FINANCE SECRETARY Frederick D. Go is hopeful that the economy will return to normal in the first quarter, once people are connected to the organization. the flood control scandal is accelerating they were persecuted.
In a press conference on December 18, Mr. Go said government revenues could increase as early as 2026, depending on the speedy resolution of corruption-related cases.
“If we can successfully prosecute some people, the result will be faster in the economic growth in the first quarter. But for me, I hope that we will return to the situation in the first quarter,” he said.
In the third quarter, the country’s economic growth slowed to 4%, the slowest growth seen in four years. In the nine-month period, gross domestic product growth reached 5%, below the government’s target of 5.5-6.5%.
A massive controversy involving Public Works officials, legislators and private contractors over multibillion-peso corruption in flood control projects has dramatically dragged down government spending and spending.
“The key to all of this is to get through this public works investigation. The sooner people get out of it, the better the economy is and the better, therefore, the revenue collection,” said Mr.
“So, if all goes according to plan, we should be looking at a very clear 2026 in the first quarter.”
The decline in infrastructure spending has hampered government revenue collection.
Mr. Go said the Bureau of Customs (BoC) and Bureau of Internal Revenue (BIR) saw “soft” revenue collection this year due to corruption investigations, and the four-month ban on rice imports.
“Growth is growing. (The collections were soft) compared to the goals of the DBCC (Development Budget Coordination Committee),” he said.
Total deposits during the January to October period fell by 1.13% to P3.81 trillion, which is only 84.25% of the revised P4.52-trillion plan for the full year. The target is 2.23% higher than the actual collection of P4.42-trillion in 2024.
“At Customs, for example, we prohibited the importation of rice for about four months out of the 12 months of the year.
He also said that the decrease in revenue received by Customs is due to the bad weather that shortens the working days.
BoC Commissioner Ariel F. Nepomuceno last week said revenue collection may fall short of its annual target.
The BoC’s emerging revenue forecast for 2025 is P939.4 billion, 2% below the full-year target of P958.7-billion.
“Every time the peso depreciates, it usually leads to higher Customs collections because imports are based on the dollar. Maybe December should be a good month to collect,” said Mr. Go.
The peso has breached the P59-a-dollar mark several times since November and fell to a record low of P59.22 in Dec. 9.
Meanwhile, Mr. Go said the BIR collections for the month of December appear “encouraging.”
“For the BIR, I think it was doing very well in the first half of the year and gradually softened as time went on. But fortunately, it still recorded an increase in collections every month,” said Mr. Go.
In the first 10 months, BIR collections increased by 9.55% to P2.65 trillion, accounting for 82.35% of the P3.22-trillion target for the year.
Mr. Go said there is little chance that there will be an adjustment to the revenue target.
Economists met this month to review macroeconomic policy and objectives but have yet to issue a statement.
Analysts say economic recovery and strong revenue collection in early 2026 are still possible if government spending is combined with strong anti-corruption and governance reforms.
Economist Rizal Commercial Banking Corp. Michael L. Ricafort said economic recovery next year is possible.
“(Government spending) is an important driver of rapid economic growth. This was a drag in the third quarter due to political noise related to flood control plans,” he said.
Administrative reforms, as well as fiscal measures, can also help reduce the budget deficit and reduce reliance on borrowing, said Mr. Ricafort.
“The collection of income may continue to improve, given the large increase in activity during the holiday season and possibly next year,” said Reinielle Matt M. Erece, economist at Oikonomia Advisory and Research, Inc., in a Viber message.
However, he flagged the loss of trust in the government due to corruption as a potential risk, which could lead to reduced investment.
“Families, especially those who earn from the illegal sector, may find it a hassle to pay taxes because of the damage to the reputation of the public budget,” he said. – Aubrey Rose A. Inosante
