The government is making changes to deliver ‘modest results’ without overhauling governance
“Big, bold” government-proposed reforms are likely to backfire if governance problems that allow corruption are not tackled, a former central banker has said.
GlobalSource Principal Advisor Diwa C. Guinigundo, former Bangko Sentral ng Pilipinas (BSP) deputy chief said government agencies tasked with implementing reforms also need to be reformed.
“I think all of this can move the needle just a little bit,” said Mr. Guinigundo Money Talks with Cathy Yang on One News on Monday. “The problem is governance, it’s about corruption. And that’s the reason for the decline in FDI (foreign investment) and domestic investment.”
In October, net FDI inflows fell by 39.8% to $642 million.
Mr. Guinigundo noted that structural corruption and a culture of impunity are bigger problems than the ease of doing business.
“The issue is not just to do business easily, it is to ensure that there are policies to avoid corruption,” he said. “Because who is going to implement those game-changing and needle-moving programs unless the issue of corruption is addressed directly and the culture of impunity is also addressed by the Ombudsman and the public courts.”
On Friday, economic leaders unveiled their “big, bold reforms” to the private sector, including four major plans to restore investor confidence.
Among the proposed changes is the restoration of P4.32 billion in funding for the Comprehensive Automotive Resurgence Strategy (CARS), which could not be agreed with the budget. The grants are designed to support consistent investment and reward mass-production car manufacturers, as well as 14 days of visa-free entry for Chinese businessmen and tourists.
The government also wants to establish a digital audit system for the Bureau of Internal Revenue (BIR) and reduce the frequency of issuance of Letters of Authority, as well as launch a national platform to facilitate the one-stop trade of the Bureau of Customs to reduce red tape.
Various government agencies have come under scrutiny since the flood control scams were exposed in July. The BIR has also come under a cloud due to the alleged use of tax audits to extort money.
Growth slowed to a four-year low of 4% in the third quarter of 2025 as a result of damaged investor confidence and a drop in government spending after projects had to be revised further.
Meanwhile, the German-Philippine Chamber of Commerce and Industry, Inc. (GPCCII) called for consistent implementation and tangible results in the implementation of the government’s promised reforms.
In a statement on Sunday evening, GPCCII President Marie Antoniette E. Mariano said that management challenges and ongoing implementation are essential to transform these changes into lasting hope and inclusive growth.
“What investors and businesses will continue to look for is consistent implementation, transparency, and measurable impact – particularly on ease of doing business, regulatory clarity, and overall economic performance,” he said.
Mr. Guinigundo said the government can only restore the trust of investors if it ensures the proper administration of justice and respect for the law, ends impunity, and introduces real accountability to the entire society.ffinitials, while ensuring that monetary policy remains tight.
“In short, restoring investor confidence requires more than aspirational reform rhetoric,” Mr Guinigundo said in a separate analysis. “It requires measurable progress in governance, accountability, and fiscal responsibility. Without this, efforts to streamline regulations and encourage investment will remain stagnant – and business sentiment will continue to deteriorate despite official confirmation.” – Katherine K. Chan
