New DOF chief bats for fiscal discipline
Exercising fiscal discipline will be critical heading into 2026 as the Philippines continues to reel from the flood control corruption scandal that weighed on economic growth, the Department of Finance (DOF) stressed.
According to Finance Secretary Frederick Go, agencies should direct their spending toward projects with the highest economic returns.
“The key to that fiscal discipline is that all the agencies take a very good look at their budgets and focus on the expenditures with the highest efficiency, the highest productivity, and perhaps forego some of their projects or expenditures that have low efficiency or low productivity,” he said.
The push for disciplined spending comes as the government moves forward with catch-up and reform measures following the flood control scandal.
The corruption scandal was a key factor in the 4 percent gross domestic product growth during the third quarter, the slowest pace seen in four years. This was attributed to curbed public spending on infrastructure, which also contracted to a decade-low.
Still, despite growth projections remaining below target, the economy is now expected to rebound in 2026.
For his part, Go said he is counting on the Office of the Ombudsman’s promise of prosecution, noting that most of the scandal is now “behind us.”
Already, controversial contractor Sarah Discaya has been detained on graft and malversation of public funds charges.
About P12 billion has already been earmarked for restitution, including frozen bank accounts, repossessed vehicles and other seized assets.
DPWH reforms
At the same time, reforms have been rolled out at the Department of Public Works and Highways (DPWH).
“For example, [the government has been] lowering the unit cost of DPWH projects and also video conferencing biddings. The President has also directed other agencies to look at how they can reduce costs. That’s all part of the reforms,” Go said.
The bicameral conference committee on the 2026 national budget has also slashed the DPWH’s allocation further to P529.6 billion, about P351.4 billion less than the P881 billion originally proposed by Malacañang.
Revenue collections, meanwhile, could improve toward year-end, although they are still expected to fall short of official targets, partly as uncertainty surrounding the scandal eases.
Go expressed optimism, saying that moving past the scandal is key to economic recovery.
“I wouldn’t say we’re over the hump, but I think most of it is behind us. People’s expectations now are proper prosecution, proper restitution and genuine reform in the public works arena,” the Finance chief said.
