higher-quality public investment.

This suggests a different way of thinking about fiscal discipline.

Fiscal discipline should not mean less government.

It should mean better government for every peso collected and spent.

Five priorities for a stronger fiscal system

The Philippines could therefore focus on five mutually reinforcing priorities.

First, broaden the revenue base. Improve compliance, modernize tax administration, review exemptions and incentives, and strengthen digital collection systems.

Second, make procurement more competitive and transparent. Consolidated purchasing, better competition, and digital procurement can reduce costs while improving accountability.

Third, shift from expenditure monitoring to outcome monitoring. Ministries and agencies should be judged not only on whether they spent their allocations, but on what those allocations achieved.

Fourth, strengthen project appraisal and execution. Infrastructure projects should be prioritized according to economic, social and environmental returns, with clear timelines and accountability for implementation.

Fifth, protect high-return human and physical investment. Education, health, social protection, climate resilience, energy and productive infrastructure should be protected even as less effective expenditure is reviewed.

These reforms should reinforce one another.

Better tax administration generates more resources. Better procurement reduces the cost of government. Better project selection improves the return on public investment. Better targeting improves the impact of social programs. Better budget execution converts allocations into actual services.

Together, they create fiscal space.

Every peso should deliver more

The Philippines’ fiscal challenge should not be reduced to a debate between higher taxes and lower spending.

That is too narrow for the country’s development needs.

The real objective is to build a state with enough fiscal capacity to finance development priorities and enough institutional capacity to use those resources well.

The IMF’s September 25, 2026 Article IV assessment and the World Bank’s September 28, 2026 Public Finance Review arrive at an important moment. The Philippines is seeking to sustain growth while gradually reducing its fiscal deficit. At the same time, the country faces demands for better education, health, infrastructure, social protection and climate resilience.

The answer cannot be simply to spend more.

Nor can it be simply to spend less.

The more durable answer is to mobilize more revenue, eliminate waste, improve efficiency, and allocate public resources where they can produce the greatest long-term benefit.

For ordinary Filipinos, this ultimately comes down to a very simple question.

When the government collects one peso, how much development does that peso deliver?

The success of fiscal reform should increasingly be measured by the answer.

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Opinion

When Climate Risk Becomes Economic Risk: The Philippines, ASEAN and a Changing World – Dr. Nirmal Ganguly

by Contributor
written by Contributor

CLIMATE change is usually discussed as an environmental problem. We hear about rising temperatures, stronger storms, changing rainfall, floods, droughts, and rising sea levels.

But for the Philippines, there is another way of looking at the same problem.

When a typhoon destroys a road, it is an infrastructure problem. When a flood closes a factory, it is a business problem. When drought damages a rice crop, it becomes a food and income problem. When a family loses its home, it becomes a household financial problem. When the government has to spend billions on reconstruction, it becomes a public-finance problem.

And when these things happen repeatedly, climate change becomes an economic problem.

That is why the climate debate in the Philippines needs to move beyond the environment. The real question is increasingly about how the country can protect its growth, jobs, incomes, infrastructure and development gains in a changing climate.

The real cost comes after the storm

The Philippines has no shortage of experience with natural disasters. But it is important to look beyond the immediate images of flooded streets, damaged houses and uprooted trees.

As of September 16, 2026, the National Disaster Risk Reduction and Management Council reported that damage to agriculture and infrastructure from tropical cyclones and the southwest monsoon since August had reached about ₱18.68 billion. Agricultural damage was estimated at ₱4.37 billion and infrastructure damage at ₱14.31 billion. The disasters had affected nearly 99,000 farmers and fisherfolk and damaged more than 81,000 hectares of crops.

Behind these numbers are real people.

A farmer may lose a harvest. A small shop may remain closed for several days. A worker may be unable to get to work. A family may have to borrow money to repair its home. A local government may have to divert money from another development project to repair a damaged road.

The cost of a disaster therefore does not end when the rain stops.

There is also the cost of lost production, lost income, lost working days and delayed investment.

That is the part of climate change that an economist needs to examine.

When a typhoon reaches the economy

Consider a simple example.

A bridge is damaged by a major storm. The government estimates the repair bill at ₱500 million.

That is the visible cost.

But suppose farmers on the other side of the bridge cannot bring their produce to market for several weeks. Workers cannot travel easily. Trucks have to take longer routes. Shops receive fewer customers. Food becomes more expensive.

The economic cost is now much larger than the repair bill.

This is why climate-related disasters can affect economic activity even when the physical damage appears relatively limited.

And if such disruptions happen again and again, the problem becomes more serious. Businesses may postpone investment. Families may reduce spending. Governments may have less money available for other development priorities.

Climate risk can gradually become a growth risk.

What happens to GDP?

There is an important distinction between recovering from a disaster and avoiding the economic consequences of repeated disasters.

An economy can rebuild after a typhoon. But rebuilding does not mean that the country has lost nothing.

If a newly built road has to be repaired repeatedly, resources that could have been used for a new school, hospital, irrigation system, or transport project are being used again to replace what was already built.

The World Bank Group’s Philippines Country Climate and Development Report, released on November 9, 2022, provides a sense of the potential scale of the problem. Its modeling estimated that climate-change damages could reduce the level of Philippine GDP by as much as 13.6% by 2040, relative to the relevant baseline, under the modeled climate-impact scenario. The report also estimated economic damages of up to 7.6% of GDP by 2030.

This does not mean that annual GDP growth would fall by 13.6%. It means that climate-related damage could leave the economy’s output level substantially below where it might otherwise have been.

That distinction matters.

The objective should not be to frighten people about the future. It should be to understand the economic cost of being unprepared.

Resilient infrastructure is not a luxury

This brings us to infrastructure.

When governments build roads, bridges, ports, electricity networks, water systems, schools and hospitals, they are making long-term investments.

But what happens if those investments are not designed with changing climate risks in mind?

The country may end up paying twice.

First, it pays to build the infrastructure.

Then it pays again to repair or replace it after a disaster.

There is therefore a strong economic argument for designing infrastructure to withstand the risks the country is increasingly likely to face.

An April 2026 Asian Development Bank assessment of the Laguna Lake area illustrates this broader approach. Laguna Lake supports more than 17 million people and important economic activities. The assessment emphasizes integrated, system-wide adaptation to safeguard livelihoods, ecosystems, and sustainable development.

The lesson extends beyond Laguna.

A flood-resistant road may cost more to build. A stronger drainage system may require greater initial investment. A power network designed to withstand extreme weather may be more expensive.

But the relevant question is not simply:

How much does resilience cost?

It is also:

-How much will the country lose if it does not invest in resilience?

That is a very different way of looking at development spending.

The farmer feels climate change first

For many ordinary Filipinos, the economic impact of climate change is felt not in GDP statistics but in the price of food.

Agriculture depends heavily on weather.

Too much rain can destroy crops. Too little rain can do the same. Extreme heat can reduce productivity. Floods can damage farmland, livestock, fishing and rural infrastructure.

On September 3, 2026, the Philippine Department of Agriculture reported that damage from heavy rains associated with the enhanced southwest monsoon and several tropical cyclones had reached ₱3.62 billion, affecting more than 86,000 farmers and fishers and more than 74,800 hectares of agricultural land.

The consequences do not stop with farmers.

When production falls, food supplies can tighten. Prices can rise. Families have to spend more on basic necessities. Poorer households are particularly vulnerable because food takes up a larger share of their household budgets.

This is how climate change travels from the farm to the kitchen table.

The next problem may be too little rain

There is another dimension that deserves attention.

The Philippines can move from dealing with excessive rainfall and flooding to worrying about drought.

On September 23, 2026, the Philippine Atmospheric, Geophysical and Astronomical Services Administration, or PAGASA, warned that the ongoing Strong El Niño could intensify into a Very Strong El Niño between September and December 2026 and persist through the first half of 2027.

For farmers, this creates a difficult situation.

The problem is not simply that there is too much rain or too little rain.

It is that weather is becoming more difficult to predict and manage.

That uncertainty affects planting decisions, crop choices, farm investment and rural incomes.

It can also affect food prices and inflation.

The latest regional assessment reinforces this concern. In its September 2026 Asian Development Outlook, the Asian Development Bank identified a very strong El Niño as one of the principal risks to the region’s growth and inflation outlook. It warned that lower agricultural production and reduced hydropower could push food and energy prices higher.

Climate risk therefore enters the economy through one of the most basic things in everyday life: what people eat and what they pay for it.

Who pays when disaster strikes?

There is another question that deserves much greater attention:

Who ultimately pays for climate-related losses?

If a house, farm, shop or factory is insured, some of the financial burden can be transferred through insurance.

But many households and small businesses have limited insurance coverage.

When disaster strikes, they may have to use savings, borrow money or depend on government assistance.

The government then faces its own problem.

After a major disaster, it has to spend more on relief, reconstruction and social protection. Yet the same disaster may disrupt economic activity and reduce incomes and, potentially, government revenues.

A disaster can therefore become a fiscal shock.

This may sound like a technical financial issue.

It is not.

For an ordinary family, insurance can mean the difference between recovering and falling deeply into debt.

For government, better disaster-risk financing can mean preserving resources for schools, hospitals, infrastructure, and social protection instead of repeatedly diverting them toward emergency reconstruction.

Our cities cannot ignore the water

The economic importance of climate resilience becomes particularly visible in cities.

The Philippines is increasingly urban, and its major cities are centers of employment, commerce, manufacturing, services, transport, and investment.

When a major urban area floods, the damage goes far beyond flooded streets.

Workers cannot get to their jobs. Businesses close. Deliveries are delayed. Public transport is disrupted. Electricity and communications can be affected. Goods and equipment may be damaged.

A few hours of severe disruption can therefore affect thousands of businesses and large numbers of households.

For coastal cities, the challenge is even greater.

Flood management, drainage, land-use planning, building standards, transport systems and coastal protection need to be seen not simply as environmental measures but as economic infrastructure.

A city that can continue functioning during extreme weather is a more productive city.

Nature is also economic capital

This is where the discussion needs to go one step further.

Climate resilience is not only about building stronger concrete structures. It is also about protecting the natural systems that already perform valuable economic functions.

The Asian Development Bank’s Asia-Pacific Climate Report 2025: Unlocking Nature for Development, published in October 2025, makes this argument explicitly. It estimates that about 75% of GDP in Asia and the Pacific comes from sectors that depend moderately or heavily on nature.

Agriculture depends on soil, water and pollination. Fisheries depend on healthy marine ecosystems. Tourism depends on beaches, forests, reefs and other natural assets. Communities depend on wetlands, mangroves and forests for protection from floods, storms and erosion.

When these ecosystems deteriorate, the economic consequences can include lower productivity, higher health and disaster costs, weaker livelihoods and greater pressure on public finances.

This changes the meaning of environmental protection.

A mangrove is not simply an environmental asset. It can also act as natural coastal protection.

A healthy watershed is not simply an ecological resource. It can help regulate water flows and support agriculture and communities.

A healthy marine ecosystem is not simply a conservation objective. It supports fisheries, tourism and coastal livelihoods.

The ADB report argues that nature needs to be recognized as productive capital and brought more directly into economic planning, investment and finance.

That is highly relevant to the Philippines.

The Philippines is part of a bigger Asian story

The Philippines is not alone.

Across Asia, countries are dealing with combinations of floods, droughts, extreme heat, stronger storms, and rising sea levels.

ADB’s Asia-Pacific Climate Report 2024: Catalyzing Finance and Policy Solutions, published in October 2024, estimated that climate change could reduce GDP across developing Asia and the Pacific by 17% by 2070 under a high-end emissions scenario, with the potential loss rising to 41% by 2100.

These are modeled scenario estimates, not forecasts of what will inevitably happen. They compare projected economic outcomes under the specified climate-change scenario with a counterfactual scenario without climate change.

But they underline the scale of the economic issue.

The 2025 ADB climate report adds another dimension. If around three-quarters of the region’s GDP depends on nature, then protecting ecosystems is not separate from protecting economic growth.

The two are increasingly connected.

ASEAN has a shared economic interest

The same argument applies to ASEAN.

The Philippines, Indonesia, Vietnam, Thailand, Malaysia and other ASEAN economies have different geographic and economic characteristics, but all face climate-related risks.

ASEAN is also increasingly integrated through trade, manufacturing, investment, tourism and regional supply chains.

A disruption in one country can therefore affect factories, ports, food supplies, tourism, transport and supply chains elsewhere.

Climate resilience consequently has a regional economic dimension.

The September 2026 ADB outlook illustrates this broader regional exposure. ADB says developing Southeast Asia’s growth outlook has improved somewhat, but the region remains exposed to the effects of geopolitical tensions, energy-price volatility and the strengthening El Niño. The interaction between climate, food, energy and economic conditions makes resilience increasingly a regional concern rather than simply a national one.

Nature itself also crosses borders.

Rivers, forests, coastlines, fisheries and marine ecosystems do not follow national boundaries. ADB’s 2025 climate report therefore emphasizes the importance of cooperation and planning at the appropriate spatial scale, including regional approaches where ecosystems and economic systems are interconnected.

A more resilient Philippines can therefore contribute to a more resilient ASEAN.

The difficult question: who pays?

There is, however, no easy answer.

Developing countries have limited public resources.

Governments have to finance schools, hospitals, housing, roads, public transport, social protection and other essential services.

Climate resilience requires additional investment.

It would be unrealistic to suggest that every road, building or community can immediately be protected against every possible climate risk.

The more practical approach is to identify the greatest risks and spend scarce resources where they can prevent the greatest future losses.

That means better planning.

It means better climate information.

It means stronger local governments.

It means designing infrastructure with future risks in mind.

It means valuing natural capital properly.

And it means bringing the private sector, financial institutions, and communities into the resilience effort.

Prevention can be cheaper than rebuilding

There is a simple economic lesson here.

Imagine two choices.

The first is to build infrastructure cheaply today and repeatedly repair it after every major disaster.

The second is to spend somewhat more today to make it stronger and more resilient.

The second option may appear more expensive at first.

But development policy cannot be judged only by the initial price.

The real question is the lifetime economic cost.

Money spent on resilience before a disaster may prevent much larger losses later.

The same logic applies to nature.

Restoring a mangrove, protecting a watershed or preserving a wetland may not look like a conventional infrastructure project. But if these ecosystems reduce flood exposure, protect livelihoods, support fisheries or regulate water, their economic value can extend well beyond the environmental benefits.

This is one of the important messages emerging from ADB’s 2025 climate report: nature can be treated as productive capital rather than as an economic asset that has value only after it has been converted into something else.

That is why climate adaptation should increasingly be regarded as an investment rather than merely an expenditure.

From disaster response to economic resilience

The Philippines has developed considerable experience in responding to disasters.

The next challenge is to place greater emphasis on preventing economic losses before disasters occur.

That means using climate information in agricultural planning.

It means incorporating climate risk into infrastructure decisions.

It means improving drainage and urban planning.

It means strengthening insurance and disaster-risk financing.

It means protecting forests, mangroves, watersheds, wetlands, and coastal ecosystems that provide economic and protective functions.

It means ensuring that local governments have the capacity and resources to prepare for increasingly difficult weather conditions.

And it means making climate resilience part of mainstream economic planning rather than leaving it entirely to environmental agencies.

Protecting tomorrow’s growth

The most important point is perhaps the simplest.

Economic growth is not only about producing more this year.

It is also about protecting the productive capacity that allows people to earn more, businesses to invest more and communities to improve their living standards over many years.

If repeated climate shocks destroy roads, crops, homes, businesses and public infrastructure, part of the country’s development effort is spent simply replacing what has already been built.

That is a costly way to develop.

But the reverse is also true.

If governments protect infrastructure, strengthen food systems, improve disaster-risk financing and preserve the natural assets on which communities and businesses depend, resilience can protect the foundation for future growth.

The Philippines therefore needs to increasingly treat resilience as part of economic planning.

This does not mean ignoring other development priorities. On the contrary, it means protecting those priorities from being repeatedly undermined by climate-related shocks.

For the Philippines, the economic case for climate resilience is becoming clearer.

It is about protecting infrastructure.

It is about protecting farmers and food supplies.

It is about protecting businesses and jobs.

It is about protecting public finances.

It is about protecting cities and communities.

It is also about protecting the natural assets that silently support much of the economy.

And ultimately, it is about protecting the gains that ordinary Filipinos make through their work and enterprise.

Climate change may begin with the weather.

But its consequences increasingly reach the wallet, the workplace, the dinner table, and the national budget.

That is why climate risk is becoming economic risk.

And for the Philippines, climate resilience is increasingly becoming a development investment.

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Opinion

The Philippine Economy in September 2026: Can Resilience Become Recovery? 

by Contributor
written by Contributor

AS SEPTEMBER 2026 closes, the Philippine economy is sending mixed signals. The latest assessments from the Asian Development Bank (ADB), International Monetary Fund (IMF) and S&P Global Ratings all point to a significant slowdown in 2026, although they differ on its depth.

ADB, in its Asian Development Outlook September 2026 update released on Sept. 23, lowered its Philippine growth forecast for 2026 to 3.3%, from 3.8% in July, and its 2027 forecast to 5.1%, from 5.3%. Then came the more cautious assessment from S&P Global Ratings on 23 September again, which cut its 2026 forecast sharply to 2.9%, from 4.1%, and lowered its 2027 projection to 5.4%. 

However, the IMF, following its 2026 Article IV Consultation mission from September 15 to 25, projected 3.4% growth this year and 5.1% next year. 

The numbers are different, but the message is broadly similar: the Philippine economy is facing a more difficult second half of 2026 than was expected only a few months ago.

The important question, however, is not simply how low this year’s growth may be. It is whether the country can convert its underlying resilience into a stronger and more broadly felt recovery.

The Q2 numbers changed the conversation

The starting point is the second-quarter GDP report released by the Philippine Statistics Authority on August 7.

The economy grew only 2.3% year-on-year in Q2, following 2.8% in Q1. Gross capital formation fell 9.2%, while industry contracted 2.4%. Household consumption grew 2.8%, services expanded 4.5%, and agriculture, forestry and fishing grew 2.7%.

The weakness in investment is particularly important. Public infrastructure spending slowed sharply, while private investment was also affected by weaker confidence and uncertainty. The IMF’s September 25 assessment specifically linked the Q2 slowdown to declining public construction investment, weaker confidence, natural disasters and a prolonged property-sector slowdown.

This explains why the latest forecasts have moved so sharply downward. The problem is not simply that consumption has weakened. The more consequential issue is that one of the principal engines of future productive capacity—infrastructure and investment—has lost momentum.

The household economy is under pressure

For ordinary households, GDP forecasts are meaningful only when they translate into prices, jobs and purchasing power.

The latest inflation data, released by the PSA on September 4, showed headline inflation at 6.1% in August, only slightly lower than 6.2% in July. Core inflation was 4.1%.

Food, transport and energy costs remain particularly important because they affect household budgets directly. The impact is not evenly distributed. Lower-income families generally have less room to absorb increases in food, transportation and utility costs.

The IMF now expects inflation to average 5.6% in 2026 before easing to 4.1% in 2027. ADB has retained its 2026 inflation forecast at 5.9% but raised its 2027 forecast to 4.4%, partly because of the expected impact of El Niño.

This makes the recovery challenge more complicated. An economy can recover statistically while households continue to feel squeezed if prices rise faster than incomes.

The jobs picture is mixed

The labor market provides another reason for caution.

The PSA’s July Labor Force Survey, released on September 8, showed unemployment at 6.0%, equivalent to about 3.14 million people. Employment stood at about 49.2 million.

The unemployment rate was higher than a year earlier and also above the April level. That does not mean the labor market has stopped generating jobs, but it does suggest that employment conditions are not yet strong enough to provide a broad-based cushion against slower economic activity.

For the Philippines, the quality of employment matters almost as much as the number of jobs. A sustained recovery needs more productive employment, better wages and stronger opportunities for younger workers—not merely a return to headline employment growth.

Monetary policy faces a difficult balance

The Bangko Sentral ng Pilipinas raised its Target Reverse Repurchase Rate by 25 basis points to 5.0% on September 23.

That decision illustrates the difficult policy balance. Slower growth normally creates room for monetary easing. But elevated inflation, energy prices and peso weakness can work in the opposite direction.

The IMF’s September 25 assessment said the BSP’s tightening had kept inflation expectations anchored and described the current monetary policy stance as approximately neutral. It said further tightening should depend on whether inflation remains elevated or second-round effects intensify.

In other words, monetary policy cannot be judged simply by asking whether rates are high or low. The central bank has to balance price stability against an economy that is already growing well below its recent potential.

The peso and the external account

The peso also remained under pressure, although it recovered modestly on September 25. After closing at P62.73 per US dollar on September 24, it strengthened to P62.46 on September 25. The PSEi also rebounded 1.67% to 5,825.97, breaking a five-session losing streak.

The combination of higher energy prices, a relatively firm US dollar and weaker growth expectations has nevertheless created a difficult external environment.

This matters because the Philippines is a major importer of energy. A higher oil bill affects not only transportation costs but also electricity, production, logistics and ultimately household purchasing power.

At the same time, the country retains substantial external buffers, including large international reserves and continuing remittance inflows. The external position therefore presents a pressure point, not a reason to overlook the economy’s underlying capacity to absorb shocks.

Climate is becoming an economic issue

One of the most important developments this week is that the weather outlook has become more concrete.

On September 23, PAGASA warned that the currently active El Niño is expected to intensify into a Very Strong El Niño between September and December 2026 and persist through the first half of 2027.

ADB has similarly warned that a strong El Niño could persist through the first quarter of 2027, bringing drier conditions, smaller harvests and possible reductions in hydropower generation.

This is no longer simply an environmental concern. It can affect agricultural output, food prices, electricity supply, household incomes and inflation expectations.

For an economy trying to regain momentum, climate-related disruption can therefore become a direct macroeconomic issue.

Trade remains an important source of resilience

The picture is not uniformly weak.

First-semester merchandise trade data released by the PSA on September 22 showed total external trade in goods rising strongly from a year earlier. Electronics exports have also provided an important source of support.

ADB noted that strong global demand for electronics helped cushion the domestic slowdown. The IMF similarly identified the global technology cycle as one of the Philippines’ pockets of strength.

This is significant. It shows that the Philippines remains connected to sectors benefiting from global technological change.

The opportunity now is to deepen that connection. Electronics, digital services, renewable energy, business-process services, advanced manufacturing and other tradable sectors can generate stronger productivity and better employment if supported by reliable infrastructure, skills and investment conditions.

Three forecasts, one common message

The difference between the three latest forecasts deserves attention.

ADB sees 3.3% growth in 2026. The IMF sees 3.4%. S&P Global Ratings is considerably more cautious at 2.9%. S&P also lowered its 2027 forecast to 5.4%, compared with 5.1% from both ADB and the IMF.

Forecast differences are normal. They reflect different assumptions about energy prices, investment execution, external conditions and the speed of recovery.

What matters more is the common diagnosis. All three institutions are pointing toward weak investment, higher energy costs, food-price pressures and external uncertainty as important constraints.

That convergence should command attention.

The stock market gives a mixed signal

The stock market has reflected these concerns, but its latest movement also provides a useful reminder not to read too much into one day’s market action.

The PSEi fell for five consecutive sessions and closed at 5,730.02 on September 24, its lowest level of the year. But on September 25 it rebounded by 95.95 points, or 1.67%, to 5,825.97, breaking the five-session losing streak.

The rebound suggests that investors were willing to return after the sharp decline. But the broader market remains sensitive to growth forecasts, inflation, interest rates and global risk sentiment.

The stock market, therefore, is best viewed as one indicator of confidence—not as a substitute for measuring the real economy.

Can 2027 really be the year of recovery?

All three institutions expect stronger growth in 2027.

But a forecast of around 5% growth next year should not be interpreted as automatic. It depends on several conditions: public investment must recover, private investment must respond, energy pressures must ease, inflation must moderate, and the global environment must become less disruptive.

The IMF has placed particular emphasis on the execution of public investment. It argues that fiscal adjustment should rely more on revenue mobilization while protecting priority social spending and creating room for higher-quality public investment. It also calls for reforms in procurement, project appraisal and project selection to improve the execution of capital spending.

This is an important distinction. Fiscal discipline and public investment do not have to be opposing objectives. Better revenue mobilization and better public financial management can create room for productive investment while maintaining fiscal credibility.

Resilience must become productive capacity

The Philippines still has significant strengths: a young population, a large services sector, strong technology-linked exports, substantial remittance flows, an established business-services industry and opportunities for foreign investment.

The IMF has also pointed to the potential for stronger foreign investment and the country’s young population as longer-term sources of growth. It has highlighted electricity-grid upgrades, renewable energy, business-environment reforms, artificial intelligence and deeper regional integration as areas that can raise productivity.

These strengths matter because the present slowdown is not simply about one quarter’s GDP number.

The deeper issue is whether the Philippines can use this period of slower growth to improve the foundations of the next expansion.

That means better infrastructure execution, more reliable energy, stronger human capital, greater agricultural resilience, more efficient public spending and a business environment capable of attracting long-term investment.

The real test is broader than GDP

As September 2026 comes to an end, the Philippine economy is neither without strengths nor without significant pressures.

The latest evidence points to a clear slowdown. Q2 growth was weak. Investment has fallen sharply. Inflation remains elevated. The peso is under pressure. The weather outlook has deteriorated. The Middle East conflict continues to affect energy prices and external conditions.

But the country also retains important sources of resilience. Trade remains dynamic, technology exports are benefiting from global demand, services remain a major economic pillar, external buffers are substantial, and the financial system remains capable of absorbing shocks.

The central challenge is therefore not simply to restore a particular GDP growth rate.

It is to make growth more productive, more investment-led and more widely felt.

If 2027 brings the recovery that ADB, the IMF and S&P broadly expect, the quality of that recovery will matter as much as its headline percentage.

The Philippines has demonstrated resilience through repeated external shocks. The next step is to turn that resilience into productive capacity—into better infrastructure, stronger businesses, more productive workers, more secure incomes and better opportunities.

That is what would make the next recovery durable.

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Opinion

The Philippines and the New Global Trade Map: Can It Turn Change into Opportunity? – Dr. Nirmal Ganguly

by Contributor
written by Contributor

AS TRADE, investment, and supply chains are being reshaped, the real challenge is turning new global openings into better jobs, stronger Filipino enterprises, and broader prosperity.

The World Economy Is Being Rewritten

Something fundamental is changing in the global economy.

For much of the past few decades, globalization followed a relatively straightforward logic: companies produced where costs were competitive and sold wherever markets were available. Efficiency, scale and access to markets drove decisions about investment and production.

That world has not disappeared. But it is becoming more complicated.

Geopolitical tensions, trade restrictions, technological competition, energy insecurity and repeated supply-chain disruptions have made governments and companies think differently about economic dependence. Businesses increasingly want supply chains that are not only efficient but also diversified and resilient.

That change matters enormously to Asia.

And it matters particularly to the Philippines.

The substantial agreement reached on September 22 between the Philippines and the European Union in negotiations for a free-trade agreement provides a timely illustration. The agreement is not yet a fully implemented FTA—it still has to go through the necessary legal and approval processes—but it represents a significant step toward deeper economic relations between the two sides. The EU was the Philippines’ fourth-largest trading partner in goods in 2025, accounting for 8.3% of the country’s total goods trade. Bilateral goods trade was €17.6 billion in 2025, while services trade reached €10.3 billion in 2024.

The significance goes beyond Europe.

The Philippines is entering a period in which countries and companies are reconsidering where they trade, where they invest, and where they place production.

That creates an opening.

But an opening is not yet an outcome.

A Trade Agreement Opens a Door. It Does Not Walk Through It

Trade agreements are often discussed in terms of tariff reductions, market access, and export opportunities.

Those things matter.

But imagine a Filipino manufacturer receiving a potentially valuable order from Europe.

The tariff barrier may have been reduced. Yet the company still needs reliable electricity, efficient ports, good roads, affordable financing, international certification, skilled workers, and predictable regulations.

A farmer hoping to reach an overseas market faces a similar reality. Market access means little if the produce cannot be transported efficiently, stored properly, or meet international quality standards.

A small technology company may have a global product but lack access to finance or the digital infrastructure needed to scale.

This is why the most important question about a trade agreement is not simply what it removes at the border.

It is what the Philippine economy can do after the border becomes more open.

The country needs the productive capacity to take advantage of the opportunity.

That means the EU agreement should be viewed not as an economic destination but as one possible platform for a broader development strategy.

Why the Timing Matters for the Philippines

The timing is particularly significant because Asia itself is becoming more deeply integrated while simultaneously becoming more competitive.

ASEAN is strengthening regional economic cooperation around supply chains, digitalization, investment, artificial intelligence, energy security and MSMEs. At the recent ASEAN Economic Ministers’ meetings in Manila, ministers also acknowledged the uncertainties arising from geopolitical and geo-economic developments. ASEAN’s economy is projected to grow 4.5% in 2026.

The Philippines therefore has two opportunities at the same time.

One is external: deeper access to markets such as the EU and stronger economic relationships with major economies.

The other is regional: becoming more deeply embedded in ASEAN production, services and investment networks.

These opportunities reinforce one another.

A company investing in the Philippines is not necessarily interested only in the Philippine market. It may be looking at the country as part of a wider Asian production and distribution network.

That makes the Philippines’ location within ASEAN an economic asset.

But assets have to be developed before they become advantages.

Before Joining More Trade Blocs, Ask What Existing Ones Have Delivered

The Philippines should therefore think beyond individual trade agreements and consider whether a broader portfolio of trade partnerships would strengthen its economic resilience. But there is an important question that should come first:

What has the country actually gained from the agreements it has already joined?

The answer is neither that trade integration has failed, nor that membership automatically delivers prosperity.

A PIDS study estimated that Philippine participation in RCEP could produce a 2.02% increase in real GDP compared with a scenario in which the Philippines did not participate. Another modelling exercise cited by the Philippine Senate estimated increases in exports and reductions in poverty under RCEP. These are projected or modelled effects, however, not gains that can simply be attributed to RCEP today.

More recent PIDS analysis of ASEAN integration finds that the Philippines has achieved real gains, but that these have been uneven, with continuing weaknesses in competitiveness, digital readiness and inclusive growth.

The lesson is important:

Joining a trade bloc creates possibilities; domestic capacity determines how much of those possibilities become economic gains.

RCEP Shows Both the Opportunity and the Limitation

RCEP, which entered into force for the Philippines in 2023, connects the country to a huge Asia-Pacific economic framework encompassing ASEAN, China, Japan, South Korea, Australia and New Zealand. It covers goods, services, investment, intellectual property, e-commerce and other areas.

It offers important opportunities.

But RCEP also demonstrates why simply counting trade agreements can be misleading.

As tariffs among members decline, Philippine exporters can gain access to markets while facing stronger competition from firms in other member economies. PIDS research has warned of preference erosion in some Philippine export markets as China, Japan and South Korea extend similar preferences to one another under RCEP.

That does not mean the Philippines joining RCEP is a mistake.

It means the Philippines must compete for the benefits.

The appropriate response is not to retreat from regional integration, but to become more competitive, diversify products and markets, and make better use of the opportunities already available.

There is also an important practical lesson. PIDS research before RCEP took effect urged Philippine businesses to become more aware of and actually utilize the trade agreements available to them, while encouraging innovation and exploration of new products and markets.

In other words, market access that businesses do not use has little developmental value.

The Philippines Has Already Begun Diversifying Beyond Asia

The country’s trade network is actually broader than is sometimes appreciated.

The Philippines has its ASEAN commitments, the Japan-Philippines Economic Partnership Agreement, the Philippines-EFTA Free Trade Agreement, the Philippines-Korea FTA and RCEP. It also benefits from ASEAN’s preferential arrangements with several major economies.

And there is now a new Middle Eastern dimension.

In January 2026, the Philippines and the United Arab Emirates signed a Comprehensive Economic Partnership Agreement, the Philippines’ first free-trade pact with a Middle Eastern country. The agreement seeks to reduce tariffs, expand market access for goods and services, increase investment and create opportunities for Filipino professionals. Philippine officials have said it targets at least 90% liberalization of tariff lines and trade value, while preliminary estimates suggest that Philippine exports to the UAE could increase by more than 9%.

This is significant for another reason.

It demonstrates that economic diversification need not mean choosing one region against another.

The Philippines can deepen its relations with China and the wider RCEP market while simultaneously expanding links with Europe, the Gulf, Japan, Korea, North America and other markets.

Diversification is not economic distancing. It is economic insurance and opportunity creation.

CPTPP Could Broaden the Philippines’ Options—But the Benefits Must Be Tested

This is why the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, deserves serious examination.

In June 2026, CPTPP members decided to begin preparatory discussions with the Philippines, Indonesia and the UAE. The preparatory discussions do not guarantee accession or even the launch of formal accession negotiations, but they move the Philippines closer to that possibility. The CPTPP currently has 12 members, including Japan, Australia, Canada, Malaysia, Singapore, Vietnam and the United Kingdom, and covers roughly 15% of global GDP.

For the Philippines, possible membership could broaden preferential access to important markets and deepen its position in Asia-Pacific supply chains.

But the government should approach this as an economic calculation, not as a geopolitical badge.

Before committing, it should assess sector by sector which Philippine exports and services could genuinely expand, which domestic industries could face greater competition, what adjustment costs workers and firms might bear, and whether the country can meet the agreement’s demanding standards.

The relevant question is not simply:

“What trade bloc can we join next?”

It is:

“Where can Philippine businesses compete, and which arrangement gives them the greatest practical opportunity to do so?”

The Next Initiative Should Be a National Trade-and-Competitiveness Audit

That suggests a more purposeful approach to trade policy.

Before joining another major agreement, the Philippines should undertake a systematic assessment of the gains already being generated by RCEP, ASEAN arrangements and other existing preferences—and identify precisely where utilization remains low.

It should map the products and services with realistic export potential, identify the firms capable of supplying those markets, and determine what prevents them from doing so.

The government should then address the practical obstacles: certification, customs procedures, logistics, energy costs, financing, digital connectivity, skills, and regulatory compliance.

This is particularly important for MSMEs, which often cannot take advantage of preferential tariffs simply because they lack the capacity to navigate international markets.

The objective should be simple:

Measure the benefits already available. Identify the benefits being missed. Fix the bottlenecks. Then decide which additional agreements offer genuinely significant gains.

That is a much more disciplined trade strategy than simply accumulating agreements.

The Philippines Cannot Compete on Low Costs Alone

For years, developing economies have competed partly through relatively low labor costs.

That strategy has its limits.

Another country can eventually offer lower wages.

The more durable source of competitiveness is productivity.

A productive worker using good technology and reliable infrastructure can create considerably more economic value than a worker operating in a poorly connected or inefficient production system.

This is why the Philippines needs to think beyond the question of how cheaply it can produce.

The more important question is:

What can Filipino workers and Filipino companies produce competitively at higher levels of value?

That points toward electronics, semiconductors, digital services, advanced business services, specialized manufacturing, agribusiness and other activities where skills, technology and organization matter increasingly.

The country’s existing strengths provide a foundation.

But the next stage requires moving upward in the value chain.

From Assembly to Capability

The semiconductor and electronics sector offers an instructive example.

The Philippines already participates in global electronics production. The opportunity now is to deepen that participation.

That could mean more sophisticated assembly, testing and packaging, but also greater capabilities in engineering, design, research, specialized components and related services.

ASEAN itself is working to strengthen its semiconductor ecosystem and regional supply-chain position. The Philippines has identified investment, technology development and workforce skills as important elements of this effort.

The principle extends beyond semiconductors.

A country gains more from globalization when its domestic companies gradually acquire the ability to design, innovate, supply, manage and export, rather than simply perform the least complex stage of production.

That is the difference between participating in a global value chain and developing greater domestic value from it.

The Philippines should therefore ask not only:

How many foreign companies can we attract?

It should also ask:

How much Filipino capability can each new investment help create?

The Small Filipino Enterprise Cannot Be Left Behind

This is where the discussion moves from macroeconomics to everyday economic life.

A large corporation can employ specialists to deal with customs, certification, financing, and international regulations.

A small Filipino business often cannot.

Consider a food producer in Iloilo, a furniture manufacturer in Cebu, an agricultural processor in Mindanao, or a digital entrepreneur in Davao.

The product may be good.

The market may exist.

But entering that market can require financing, certification, packaging, logistics, digital payments, market information and reliable delivery.

This is why MSMEs deserve to be at the center of the country’s trade strategy.

If global integration benefits only large corporations, its developmental impact will remain limited.

If thousands of smaller Filipino businesses become suppliers, exporters, technology adopters, and employers, the impact becomes much broader.

Globalization becomes development only when smaller domestic enterprises can participate in it.

The Most Important Export May Be a Better Job

Trade discussions often begin and end with exports.

Ordinary people experience trade differently.

A worker does not see an export statistic when a factory expands.

He sees a job.

A young graduate does not experience foreign investment as an FDI figure.

She experiences it as a decision about whether she can build a career at home.

A farmer does not see a trade agreement as a tariff schedule.

He sees whether someone will buy his produce at a price that makes farming worthwhile.

That is why the ultimate development test of globalization should be its effect on productive employment and household economic security.

More exports are valuable.

More investment is valuable.

But their wider importance lies in what they do to productivity, wages, skills and opportunity.

The goal should be to make participation in the global economy increasingly visible in ordinary economic life.

Skills Will Determine the Quality of Globalization

The Philippines has long possessed an important advantage: a large, relatively young and globally oriented workforce, with particular strength in English-language services.

But yesterday’s advantage cannot simply be assumed to be tomorrow’s.

Artificial intelligence is changing services.

Automation is changing manufacturing.

Digital technologies are changing commerce.

Semiconductor production is becoming more technologically sophisticated.

The country therefore needs a workforce capable not merely of performing established tasks but of adapting to new ones.

That means stronger technical education, industry-linked training, continuous reskilling and closer cooperation between universities, vocational institutions and employers.

The objective should not be simply to produce workers for today’s vacancies.

It should be to produce people who can remain productive as the economy changes.

That distinction could determine whether the Philippines moves into higher-value activities or remains concentrated in lower-value segments of global production.

Infrastructure Is Part of the Trade Strategy

There is another piece of the puzzle that can sometimes disappear in discussions about free trade.

Infrastructure.

Ports, airports, roads, power systems, telecommunications networks and digital infrastructure are not merely public-works projects.

They determine whether a company can compete.

If a shipment takes too long to reach a port, the exporter pays.

If electricity is unreliable, the manufacturer pays.

If logistics between a farm and a processing center are inefficient, the farmer pays.

If digital connectivity is weak, a small business loses customers.

The cost eventually reaches the consumer and the worker.

This is why infrastructure policy and trade policy should not be treated as separate subjects.

Market access is useful only when the economy can physically and digitally reach the market.

The Opportunity Must Reach Beyond Metro Manila

There is also a geographical dimension to the question.

The Philippines cannot build a genuinely broad-based economy if new opportunities remain concentrated in a handful of established economic centers.

Cebu, Davao, Clark, Iloilo, Cagayan de Oro and other emerging centers have the potential to participate more deeply in regional and global economic networks.

That requires logistics, reliable energy, digital connectivity, skills institutions and local business ecosystems.

Regional diversification has an economic advantage beyond reducing pressure on Metro Manila.

It allows more Filipinos to participate in economic growth where they live.

For a young person in Mindanao, the most meaningful sign of successful globalization may not be a larger export number.

It may be the availability of a good job without having to leave home.

The Philippines Needs a Connected Economic Strategy

The country already has many of the individual pieces.

What is harder is connecting them.

Trade policy must work with industrial policy.

Industrial policy must connect with skills.

Skills must connect with technology.

Technology must connect with infrastructure.

Infrastructure must connect with regional development.

And investment policy must encourage stronger links between foreign companies and domestic enterprises.

None of these policies can operate effectively in isolation.

A trade agreement can open markets.

But domestic competitiveness determines whether Filipino companies can enter them.

Foreign investment can bring capital and technology.

But local institutions and skills determine how much of that knowledge is absorbed.

Infrastructure can reduce costs.

But businesses still need finance, innovation and capable workers.

The challenge is therefore not to find one magic policy.

It is to make the economic system work more coherently.

What Should the Philippines Try to Capture?

This may be the most strategic question of all.

The Philippines does not have to manufacture everything.

Nor can it realistically compete everywhere.

The objective should be to identify areas where the country possesses—or can realistically develop—competitive capabilities and then build ecosystems around them.

That means asking where Filipino workers can become highly productive, where domestic firms can scale, where technology can be absorbed and where foreign investment can reinforce local capabilities.

It also means looking beyond the traditional boundaries between manufacturing and services.

A modern manufacturing plant needs software, logistics, finance, engineering, data management and professional services.

A digital company needs infrastructure, energy and skilled workers.

Agriculture increasingly requires technology, processing, logistics and sophisticated marketing.

The boundaries of the modern economy are becoming less rigid.

That creates opportunities for a country willing to think across sectors rather than within administrative silos.

The Measure of Success Is Not the Agreement

The Philippines will probably sign more trade and investment agreements in the years ahead.

That is not the end of the story.

The real test will be what happens afterward.

Does a Filipino exporter gain a new customer?

Does an MSME become part of a regional supply chain?

Does a factory create skilled employment?

Does a young graduate find a productive career at home?

Does a farmer receive a larger share of the value created by reaching an international market?

Does a Filipino company move from being a supplier to developing its own product, technology or brand?

These are the questions that turn trade policy into development policy.

A Changing World Requires More Than a New Trade Policy

The global economic map is being redrawn.

The Philippines cannot determine the course of geopolitical tensions, global interest rates, energy prices, or the trade policies of the world’s largest economies.

But it can determine how prepared it is to respond.

The EU–Philippines agreement is therefore important not because it solves the country’s development challenge, but because it illustrates the kind of opening that may become more important as the global economy changes.

There will be other openings.

There will also be disruptions.

The countries that benefit most will be those capable of adapting quickly, investing patiently, and building domestic capabilities.

For the Philippines, that means looking beyond the next trade agreement and thinking about the economic architecture that surrounds it.

The New Global Map Must Ultimately Be Visible on the Street

Globalization can sound abstract.

For ordinary Filipinos, it is not.

It is the factory job in Laguna.

The small business in Cebu.

The farmer in Mindanao.

The young professional deciding whether to build a future at home.

The entrepreneur trying to make the first overseas sale.

The family wondering whether the next generation will have better opportunities than the last.

That is where the success of the new global economic opening will ultimately be measured.

The Philippines has a chance to benefit from a world in which companies are looking for new production locations, investors are diversifying, and regional economic integration is deepening.

But opportunity alone does not create development.

The country has to build the capacity to capture it.

That means better skills, stronger infrastructure, productive Filipino enterprises, deeper regional integration, greater technological capability, and policies that connect foreign investment with domestic economic development.

The objective should not simply be to make the Philippines more connected to the world.

It should be to make that connection more productive for Filipinos.

The new global trade map is already taking shape.

The Philippines now has an opportunity to secure a stronger place on it.

The real achievement will be when that stronger place on the global map translates into something much more tangible on the streets of the Philippines: better jobs, stronger businesses, higher productivity, and a more secure economic future for ordinary Filipinos.

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Opinion

From Chairship to Legacy: How the Philippines Can Help Shape a Stronger ASEAN – Dr. Nirmal Ganguly

by Contributor
written by Contributor

A chairmanship lasts a year. Its most important decisions can last much longer.

For an ordinary Filipino, ASEAN can sometimes seem like something that happens far away—in conference rooms, ministerial meetings, diplomatic gatherings, and summit halls.

But ASEAN is not really distant from everyday life.

It is present when a Filipino worker competes for a job with workers elsewhere in Southeast Asia. It is present when a small business wants to sell beyond its local market. It is present when a young graduate searches for skills that will remain valuable in a rapidly changing digital economy. It is present when a farmer asks whether better roads, ports, and digital connections can bring products to a larger market. It is present when families worry about electricity costs, food prices, employment, and the quality of opportunities available to their children.

That is why the Philippines’ 2026 ASEAN Chairship matters beyond diplomacy.

The Philippines has identified three broad priorities for its Chairship—Peace and Security Anchors, Prosperity Corridors, and People Empowerment. Each has a diplomatic and strategic dimension. But each also has a very ordinary human dimension.

Peace means being able to live and work without fear.

Prosperity means having a realistic opportunity to earn, invest, and build a better life.

Empowerment means having the education, skills, technology and institutional support to participate meaningfully in the economy.

The more important question, therefore, is not simply what the Philippines can accomplish before its Chairship ends.

It is what it can leave behind.

The First Question: What Can Still Be Done in 2026?

The Philippines is already well into its year as ASEAN Chair. That naturally creates a sense of urgency.

There are only a few months left in 2026. The temptation at this stage is to concentrate on completing meetings, concluding declarations, and ensuring that the Chairship ends smoothly.

Those things matter. But they are not enough.

A successful Chairship should not be measured only by the number of meetings held or documents adopted. A more meaningful measure is whether some of the priorities placed on the regional agenda become practical initiatives that continue after the Philippines passes the Chairmanship to the next ASEAN member state.

That distinction is important because development rarely follows the calendar of diplomacy.

A regional supply chain cannot be created in six months. Skills cannot be transformed by one conference. A new energy system requires years of investment. Digital integration requires compatible standards, infrastructure, trust, and institutions. A small business does not become regionally competitive merely because an agreement has been signed.

Development needs continuity.

This is where the remaining months of the Philippine Chairship should be viewed differently.

The objective should not be to create an endless list of new initiatives.

It should be to identify a smaller number of practical priorities and give them enough institutional depth, financing possibilities, partnerships, and measurable objectives to survive beyond 2026.

That would turn a Chairship into a legacy.

Prosperity Corridors Must Reach the Ground

The idea of Prosperity Corridors provides an especially useful starting point.

The phrase sounds regional and strategic. But its real meaning should ultimately be measured at ground level.

Can a farmer reach a market more easily?

Can a small manufacturer find suppliers in another ASEAN country?

Can a Filipino entrepreneur sell a service to customers in Vietnam, Indonesia, Thailand or Malaysia without facing unnecessary barriers?

Can a young person acquire a skill in the Philippines that is recognized and valued across the region?

Can investment move more efficiently toward places where it can create productive employment?

These are the questions that give regional integration a human face.

ASEAN has already built important foundations for economic integration. It has developed mechanisms for trade facilitation, investment, customs cooperation, digital connectivity and business support. But the existence of regional mechanisms does not automatically mean that the ordinary entrepreneur experiences ASEAN as one accessible economic space.

There is therefore room for the Philippines to push a simple principle during the remainder of its Chairship:

Make ASEAN integration easier to experience.

That means concentrating on the practical obstacles that businesses and workers encounter every day.

For MSMEs, the problem may be information, finance, standards, logistics or market access.

For workers, it may be skills recognition and access to new forms of employment.

For entrepreneurs, it may be the cost and complexity of operating across borders.

For consumers, it may be the price and availability of goods and services.

The Philippines could help ASEAN develop a more systematic way of identifying these barriers and tracking whether they are actually being reduced.

That would be a quiet but meaningful form of regional leadership.

ASEAN’s Competitiveness Cannot Wait

There is another reason why this matters.

ASEAN is entering a period in which economic competition is becoming more intense.

Global supply chains are being reorganized. Technology is changing manufacturing and services. Artificial intelligence is beginning to alter the nature of work. Energy systems are undergoing major transitions. Companies are looking not only for low costs but also for reliability, skills, infrastructure, digital capability and resilience.

ASEAN has enormous potential.

But potential is not the same as competitiveness.

The region needs to move steadily from being a collection of attractive individual markets toward becoming a more deeply connected production, innovation and services ecosystem.

That requires better physical connectivity, but it also requires something less visible: institutional connectivity.

A road connects places.

A port connects markets.

A digital network connects people.

But common standards, compatible regulations, mutual recognition of skills, efficient customs procedures and predictable rules connect economies.

The Philippines can use its remaining Chairship to encourage precisely this kind of practical agenda.

The objective should not be to create a grand new architecture.

It should be to make the existing architecture work better.

People Empowerment Must Become Real Opportunity

The same principle applies to the third Philippine priority: People Empowerment.

This may ultimately be the most important of all.

Southeast Asia’s economic future will be determined not simply by how much capital it attracts, but by how effectively it develops and uses its people.

Consider a young Filipino entering the labor market today.

That young person may compete with someone in Vietnam, Indonesia, Malaysia or Singapore. Artificial intelligence may change the job before the worker reaches mid-career. Digital platforms may create opportunities but also uncertainty. Remote work may allow access to international markets while exposing workers to international competition.

The question is no longer simply whether ASEAN creates jobs.

It is:

What kind of jobs will ASEAN create, and will its people have the skills to obtain them?

That requires much greater attention to technical and vocational education, digital literacy, entrepreneurship, lifelong learning, AI-related skills, and portability of qualifications.

The Philippines could make skills cooperation a signature element of its continuing ASEAN agenda.

Not another declaration about the importance of human capital.

A practical system through which countries identify emerging skills, exchange training practices, encourage mutual recognition and help young people understand where future employment opportunities are likely to emerge.

That would bring ASEAN directly into the lives of millions of young people.

2027: The Philippines Has Another Window

Here lies one of the most interesting opportunities available to the Philippines.

The country’s ASEAN leadership does not end completely when the 2026 Chairship ends.

The Philippines is also the Country Coordinator for ASEAN–India Dialogue Relations for 2024–2027.

This creates an important bridge between the immediate Chairship and the longer development agenda.

The Philippines therefore has two connected windows.

The first is the remaining months of 2026, when it has the ability to place issues at the center of ASEAN’s regional agenda.

The second is 2027, when it can continue working through its coordinating role with India.

This should not be understood as an opportunity for the Philippines to promote India at the expense of other ASEAN partnerships.

Quite the opposite.

It is an opportunity to demonstrate how ASEAN can deepen relationships with a wider range of major economies and developing countries while retaining its own centrality.

India: From Diplomatic Relationship to Development Partnership

The Philippines’ relationship with India is acquiring greater momentum. Philippine officials have pointed to cooperation in areas including trade and investment, technology, connectivity, tourism, and people-to-people exchanges, while bilateral relations were elevated to a Strategic Partnership in 2025.

But the larger opportunity is ASEAN–India cooperation.

India brings capabilities and experience that could complement ASEAN’s development priorities in several areas.

Digital public infrastructure is one.

India’s experience with large-scale digital systems, payments and public-service platforms could offer useful opportunities for knowledge exchange.

Healthcare is another.

Pharmaceutical production, affordable healthcare technologies and health-system innovation could become areas of practical cooperation.

Agriculture, food processing, renewable energy, education, skills, startups, manufacturing and logistics offer other possibilities.

The important point is that ASEAN–India relations should not remain primarily a matter of diplomatic meetings.

They should increasingly be judged by the number of developmental connections they create.

Can an ASEAN startup find an Indian technology partner?

Can an Indian company establish a production or research partnership in Southeast Asia?

Can Filipino universities cooperate with Indian institutions on skills and technology?

Can farmers and food-processing companies learn from each other’s experiences?

Can renewable-energy cooperation reduce costs and improve energy security?

These are the kinds of questions that turn a diplomatic relationship into an economic and developmental partnership.

And this is precisely where the Philippines, as ASEAN–India Country Coordinator through 2027, can make a distinctive contribution.

The Real Challenge: Making the Momentum Survive 2027

But there is an important danger.

The Philippines should not build initiatives that depend entirely on the Philippines remaining in the driver’s seat.

That would make them vulnerable to the normal rotation of ASEAN Chairmanships.

The real objective should be to build initiatives that ASEAN owns collectively.

This is where the argument moves naturally beyond 2027.

If the Philippines can use 2026 to identify practical priorities, and 2027 to deepen selected partnerships—particularly through ASEAN–India cooperation—the next challenge is to ensure that those initiatives continue through successive Chairmanships.

That means creating institutional mechanisms, measurable targets, financing arrangements, private-sector participation and regular monitoring.

It also means accepting a basic truth about ASEAN:

No single member state can build ASEAN’s future. But a member state can help start something that ASEAN chooses to carry forward.

That is perhaps the most realistic definition of leadership in a consensus-based regional organization.

Beyond 2027: Where Today’s Decisions Begin to Matter

Now the horizon becomes longer—but not suddenly distant.

A Chairmanship lasts one year. A coordinating role lasts for a defined period. But the economic and social consequences of decisions made during those periods can continue for decades.

A regional supply chain established today can determine where investment and jobs are located years from now.

A young person trained today can carry those skills through an entire working life.

A digital standard agreed upon today can shape how businesses operate across borders for years.

A new transport, energy or communications connection can influence the development of entire communities.

This is why the period after 2027 matters.

It is the period in which today’s initiatives will either become institutions and functioning networks—or gradually disappear into the long record of regional declarations.

The Philippines cannot control that future.

But it can help influence what ASEAN chooses to carry forward.

And this is precisely where the longer-term vision of ASEAN 2045 begins to acquire practical meaning.

ASEAN 2045 Is Being Built Today

The year 2045 can sound very distant.

For someone worrying about today’s electricity bill, food prices, employment or school fees, it can seem almost irrelevant.

But development does not happen in one political or diplomatic cycle.

A child entering school today may be a young adult by the early 2040s.

A worker beginning a career today may still be working then.

Infrastructure being planned today may serve communities for decades.

A regional supply chain established now can shape investment and employment for many years.

A new transport, energy, or communications connection can influence the development of entire communities.

This is why the period after 2027 matters.

It is the period in which today’s initiatives will either become institutions and functioning networks—or gradually disappear into the long record of regional declarations.

The Philippines cannot control that future.

But it can help influence what ASEAN chooses to carry forward.

And this is precisely where the longer-term vision of ASEAN 2045 begins to acquire practical meaning.

ASEAN 2045 Is Being Built Today

The year 2045 can sound very distant.

For someone worrying about today’s electricity bill, food prices, employment or school fees, it can seem almost irrelevant.

But development does not happen in one political or diplomatic cycle.

A child entering school today may be a young adult by the early 2040s.

A worker beginning a career today may still be working then.

Infrastructure being planned today may serve communities for decades.

A regional supply chain established now can shape investment and employment for many years.

Skills developed today can determine whether people participate in tomorrow’s economy or are left behind by it.

That is why ASEAN 2045 should not be treated as a distant slogan.

ASEAN leaders adopted ASEAN 2045: Our Shared Future in Kuala Lumpur in May 2025. The vision sets out a long-term ambition for an ASEAN that is peaceful, stable, resilient, integrated, innovative, and people-centered.

The real issue now is implementation.

The next decade will determine whether that vision becomes part of everyday economic and social life.

And this brings us back to the Philippines.

The remaining months of the 2026 Chairship can help establish priorities.

The 2027 ASEAN–India coordinating role can help extend partnerships.

The years that follow can consolidate institutions, investment, and cooperation.

And the accumulated effect of these efforts can contribute to the ASEAN that emerges toward 2045.

This is not a jump from 2026 to 2045. It is a chain.

2026 can create momentum.

2027 can extend it.

The following years can institutionalize and scale it.

And 2045 can become the point at which ASEAN asks whether the region actually delivered on the promise it made to its people.

What Should the Philippines Leave Behind?

Perhaps the most useful question for the Philippines now is not:

How many initiatives can be completed before December?

It is:

Which few initiatives are important enough to survive December?

The answer could include a practical ASEAN agenda for regional value chains and MSMEs.

It could include stronger cooperation on digital transformation and AI-related skills.

It could include greater regional attention to energy security and clean-energy connectivity.

It could include more systematic cooperation on human capital and skills recognition.

It could include stronger ASEAN–India cooperation in technology, healthcare, agriculture, manufacturing and renewable energy.

And it could include mechanisms for measuring whether regional cooperation is actually improving access to markets, employment, investment and opportunity.

None of these would be easy.

ASEAN’s diversity is both its strength and its challenge. Member states have different levels of development, different economic structures and different national priorities.

But that is precisely why ASEAN cooperation matters.

The objective is not to make eleven economies identical.

It is to make their differences more economically productive.

A farmer in the Philippines does not need to become a farmer in Vietnam.

A Filipino technology worker does not need to become a Singaporean technology worker.

A small Indonesian manufacturer does not need to resemble a Malaysian company.

What they need is a regional environment in which their different capabilities can connect.

That is what deeper integration should ultimately mean.

The Final Test: Does ASEAN Make Life Better?

There is a simple way to judge all of this.

Imagine asking a Filipino family in 2030:

Has regional integration made any difference to your life?

Imagine asking a young worker:

Did ASEAN give you more opportunities to learn, work, and build a career?

Ask a small entrepreneur:

Did it become easier to reach customers in neighboring countries?

Ask a farmer:

Did better connectivity and regional markets improve your livelihood?

Ask a parent:

Did the region become safer, more stable, and more capable of providing opportunities for your children?

These questions bring the entire discussion back to where it began: ordinary people.

If regional cooperation can produce meaningful answers to those questions, ASEAN will have become more than an institutional project.

It will have become part of people’s lives.

And that is ultimately what the Philippine Chairship should seek to advance.

A Chairmanship Can End. Its Legacy Can Continue.

The Philippines will eventually hand the ASEAN Chairmanship to another member state. That is how ASEAN works, and it is one of the organization’s strengths.

But the end of a Chairmanship does not have to mean the end of its ideas.

The Philippines has an opportunity during the remaining months of 2026 to concentrate on practical initiatives that can be carried forward. Its continuing ASEAN–India coordinating role through 2027 provides another window to strengthen economic and developmental partnerships. After that, the responsibility will increasingly belong to ASEAN as a whole.

That is how a Chairmanship becomes a legacy.

Not through grand declarations alone.

Not through the number of meetings held.

Not through diplomatic visibility.

But through ideas that survive, institutions that continue, partnerships that deepen and opportunities that reach ordinary people.

For the Philippines, the most meaningful question may therefore be surprisingly simple:

When the Chairmanship is over, what will still be working?

If the answer includes stronger regional markets, better opportunities for young people, more competitive businesses, deeper connectivity, greater energy security, stronger ASEAN–India cooperation and more effective institutions, the Philippines will have contributed something far more valuable than a successful year of regional diplomacy.

It will have helped lay foundations.

And foundations are rarely visible when they are first built.

But they determine how high a region can ultimately rise.

That is why the Philippine Chairship should not be seen merely as a year in which the Philippines leads ASEAN.

It can be seen as an opportunity to help ASEAN build something that lasts well beyond the year in which the Philippines held the chair.

Skills developed today can determine whether people participate in tomorrow’s economy or are left behind by it.

That is why ASEAN 2045 should not be treated as a distant slogan.

ASEAN leaders adopted ASEAN 2045: Our Shared Future in Kuala Lumpur in May 2025. The vision sets out a long-term ambition for an ASEAN that is peaceful, stable, resilient, integrated, innovative, and people-centered.

The real issue now is implementation.

The next decade will determine whether that vision becomes part of everyday economic and social life.

And this brings us back to the Philippines.

The remaining months of the 2026 Chairship can help establish priorities.

The 2027 ASEAN–India coordinating role can help extend partnerships.

The years that follow can consolidate institutions, investment, and cooperation.

And the accumulated effect of these efforts can contribute to the ASEAN that emerges toward 2045.

This is not a jump from 2026 to 2045. It is a chain.

2026 can create momentum.

2027 can extend it.

The following years can institutionalize and scale it.

And 2045 can become the point at which ASEAN asks whether the region actually delivered on the promise it made to its people.

What Should the Philippines Leave Behind?

Perhaps the most useful question for the Philippines now is not:

How many initiatives can be completed before December?

It is:

Which few initiatives are important enough to survive December?

The answer could include a practical ASEAN agenda for regional value chains and MSMEs.

It could include stronger cooperation on digital transformation and AI-related skills.

It could include greater regional attention to energy security and clean-energy connectivity.

It could include more systematic cooperation on human capital and skills recognition.

It could include stronger ASEAN–India cooperation in technology, healthcare, agriculture, manufacturing and renewable energy.

And it could include mechanisms for measuring whether regional cooperation is actually improving access to markets, employment, investment and opportunity.

None of these would be easy.

ASEAN’s diversity is both its strength and its challenge. Member states have different levels of development, different economic structures and different national priorities.

But that is precisely why ASEAN cooperation matters.

The objective is not to make eleven economies identical.

It is to make their differences more economically productive.

A farmer in the Philippines does not need to become a farmer in Vietnam.

A Filipino technology worker does not need to become a Singaporean technology worker.

A small Indonesian manufacturer does not need to resemble a Malaysian company.

What they need is a regional environment in which their different capabilities can connect.

That is what deeper integration should ultimately mean.

The Final Test: Does ASEAN Make Life Better?

There is a simple way to judge all of this.

Imagine asking a Filipino family in 2030:

Has regional integration made any difference to your life?

Imagine asking a young worker:

Did ASEAN give you more opportunities to learn, work, and build a career?

Ask a small entrepreneur:

Did it become easier to reach customers in neighboring countries?

Ask a farmer:

Did better connectivity and regional markets improve your livelihood?

Ask a parent:

Did the region become safer, more stable, and more capable of providing opportunities for your children?

These questions bring the entire discussion back to where it began: ordinary people.

If regional cooperation can produce meaningful answers to those questions, ASEAN will have become more than an institutional project.

It will have become part of people’s lives.

And that is ultimately what the Philippine Chairship should seek to advance.

A Chairmanship Can End. Its Legacy Can Continue.

The Philippines will eventually hand the ASEAN Chairmanship to another member state. That is how ASEAN works, and it is one of the organization’s strengths.

But the end of a Chairmanship does not have to mean the end of its ideas.

The Philippines has an opportunity during the remaining months of 2026 to concentrate on practical initiatives that can be carried forward. Its continuing ASEAN–India coordinating role through 2027 provides another window to strengthen economic and developmental partnerships. After that, the responsibility will increasingly belong to ASEAN as a whole.

That is how a Chairmanship becomes a legacy.

Not through grand declarations alone.

Not through the number of meetings held.

Not through diplomatic visibility.

But through ideas that survive, institutions that continue, partnerships that deepen and opportunities that reach ordinary people.

For the Philippines, the most meaningful question may therefore be surprisingly simple:

When the Chairmanship is over, what will still be working?

If the answer includes stronger regional markets, better opportunities for young people, more competitive businesses, deeper connectivity, greater energy security, stronger ASEAN–India cooperation and more effective institutions, the Philippines will have contributed something far more valuable than a successful year of regional diplomacy.

It will have helped lay foundations.

And foundations are rarely visible when they are first built.

But they determine how high a region can ultimately rise.

That is why the Philippine Chairship should not be seen merely as a year in which the Philippines leads ASEAN.

It can be seen as an opportunity to help ASEAN build something that lasts well beyond the year in which the Philippines held the chair.

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Opinion

Beyond BRICS: What President Marcos’s New Delhi Mission Means for the Philippines, ASEAN and India

by Contributor
written by Contributor

THE PHILIPPINES is not seeking BRICS membership. It is seeking wider economic choices, stronger ASEAN engagement and a deeper strategic partnership with India.

When President Ferdinand R. Marcos Jr. entered the BRICS Summit in New Delhi, he was entering a forum that has changed considerably from the original BRICS of Brazil, Russia, India, China and South Africa.

The grouping now has 11 full members, including Indonesia, Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia and Iran. Its expanding membership gives it substantial weight in the economies of the Global South.

For the Philippines, however, the significance of New Delhi does not lie in any immediate ambition to become a BRICS member. Manila has indicated that it is not seeking immediate membership and instead intends to engage constructively with the evolving grouping.

That distinction matters.

The Philippines does not need to choose between different economic worlds. It needs to widen its ability to participate in them.

The global economy is becoming increasingly interconnected through overlapping arrangements—ASEAN, RCEP, BRICS, the G20, bilateral partnerships and numerous regional and sectoral initiatives. For a middle-income, trade-dependent economy such as the Philippines, maintaining access to several centres of growth can be more valuable than identifying itself exclusively with any one grouping.

President Marcos’s presence in New Delhi therefore represented an exercise in strategic economic diversification.

It was also an opportunity to bring an ASEAN perspective into a conversation increasingly concerned with the economic priorities of the Global South.

Marcos Brings ASEAN to the BRICS Conversation

Perhaps the most revealing feature of President Marcos’s intervention was that he did not speak simply as the leader of the Philippines.

He spoke with the wider responsibility of the 2026 ASEAN Chair.

The Philippines’ ASEAN Chairship carries the theme “Navigating Our Future, Together,” built around peace and security anchors, prosperity corridors, and people empowerment. The Philippine Embassy in New Delhi has emphasized that the Chairship seeks to promote a forward-looking, innovative, inclusive, and people-centred ASEAN while upholding ASEAN centrality and international law.

President Marcos brought this perspective into the BRICS discussion.

His intervention stressed the importance of an open, inclusive and outward-looking ASEAN, and the need for practical cooperation in dealing with global disruptions. He highlighted peace and security, economic resilience, climate action, responsible technology, disaster preparedness and inclusive development.

This was important because ASEAN’s economic future cannot be separated from the larger transformation taking place across Asia.

The region is confronting supply-chain disruptions, geopolitical tensions, climate shocks, technological change, food and energy-security pressures and the continuing need to create productive employment for a young and increasingly connected population.

For ASEAN, therefore, engagement with major emerging economies is not necessarily a question of alignment. It is a question of maintaining room for cooperation.

That is an important distinction.

ASEAN centrality should not mean standing apart from the emerging economic architecture. It should mean retaining the ability to engage different partners while preserving ASEAN’s own collective interests and strategic autonomy.

Beyond BRICS Membership

The most interesting question arising from the Philippine participation in New Delhi is therefore not:

Will the Philippines join BRICS?

The more consequential question is:

How can the Philippines benefit from the economic opportunities emerging around BRICS while retaining ASEAN centrality and strategic flexibility?

There is a substantial difference between membership and engagement.

A country does not have to become a member of every economic grouping to trade with its members, attract their investment, cooperate in technology, participate in infrastructure projects or develop new financial and commercial links.

For the Philippines, this distinction provides considerable policy space.

It can strengthen its relationships with the United States, Japan, South Korea, Australia, the European Union and other established partners while simultaneously expanding economic engagement with India, Indonesia, the Gulf economies, China and other emerging markets.

That is not inconsistency.

It is economic pragmatism.

The India Dimension Is Perhaps the Most Important Bilateral Outcome

If the BRICS Summit provided the multilateral setting, the meeting between President Marcos and Prime Minister Narendra Modi provided one of the most tangible bilateral opportunities.

The Philippines and India elevated their relationship to a Strategic Partnership in August 2025. Since then, both sides have been seeking to translate that political decision into a broader programme of cooperation.

The September 2026 meeting in New Delhi continued that process.

The two leaders reviewed progress in the Strategic Partnership and discussed ways to deepen cooperation in defence and security, trade and investment, railways, space, fintech, pharmaceuticals, agriculture and disaster resilience. India also welcomed the Philippines’ decision to join the Coalition for Disaster Resilient Infrastructure, an India-led international initiative.

This is significant because it moves the relationship beyond traditional diplomacy.

Defence and maritime security are important. But the long-term strength of a bilateral relationship also depends on whether it produces economic opportunities.

Railways, digital payments, pharmaceuticals, agriculture, space technology, infrastructure and disaster resilience are therefore not merely sectoral subjects.

They are potential building blocks of a broader economic partnership.

From Strategic Partnership to Economic Partnership

The Philippines and India now face a more difficult task: converting a promising diplomatic relationship into measurable economic outcomes.

This is where the 2025 State Visit of President Marcos to India becomes relevant.

During that visit, Indian companies announced potential investments of about $5.8 billion across areas including technology, healthcare, energy, and infrastructure.

Such commitments are encouraging. But investment announcements are only the beginning.

The real development sequence is:

investment pledge → actual investment → productive capacity → employment → technology transfer → exports → higher productivity.

The Philippines needs to concentrate on the entire chain.

The question should not simply be how much Indian investment is announced.

The more important questions are:

How many projects actually materialize?

How much domestic value is created?

How many Filipinos acquire new skills?

How much technology is transferred?

How much of the production becomes export-oriented?

And how much does this contribute to Philippine productivity?

These are the measures by which economic diplomacy ultimately has to be judged.

From Government-to-Government to Business-to-Business

This is why the meetings between Philippine and Indian business communities are particularly important.

The groundwork was already being laid before the BRICS Summit. In June 2026, the Philippine Embassy in New Delhi and the Federation of Indian Chambers of Commerce and Industry discussed expanding business, investment, tourism and creative-industry partnerships. FICCI had also worked with the Philippines during President Marcos’s 2025 business engagements in Delhi and Bengaluru.

During the New Delhi visit, President Marcos also met Indian business groups on opportunities involving airport development, digital payments and other areas of commercial cooperation.

This is precisely where political diplomacy has to become economic diplomacy.

The Philippines needs Indian companies not merely to express interest in the country but to see the Philippines as a location for long-term production, services, infrastructure and technology.

And Philippine businesses need to look at India not simply as a large market but as a source of technology, capital, expertise, partnerships and access to a wider economic ecosystem.

The relationship must increasingly become two-way.

Digital Payments Could Become More Than a Technology Story

Fintech deserves special attention.

India’s experience with digital public infrastructure and interoperable payments offers possibilities for cooperation with the Philippines as the latter expands its own digital economy.

The discussions between President Marcos and Prime Minister Modi included fintech and digital cooperation.

The potential significance goes beyond any single payment platform.

Easier and more interoperable digital payments can eventually reduce transaction costs for tourists, migrant workers, small businesses, exporters and consumers.

For small and medium-sized enterprises, such changes can matter enormously.

A digital transaction that is faster, cheaper and more reliable may appear insignificant at the level of an individual payment. Across millions of transactions, however, lower transaction costs can influence trade and productivity.

This is where technology cooperation becomes development policy.

Infrastructure: From Announcements to Capacity

The railway discussion between President Marcos and Prime Minister Modi also deserves attention.

The Philippines has substantial infrastructure needs. Better railways, airports, logistics systems and resilient infrastructure can lower the cost of moving people and goods, improve connectivity between regions and make investment outside the traditional economic centres more viable.

Indian expertise in infrastructure, engineering and technology could therefore become useful to the Philippines.

But again, the objective should be larger than completing individual projects.

Infrastructure should help create an integrated domestic market.

A railway is not simply a railway.

It can connect workers to jobs, farmers to markets, manufacturers to ports, students to educational opportunities, and smaller cities to larger economic centres.

That is why infrastructure cooperation with India could have a development impact well beyond the value of the individual contracts.

The ASEAN–India Opportunity

There is another reason why President Marcos’s New Delhi visit carries significance beyond bilateral relations.

The Philippines is currently both ASEAN Chair and Country Coordinator for ASEAN–India Dialogue Relations. The Philippine Embassy in New Delhi has emphasized that Manila intends to help advance the ASEAN–India Comprehensive Strategic Partnership during its coordinatorship.

This gives the Philippines a particularly useful diplomatic responsibility.

India has already become an important economic partner for ASEAN. The relationship encompasses trade, investment, connectivity, infrastructure, technology, education and people-to-people exchanges.

The Philippines can contribute to that relationship not by speaking for every ASEAN member on every issue, but by helping sustain practical cooperation between ASEAN and India.

President Marcos’s presence at the BRICS Summit consequently had a dual significance.

He was representing Philippine interests while also bringing the perspective of ASEAN’s current Chair into a major forum involving several of the world’s largest emerging economies.

That is a meaningful diplomatic opportunity.

A Wider Asian Economic Landscape

The larger Asian economic landscape is becoming more complex.

Indonesia’s participation in BRICS adds a major Southeast Asian dimension to the grouping. Other ASEAN economies are also exploring different forms of engagement with emerging economic networks.

The Philippines therefore faces a strategic choice—but not the conventional choice between one bloc and another.

Its choice is whether to remain sufficiently open and competitive to participate in multiple economic networks.

That requires domestic capability.

No amount of diplomacy can compensate indefinitely for weak infrastructure, high logistics costs, inadequate skills, regulatory uncertainty or insufficient productive capacity.

Foreign economic policy and domestic economic policy must therefore reinforce each other.

A country can sign a trade agreement, attract investment missions and participate in international summits.

But investors ultimately ask a more basic question:

Can we produce competitively here?

That is where Philippine economic policy must meet Philippine foreign policy.

Can Economic Diplomacy Become Industrial Policy?

This may be the most important question arising from President Marcos’s New Delhi visit.

The Philippines has become increasingly active in economic diplomacy. It is attracting foreign investors, pursuing infrastructure partnerships, strengthening strategic relationships and participating in major regional initiatives.

But the ultimate objective cannot be the accumulation of memoranda of understanding.

The objective must be productive transformation.

If Indian investment enters the Philippines, can it help develop local suppliers?

Can Philippine workers acquire higher-value skills?

Can technology move in both directions?

Can infrastructure reduce logistics costs?

Can pharmaceutical cooperation improve access to affordable medicines?

Can digital cooperation help small businesses?

Can agricultural technology raise productivity?

Can stronger connectivity encourage investment outside Metro Manila?

Can these relationships create new Philippine exports?

These are the questions that will determine whether economic diplomacy produces development.

The New Delhi Test

The 18th BRICS Summit has therefore presented the Philippines with both an opportunity and a test.

The opportunity is to engage a changing global economy more confidently.

The test is whether the Philippines can turn engagement into outcomes.

President Marcos’s participation does not mean that Manila has chosen BRICS over other partners. Nor does it need to.

The Philippines can remain firmly anchored in ASEAN while maintaining strong relations with the United States, Japan, Europe, Australia, South Korea and other partners—and at the same time deepen economic relations with India and other emerging economies.

Indeed, diversification may become increasingly important in an uncertain global economy.

The objective should be neither geopolitical exclusivity nor indiscriminate openness.

It should be strategic economic diversification.

Beyond the Handshakes: What Happens Next?

The photographs from New Delhi will eventually disappear from the news cycle.

The speeches will become part of the diplomatic record.

The summit declaration will move into the long machinery of implementation.

But the real significance of President Marcos’s participation will be determined later.

It will be seen in factories that actually open, infrastructure that actually gets built, digital systems that actually work, medicines that become more accessible, businesses that enter new markets, workers who acquire better skills and entrepreneurs who find new opportunities.

That is ultimately what international economic diplomacy is supposed to achieve.

The Philippines does not need to become a member of every emerging economic grouping.

It needs to become sufficiently competitive to benefit from the opportunities those groupings create.

And India can be an increasingly important partner in that effort—not because India offers a substitute for the Philippines’ existing relationships, but because the India–Philippines relationship itself is becoming broader, deeper and more economically consequential.

For ASEAN, the lesson is similar.

An outward-looking ASEAN does not have to choose between competing economic centres. It can engage them all while preserving its own centrality and collective voice.

For the Philippines, President Marcos’s journey to New Delhi therefore carries a significance that extends well beyond the 18th BRICS Summit.

The real story is not whether the Philippines moves closer to BRICS. The real story is whether the Philippines can use a changing Asian economic order to create more choices—and then turn those choices into better opportunities for Filipinos.

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Opinion

From Mineral Wealth to Industrial Wealth: Can the Philippines Build a  Sustainable, Viable  Critical Minerals Industry? 

by Contributor
written by Contributor

FOR A long time, the conversation about Philippine mining has revolved around a familiar question: How much mineral wealth does the country have, and how much revenue can be generated from it?

That question is important. But it is no longer enough.

The more important question today is: How much economic value can the Philippines create from what it mines in a sustainable way?

This distinction matters because critical minerals are no longer just commodities. Nickel, copper, cobalt, and other minerals are increasingly part of the supply chains behind electric vehicles, batteries, renewable energy, electronics, power systems, and advanced manufacturing.

The Philippines therefore has an opportunity that goes well beyond the mine site.

But there is another question that must accompany it: Can this opportunity be pursued without damaging the environmental and natural-resource base on which communities depend?

That is what makes the present moment different.

A new policy direction is taking shape

The recent policy direction is significant. President Ferdinand Marcos Jr. has approved Executive Order No. 122, establishing a national policy framework for the responsible development of the Philippines’ mining and critical-minerals sector and reorganizing the Mining Industry Coordinating Council.

The order goes beyond extraction. It promotes value-added processing and downstream industries, including refining, advanced materials processing, batteries, electronic components, and renewable-energy technologies. It also identifies supporting industries such as energy, water supply, transport, logistics, recovery and recycling. At the same time, it calls for responsible and sustainable development of critical-mineral resources.

That changes the conversation.

The policy question is no longer only how to extract mineral resources. It is how to build an industrial ecosystem around them—while ensuring that the environmental costs do not simply get pushed onto communities and future generations.

The direction is therefore becoming clearer: move from extraction toward value creation, but do so responsibly.

The nickel paradox

The Philippines already has a strong starting point.

In 2024, the country was the world’s second-largest nickel producer, accounting for about 9.5 percent of global production. It was also the world’s seventh-largest cobalt producer, although with a much smaller global share.

These are substantial positions in minerals that are becoming increasingly important to the global energy and technology transition.

Yet being a major producer of a mineral does not automatically make a country a major participant in the higher-value parts of the supply chain.

That is where the paradox lies.

If the Philippines exports ore, it earns from the ore. If it processes that ore, it can capture additional value. If it moves further into refined materials, components, or manufacturing, the potential value created inside the country becomes much larger.

The objective should not be to force every stage of production into the Philippines. That would neither be realistic nor necessarily efficient.

The objective should be more practical: identify the stages of the value chain in which the Philippines can become competitive—and then build the infrastructure, skills, technology and institutions needed to succeed in those stages.

From ore to industry

This is where the idea of “downstreaming” becomes much more than an industrial policy slogan.

A processing plant does not operate in isolation. It needs reliable electricity, water, ports, roads, logistics, engineers, technicians, maintenance services, financial services, laboratories, and suppliers.

Over time, it can create demand for universities, technical institutes, and research centers. It can encourage Filipino companies to become suppliers. It can create opportunities for technology partnerships and new enterprises.

That is how a mine can become the starting point of an industrial cluster rather than simply the source of an export commodity.

The Philippines should therefore ask a simple question about every major critical-minerals project:

What remains in the country after the mineral leaves the ground?

If the answer is mainly ore and export earnings, the economic opportunity is limited.

If the answer includes processing capacity, skilled workers, Filipino suppliers, technology, research, manufacturing capability, and new enterprises, the development impact is much greater.

And there should be another question:

What remains of the environment after the project is completed?

A genuinely successful mineral strategy must be able to answer both questions.

Copper tells another part of the story

Nickel is understandably at the center of the discussion, but copper deserves equal attention.

The Philippines produced about 256,800 dry metric tons of copper concentrate in 2024, equivalent to about 53,200 metric tons of copper metal. Copper concentrate production was valued at roughly ₱27.2 billion.

Copper is fundamental to electrification. It is used in power transmission, renewable-energy systems, electric vehicles, electronics, and infrastructure.

For the Philippines, this creates another possibility: linking mineral resources with the country’s broader industrial ambitions.

Mining policy, energy policy, manufacturing policy, infrastructure policy, and investment policy should not operate as separate compartments.

A copper project, for example, becomes much more valuable to the economy if it is connected to processing, engineering services, equipment supply, industrial parks, ports, renewable energy and manufacturing.

The real competition is not underground

This may be the most important point.

The Philippines is not competing simply on the basis of what lies beneath its soil. It is competing for investment, technology, processing capacity and a place in global supply chains.

And in that competition, geology is only the beginning.

Investors will look at the cost and reliability of electricity. They will look at ports, roads, water, logistics, and digital infrastructure. They will look at the availability of skilled workers. They will look at permitting, environmental rules, taxation, policy consistency, and the speed with which decisions are made.

A country can have excellent mineral deposits and still lose the industrial opportunity if the surrounding ecosystem is not competitive.

But competitiveness cannot mean lowering environmental standards to attract investment.

The Philippines needs a system in which responsible environmental performance becomes part of industrial competitiveness, not something treated as an afterthought.

This is why critical-minerals policy should ultimately become industrial policy—with environmental responsibility built into it from the beginning.

Mindanao must be part of the industrial story

The geographical dimension is equally important.

Mindanao is already central to the country’s mineral economy. In 2024, the Caraga region accounted for about 30.9 percent of the Philippines’ total metallic-mineral production value, the largest regional share.

That creates an opportunity to make mineral development part of a broader strategy for regional industrialization.

Mindanao should not simply supply raw materials to industrial centers elsewhere—or to industries outside the country. Where economically and environmentally feasible, processing, services, logistics, technical training and related industries should also be developed closer to the resource base.

That could mean jobs, skills and investment outside the traditional economic centers.

But this will require something more than mineral deposits. It will require reliable power, transport, water, ports, digital connectivity and a predictable regulatory environment.

And it will require careful environmental planning because many resource-rich areas are also environmentally sensitive and closely connected to the livelihoods of local and indigenous communities.

Processing is not automatically development

There is, however, a danger in becoming too enthusiastic about downstreaming.

A processing plant by itself does not guarantee inclusive development.

A project can bring large foreign investment but create relatively few high-quality local jobs. It can generate exports without creating much Filipino technological capability. It can increase government revenues while leaving communities to bear substantial environmental and social costs.

The real test, therefore, is not simply whether a processing plant is built.

The test is what kind of industrial capability is built around it—and what kind of environmental legacy is left behind.

How much technology is transferred? How many Filipino engineers, technicians, and managers acquire advanced skills? How many domestic firms become suppliers? How much research and development takes place locally? How much value is retained in the Philippine economy?

And equally important: How are water, forests, biodiversity, and community livelihoods protected?

These questions should be built into the investment conversation from the beginning.

Mining, industry and the environment: Development without compromising the future

This is the part of the critical-minerals debate that cannot be treated as a footnote.

Mineral deposits are located in real communities, watersheds, forests and agricultural areas. Indigenous peoples and local communities may have a direct stake in decisions about land and natural resources.

Faster permitting is important if the Philippines wants to attract investment. But faster should not mean weaker.

The goal should be clearer, more predictable, and more efficient regulation, while maintaining credible environmental and social safeguards.

There is also a broader principle at stake.

The world needs critical minerals for clean energy, electrification, and modern technology. But the transition to a cleaner economy should not create new environmental damage in the places where those minerals are extracted.

The Philippines therefore has an opportunity to demonstrate that mineral development and environmental stewardship do not have to be opposing ideas.

Responsible mining should mean protecting watersheds, reducing pollution, managing waste and tailings properly, rehabilitating mined areas, respecting biodiversity, and ensuring that affected communities have a meaningful voice.

Mining takes place somewhere.

That somewhere is somebody’s community.

That simple fact should remain at the center of the country’s critical-minerals strategy.

The Philippines should aim not merely for more mining, but for better mining—more responsible, more transparent, more environmentally conscious, and more closely connected to long-term industrial development.

Responsible development is not an obstacle to industrialization. It is part of the foundation on which durable industrialization must be built.

ASEAN could make the opportunity much bigger

The Philippines does not need to build an entire critical-minerals supply chain alone.

ASEAN offers an obvious platform for regional value chains.

Indonesia has moved aggressively into nickel processing. The Philippines has major nickel and copper resources, along with strengths in electronics and a growing manufacturing base. Other ASEAN economies bring capabilities in manufacturing, logistics, technology, finance, and downstream industries.

The opportunity is to identify where the Philippines can be genuinely competitive and connect those capabilities to a wider regional production network.

The objective should not be self-sufficiency at any cost.

It should be strategic participation.

And if the Philippines can combine competitive processing with credible environmental and social standards, that could become an advantage rather than a constraint.

The government now has to connect the dots

The new critical-minerals framework is an important beginning. But the difficult work starts now.

The Philippines needs to identify which minerals matter most, which stages of their value chains are commercially realistic, where processing facilities make economic sense, what infrastructure they require, and how Filipino workers and enterprises can participate.

At the same time, environmental safeguards cannot be left to a separate policy track.

Mining, industry, energy, infrastructure, education, investment, trade, environment, and regional development need to work together.

The 2026 Strategic Investment Priority Plan provides an important investment-policy foundation by identifying strategic and critical minerals and higher-value processing among priority areas.

But the next step is to turn that policy direction into a coherent industrial strategy—with clear priorities, measurable targets, strong domestic capability, and equally clear environmental standards.

The Philippines should know not only what it wants to produce, but also what kind of country it wants that production to help build.

From mineral wealth to industrial wealth—and environmental stewardship

The Philippines may be sitting on considerable mineral wealth. But mineral wealth by itself does not create lasting prosperity.

The real question is what happens after extraction.

Does the country simply export more ore? Or does it use its mineral endowment to build processing capacity, develop Filipino skills, create domestic enterprises, attract technology, deepen manufacturing, and strengthen regional supply chains?

And can it do all this while protecting the natural resources and communities that must live with the consequences?

That is the choice now emerging.

The Philippines does not need to become a mining superpower merely for the sake of producing more minerals.

It needs to become better at converting its natural resources into productive capabilities—while ensuring that economic progress does not come at the expense of the country’s environmental future.

That is a much more ambitious goal—and, ultimately, a much more meaningful one.

From mineral wealth to industrial wealth. From resource extraction to responsible value creation.

That should be the ambition.

Because the real opportunity is not simply to dig more.

It is to build more—and to build responsibly.

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Opinion

The Philippines Remittance Paradox: Can Overseas Success Build More Opportunity at Home? 

by Contributor
written by Contributor

FILIPINOS have turned migration into an extraordinary story of courage, sacrifice, and resilience. The next challenge is to make that success part of a stronger opportunity story at home.

There is something deeply moving about the Filipino relationship with migration.

For millions of families, an overseas job is not simply a job. It is a sacrifice made for a child’s education, a family’s home, a parent’s medical treatment, or simply the hope of giving the next generation a better life.

Behind every remittance is often a story that never appears in a national economic account: a mother missing her children, a father watching birthdays through a phone screen, a young Filipino postponing the dream of coming home because the family still depends on the monthly transfer.

So any discussion of remittances in the Philippines must begin with respect.

Filipinos working abroad have done something remarkable. They have taken their skills, resilience, and determination to the world and converted them into security and opportunity for families back home.

But precisely because this success has become such an important part of Philippine life, perhaps it is time to ask a different question.

Can overseas success help create more opportunity at home?

That is the real remittance paradox.

The success story is real

There is no denying the scale of the achievement.

The Philippine Statistics Authority estimated that about 2.19 million Overseas Filipino Workers were working abroad in 2024.

At the macroeconomic level, remittances have become one of the most stable pillars of the Philippine economy. Personal remittances were equivalent to around 8.7 per cent of GDP in 2024.

But these are not merely foreign-exchange numbers.

They pay school fees.

They buy medicines.

They help families build homes.

They support small businesses.

They provide a cushion when domestic incomes are inadequate or when the economy is hit by a shock.

And they give millions of families something extremely valuable:

choice.

The Filipino diaspora is therefore not an economic weakness. It is a remarkable national asset.

The question is whether the Philippines can capture more of the development value that this extraordinary global Filipino presence creates.

The uncomfortable question is not why Filipinos leave

It is tempting to ask why so many Filipinos continue to seek work abroad.

But that seems to be the wrong question.

People migrate because opportunities differ. A Filipino nurse, engineer, technician, seafarer, caregiver, construction worker, IT professional, or service worker naturally compares the opportunities available at home with those available elsewhere.

And when the difference is large enough, migration becomes a rational economic decision.

There is nothing wrong with that.

The more difficult question is:

Why should the opportunity gap between working abroad and working at home remain so large?

That shifts the conversation from the migrant to the economy.

And that is where the real development challenge lies.

The Philippines does not lack capable people. What it needs is an economy capable of making better use of them.

When leaving becomes the ladder to moving up

There is a subtle danger here—not that Filipinos migrate, but that migration can gradually become embedded in the national imagination as the most reliable route to upward mobility.

A young person grows up watching relatives work overseas.

A neighbour builds a house with remittances.

A cousin returns from abroad with savings.

A family finances a child’s education because someone is working in another country.

Over time, a powerful message can emerge almost unconsciously:

If a Filipino wants to move ahead, perhaps the current best option for many Filipinos is to leave.

That is not a criticism of the Filipino family.

It is simply how economic incentives work.

And it raises a larger developmental question.

What happens when a country’s most ambitious, mobile, and globally competitive people increasingly see their future elsewhere?

The answer cannot simply be to ask them to stay.

The answer has to be to make staying—or eventually returning—a more attractive economic proposition.

The World Bank’s warning is really about what comes next

This is where the conversation moves beyond remittances.

The World Bank’s Philippines Country Growth and Jobs Report 2025, “Running Uphill: Growth, Jobs, and the Quest for Productivity,” published in July 2025, argues that the Philippines needs to move towards stronger productivity, investment, and better-quality job creation if it is to sustain convergence towards high-income status.

The important point for our discussion is not that remittances are somehow undesirable. They are enormously valuable.

Rather, the development challenge changes as an economy becomes richer.

An economy cannot depend indefinitely on consumption, capital accumulation and income generated outside its borders. Over time, it has to become increasingly capable of creating productive, competitive and well-paying opportunities within the country itself.

That is the bridge between the remittance story and the development story.

The question is not:

“How does the country reduce remittances?”

It is:

“How does the country make the economy strong enough that remittances are increasingly complemented by productive investment and better jobs at home?”

That is a very different—and much more constructive question.

Remittances help families. Can they also help transform the economy?

This is where the discussion needs to become more nuanced.

A remittance received by a household can be used for consumption—and there is nothing inherently wrong with that. Consumption supports businesses, employment, and local economic activity.

But remittances can also finance education, health, housing, savings, and entrepreneurship.

The challenge is to create more pathways through which household-level financial gains can become productive economic gains.

Imagine if more families receiving remittances had easy access to credible investment opportunities.

Imagine if returning OFWs could obtain finance and technical support to establish businesses.

Imagine if overseas Filipinos could invest collectively in local enterprises, agribusiness, tourism, renewable energy, digital services, or manufacturing.

Imagine if their international experience could be connected systematically with Philippine firms seeking technology, management skills, and access to global markets.

The objective would not be to tell families how they should spend their money.

It would be to give them more choices.

That is a very different proposition.

The missing link is not money. It is opportunity

This may be the most important part of the conversation.

The Philippines already has a powerful financial flow coming from its people abroad.

What is often missing is the domestic ecosystem capable of converting part of that financial strength into productive investment.

That ecosystem requires several things at once:

better infrastructure;

more reliable and affordable energy;

easier business formation;

deeper access to finance;

stronger local supply chains;

better technical and vocational training;

more competitive manufacturing and tradable services;

and, above all, confidence that an investment made at home can actually flourish.

This is not a remittance problem.

It is an investment, productivity and competitiveness problem.

And that distinction matters.

The jobs question cannot be avoided

There is another reason this conversation matters.

The Philippines can point to millions of jobs and a relatively resilient labour market. But employment numbers alone do not tell the whole story.

In 2025, about 5.82 million employed Filipinos were classified as underemployed, equivalent to 11.9 per cent of employment.

Underemployment asks a more searching question than unemployment:

Does having a job necessarily mean having enough work, adequate income and a meaningful economic future?

For many households, the answer may still be no.

And this is where migration enters the picture again.

If a young graduate cannot find a job matching his or her skills, or if a skilled worker can earn several times more abroad, migration remains an understandable choice.

The solution is not to discourage that choice.

It is to improve the alternatives.

Perhaps the next frontier is the Filipino who comes home

We often count how many Filipinos leave and how much money they send home.

Perhaps we should also ask:

What happens when they return?

An OFW does not necessarily come home empty-handed.

He or she may return with savings, professional experience, international standards, new technologies, management practices, networks, and a much better understanding of foreign markets.

That is development capital too.

Yet returning migrants can face difficulty finding jobs that match their experience, limited access to business finance, bureaucratic obstacles and uncertainty about where their accumulated skills can be put to productive use.

A serious reintegration strategy should therefore be about much more than helping a returning worker find another job.

It should ask how the Philippines can turn returning human capital into domestic productive capital.

That could become a major development strategy in its own right.

From a remittance economy to an opportunity economy

The Philippines does not have to choose between migration and domestic development.

It can have both.

There will always be Filipinos who want to work abroad. Some will do so temporarily; others will build permanent lives overseas. The Filipino diaspora remains and will continue to remain an important part of the country’s economic and social fabric.

The objective should therefore not be to reverse migration.

It should be to change the relationship between migration and development.

Today, the relationship often looks like this:

Filipino talent goes abroad → income comes home → families become more secure.

The more ambitious model would be:

Filipino talent goes abroad → income, skills, networks, and experience come back → domestic investment and productivity rise → better jobs are created at home.

That is a much more powerful development cycle.

And it requires looking beyond the monthly remittance figure.

The day leaving becomes a choice, not a necessity

Perhaps this is ultimately how we should measure the success of Philippine development.

Not by asking how many Filipinos work abroad.

Not even by asking how many billions of dollars they send home.

But by asking something much more personal:

Does a young Filipino have a genuine choice?

A choice to leave because he or she wants to see the world.

A choice to stay because there is a credible and rewarding opportunity at home.

A choice to return because the country can make good use of the skills, savings and experience acquired abroad.

That is what economic development should ultimately provide:

choice, rather than compulsion.

The Philippines should never have to apologise for the extraordinary achievements of its people overseas. The OFW story is a story of courage, sacrifice and love for family. It is one of the country’s great human assets.

But perhaps the next chapter of that story should be different.

The Philippines should not merely ask what its people abroad can continue to send home.

It should ask what kind of economy it can build so that what Filipinos gain abroad can help create even greater opportunity at home.

If remittances can finance education, let education lead to productive employment.

If migration creates skills, let those skills find a productive home.

If overseas work creates savings, let some of those savings find credible investment opportunities in the Philippines.

If the diaspora creates global networks, let those networks help Philippine businesses reach the world.

And if Filipinos return, let them return not to a dead end, but to an economy ready to gainfully and productively use what they have learned.

That is when the remittance story becomes something larger.

The ultimate success of migration should not be measured only by how much Filipinos abroad send home. It should also be measured by how much opportunity their success helps create at home.

Perhaps that is the paradox worth embracing.

The Philippines does not need fewer successful Filipinos abroad.

It needs an economy capable of turning their success abroad into greater possibilities for those who remain—and better reasons for those who return.

That would be more than a remittance economy.

It would be a Philippines where leaving is an opportunity, returning is a possibility, and staying is a choice.

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Opinion

The Philippine Growth Paradox: Why is a High-Potential Economy Losing Momentum?  

by Contributor
written by Contributor

A DISAPPOINTING Number, and a Much Bigger Question

There are moments when an economic statistic deserves more than a passing glance.

The Philippines’ GDP growth of just 2.3 percent in the second quarter of 2026 is one such moment.

At first sight, it is simply a disappointing growth number. But I believe there is something much more important underneath it. The composition of growth tells us a story that deserves serious reflection.

Household consumption grew by 2.8 percent. Services expanded by 4.5 percent. But gross capital formation fell by a striking 9.2 percent. Industry contracted by 2.4 percent, while manufacturing grew by only 2.6 percent.

The question, therefore, is not simply: Why did Philippine growth slow down?

The more important question is: Why is an economy with so much potential finding it increasingly difficult to convert that potential into investment, productivity, competitiveness and better jobs?

This is the Philippine growth paradox.

The country has many of the ingredients that economists normally associate with a promising emerging economy. It has a young population, a large domestic market, a strategic geographical location, a globally recognised workforce, a vibrant services sector and considerable opportunities in manufacturing, tourism, digital services, logistics, agriculture and renewable energy.

Yet potential by itself does not create prosperity.

Potential has to be converted into productive investment. Investment has to raise productivity. Higher productivity has to generate better jobs and higher incomes. And higher incomes, in turn, have to support stronger and more sustainable consumption.

Somewhere in this chain, the Philippines appears to be losing momentum.

Consumption Can Carry Today. Investment Builds Tomorrow

Perhaps the most revealing number in the latest GDP figures is not the 2.3 percent growth in GDP. It is the 9.2 percent decline in gross capital formation.

Consumption is important. In fact, household consumption is one of the principal pillars of the Philippine economy. When Filipino families continue to spend, they keep businesses operating, workers employed, and economic activity moving.

But consumption largely reflects what an economy is able to enjoy today.

Investment determines what an economy will be capable of producing tomorrow.

A factory, a logistics center, a power plant, a modern port, a digital network, an irrigation system, a new business, or a technologically advanced production facility does not merely add to today’s GDP. It expands tomorrow’s productive capacity.

That is why the sharp fall in investment should concern us.

It is particularly striking because the Philippines does not appear to suffer from a shortage of investment opportunities. There are enormous opportunities. The issue is whether the economic environment is sufficiently attractive, predictable and competitive for those opportunities to become actual investments.

There is an important difference between having investment proposals and having investment on the ground.

A country may announce projects, approve investments and attract investor interest. But the real test comes later: Is the project actually built? Does the factory begin production? Does the business expand? Does it employ people? Does it become part of a domestic supply chain?

That is where the quality of the investment environment really matters.

Where is the Private Investment Engine?

The Philippines cannot rely indefinitely on government spending and household consumption to drive the economy.

The private sector has to become a much stronger engine of growth.

This does not mean that government investment is unimportant. On the contrary, public investment in infrastructure, education, health, energy and connectivity can crowd in private investment.

But ultimately, millions of investment decisions have to be made by private enterprises.

An entrepreneur has to decide whether to open another branch. A manufacturer has to decide whether to build another factory. A multinational company has to decide whether the Philippines is the right place for its next production facility. A small business owner has to decide whether it is worth borrowing and taking the risk of expansion.

These decisions are influenced by much more than tax incentives.

They depend on the cost and reliability of electricity, transport and logistics; the availability of skilled workers; access to finance; the ease of obtaining permits; the predictability of regulations; the efficiency of government agencies; the quality of infrastructure; and, increasingly, the ability to connect efficiently with regional and global supply chains.

Investment is ultimately a vote of confidence.

When investment weakens, we should ask ourselves what is making businesses more cautious.

The Industrial Question We Cannot Avoid

The weakness of industry is perhaps even more worrying.

The Philippines has built an impressive services economy. Business-process outsourcing, information technology, finance, retail, tourism and other services have become major sources of employment, exports and foreign exchange.

This is a considerable achievement.

But a successful services economy should complement, rather than substitute for, a strong productive economy.

Manufacturing matters because it creates supply chains. It encourages technology transfer. It generates demand for logistics, engineering and business services. It provides opportunities for skills development. It creates possibilities for exports and productivity gains.

Manufacturing growth of only 2.6 percent at a time when global production networks are being reorganised should therefore make us pause.

Countries across Asia are competing aggressively for factories, supply chains, technology and foreign investment.

The Philippines has the people and the location to participate much more strongly in this transformation.

But location alone is not enough.

An investor will compare costs, reliability, infrastructure, skills, regulations and market access across countries.

The question is not whether the Philippines is attractive in theory.

The question is whether it is competitive enough in practice.

Energy is No Longer Just an Energy Issue

Perhaps nothing illustrates this better than electricity.

For an ordinary household, an expensive electricity bill is a burden on the family budget.

For an industrial enterprise, expensive electricity becomes part of the cost of production.

And for an international investor deciding where to locate a factory, the cost and reliability of electricity can influence the entire investment decision.

The Philippines has enormous potential in renewable energy. It has solar, wind, geothermal and other resources. But potential resources are not the same as affordable and reliable electricity.

The country needs to think of energy not simply as a utility but as a foundation of competitiveness.

If electricity is expensive or unreliable, every factory, hotel, farm, office and small business pays the price.

Ultimately, consumers pay as well.

Infrastructure Must Reduce the Cost of Doing Business

Infrastructure discussions often become discussions about how many roads, bridges or airports are being constructed.

That is important, but it is not enough.

The real test of infrastructure is much simpler: Does it make people’s lives easier and businesses more productive?

Can goods move quickly from a farm to a market?

Can a manufacturer move its products from a factory to a port without excessive delay?

Can people travel between regions efficiently?

Can businesses obtain reliable electricity and water?

Can a young person in a provincial city access fast and affordable digital connectivity?

The Philippines is an archipelago. Geography is therefore not a minor consideration. Connectivity is central to economic development.

This is also why development cannot remain excessively concentrated around Metro Manila and a few major urban corridors.

The Philippines Cannot Leave Its Regions Behind

The economic future of the Philippines cannot be built around Metro Manila alone.

The National Capital Region remains enormously important, but the country has much more economic potential spread across its islands and regions.

There are agricultural regions that could develop food-processing industries. There are coastal areas with enormous tourism potential. There are cities that could become regional centres for manufacturing, logistics, education and healthcare. There are communities with young people who should not have to leave home simply because economic opportunity is concentrated elsewhere.

Balanced regional development is therefore not merely a matter of social fairness.

It is an economic necessity.

The Philippines needs several engines of growth rather than one dominant engine.

A more geographically diversified economy would also be more resilient.

The Productivity Problem

Ultimately, however, the most difficult challenge is productivity.

The Philippines has many hardworking people. But working harder is not the same as becoming more productive.

Productivity rises when workers have better skills, firms use better technology, infrastructure improves, capital is allocated efficiently, and institutions allow businesses to innovate and expand.

This is where the Philippines has a particularly important task ahead.

For many years, economic growth has been supported substantially by capital accumulation and by the expansion of services. The next stage of development must increasingly come from doing things better, not simply doing more of the same things.

That means improving technology, management, skills, research, logistics and the quality of investment.

It also means moving more workers and enterprises into higher-productivity activities.

This is ultimately where wages come from.

If productivity does not rise sufficiently, it becomes difficult to generate sustained increases in real incomes.

A Young Population is an Opportunity—But Only If We Use It

The Philippines’ young population is often described as one of its greatest advantages.

It is.

But a demographic advantage does not automatically become a demographic dividend.

Young people need education, skills, health, housing and productive employment.

They need to believe that they can build a decent future at home.

For a young Filipino, economic growth is not a number published every quarter.

It is whether there is a good job after graduation.

It is whether the salary is enough to live with dignity.

It is whether a family can afford housing.

It is whether healthcare and education remain within reach.

It is whether starting a small business is possible without becoming overwhelmed by costs and bureaucracy.

And perhaps most importantly, it is whether leaving the Philippines is a choice—or a necessity.

That is why the quality of growth matters as much as the quantity of growth.

The World is Changing. The Philippines Must Change With it

The global economy is also entering a different period.

Trade is becoming more fragmented. Geopolitical tensions are reshaping supply chains. Countries are competing for manufacturing investment, technology and strategic industries. Artificial intelligence is changing the nature of work. Climate change is increasing economic risks.

These changes create uncertainty.

But they also create opportunities.

Global companies are looking to diversify production and supply chains. The Philippines could benefit substantially from this process.

But opportunities do not wait indefinitely.

Vietnam, Indonesia, Malaysia, Thailand and other economies are also competing for the same investment.

The Philippines therefore needs to ask a very practical question:

What would make an international investor choose the Philippines—not simply consider it?

The answer has to be competitiveness.

The Growth Model Needs a New Balance

None of this means that consumption, services, or government expenditure are unimportant.

They are essential components of the Philippine economy.

But the country needs a better balance between consumption and investment, between services and industry, between Metro Manila and the regions, and between today’s economic activity and tomorrow’s productive capacity.

The objective should not be to abandon what has worked.

It should be to build on it.

A strong services sector can support manufacturing. Better infrastructure can attract private investment. Affordable energy can improve industrial competitiveness. Better skills can raise productivity. Regional development can open new markets. Stronger manufacturing can create demand for services.

These elements reinforce one another.

That is what a genuine development strategy should do.

The Philippines Does Not Lack Potential. It Needs Conversion.

The Philippine growth story should not be written as a story of failure.

It is a story of unfinished transformation.

The country has demonstrated resilience. It has built a dynamic services sector. It has a large domestic market. It has a young population, a strategic location and considerable human talent.

But these advantages cannot be taken for granted.

The latest 2.3 percent growth figure should therefore not be viewed simply as a bad quarter.

It should be viewed as a signal.

The sharp decline in investment, the weakness of industry, the modest expansion of manufacturing and the continuing competitiveness challenges tell us that the Philippines needs to look beyond the headline GDP number.

The fundamental challenge is to create an environment in which businesses want to invest, workers can become more productive, regions can develop their own economic strengths, and young Filipinos can find better opportunities at home.

This will not be achieved by one policy or one government program.

It requires sustained improvements in infrastructure, energy, skills, regulation, investment climate, technology and regional connectivity. It requires the government and the private sector to work together, while allowing competition and innovation to do their part.

But there is an even larger point.

Economic growth ultimately has meaning only when it improves people’s lives.

For the ordinary Filipino family, GDP growth is meaningful when incomes rise, employment becomes more secure, electricity becomes more affordable, transport becomes easier, healthcare and education become more accessible, and the possibility of a better future becomes more real.

For a young Filipino, prosperity should mean having the freedom to choose whether to go abroad—not being compelled to leave because there are too few opportunities at home.

For an entrepreneur, it should mean that a good idea can become a successful business without being buried under unnecessary costs and complexity.

For a farmer, it should mean being able to produce more, reach markets and earn a dignified income.

And for a child growing up outside Metro Manila, it should mean that geography does not determine the limits of his or her ambition.

The Philippines does not lack potential.

What it needs is the capacity to convert potential into investment, investment into productivity, productivity into better jobs, and better jobs into a broader prosperity that people can actually feel.

That, in the ultimate sense, is the real Philippine growth challenge.

And perhaps the most important question is not whether the Philippines can grow faster.

It is whether it can build a growth model that makes its considerable potential work for all its people.

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