Like most Filipinos, I am deeply concerned about the country’s present condition. That concern has led me to collect my thoughts on this situation and express them in this commentary.

The conditions discussed here have, of course, been examined individually or in groups by many learned authors. My aim is to present a broad, usable picture that might prompt action among those who deeply lament the state of the Filipino nation. If it does not, I hope it will at least leave readers with a picture to contemplate.

Economic conditions

Current reports indicate that the Philippine economy is not in good shape. Forecasts for the country’s 2026 GDP growth rate vary little, with almost all placing it in the low 3% range. That would be a decline from last year’s 4.4% growth rate, which was itself lower than the growth rate recorded the year before. By comparison, Vietnam’s expected GDP growth rate for 2026 is about 10%. This contrast also points to a widening gap between Vietnam’s higher per capita GDP and the Philippines’ lower per capita GDP.

At the same time, inflation in the Philippines is high, at 7.2%, according to a recent report. Low economic growth and high inflation may appear contradictory, but they can occur together. This condition is known as stagflation, although I would rather describe it as a double whammy to emphasize its impact.

Foreign direct investment (FDI), which supports employment and economic growth, is also significantly lacking. The Bangko Sentral ng Pilipinas (BSP) reported that Philippine FDI was about $8 billion in 2025. According to comparisons with certain ASEAN countries in the UNCTAD Investment Report 2026, the Philippine amount was $7.4 billion lower than Malaysia’s, $12.4 billion lower than Vietnam’s, and $13.4 billion lower than Indonesia’s. This does not include a similar comparison with Singapore, whose FDI was much higher. On a per capita basis, the Philippines’ low level of FDI is even more striking.

The peso’s exchange rate against foreign currencies, particularly the US dollar, continues to weaken. This adds to the cost of local production and, consequently, to inflation.

Another major driver of economic growth is adequate and efficient infrastructure. The most important categories include transportation, information technology and communications, power, and agriculture. The country’s infrastructure is generally considered inadequate, and many structures are in less than good condition.

Transportation illustrates the problem. This sector has not received the attention it deserves. The Philippines is a country of many islands, and its geography is discontinuous in many areas. That increases the cost of transporting people and goods and makes Philippine products less competitive in global markets. To reduce this disadvantage substantially, the country should have prioritized connecting its islands as extensively as possible. Unfortunately, it did not. Going forward, more bridges, undersea tunnels where feasible, ports, and ferries will be needed to connect the islands.

Land transportation has also been neglected. I remember traveling by railroad from Manila to La Union and from Manila to Legazpi in the 1950s and ’60s. That railroad system was neglected and eventually abandoned. I also recall that Panay once had a railroad, which was likewise abandoned. Now that railways are being rebuilt in Luzon, there should also be an urgent effort to build railroad systems on the other major islands, particularly Mindanao, to help the national and local economies grow faster. One significant factor in China’s rapid economic development has been its continued construction of tens of thousands of miles of railroads. The Philippines should learn from China’s experience.

The country has only one long road system, the Pan-Philippine Highway, which runs from North Luzon to North Mindanao and was completed in the late 1970s or early 1980s. Some months ago, I saw a picture of a section of the highway with houses densely built on both sides. Many other sections may be in a similar condition, meaning vehicles can no longer travel quickly. The old road may need to be replaced, or many sections may need to be relocated. The entire system may also need to be widened and fenced to provide much faster travel.

More broadly, if the Philippines wants to reach a higher level of economic development, particularly in the countryside, it must focus on developing fast and reliable road systems on at least the major islands. This should include some form of circumferential coastal road connecting to the major towns.

In information technology and communications, private businesses in the major cities are considered to be using state-of-the-art applications at a level comparable to those of peer countries. What is lacking is sufficient expansion of communications connectivity into the countryside. That effort will require public funding because private businesses will expand only as far as profitability permits. Government subsidies therefore cannot be avoided.

The use of modern technology in education and in local government units (LGUs) is also below par. In the public school system, a computer is generally not provided for each student. This situation must improve if the country is to produce better-educated young people, who are a major driver of economic growth. The same applies to LGUs, which need technology to provide efficient and prompt services to citizens and private businesses and thereby raise national productivity.

The cost of power for industrial and commercial use, as well as for residential consumption, remains very high compared with that of the Philippines’ ASEAN neighbors, except Singapore, where the rate is slightly higher. Because power use is a significant factor in economic activity, the high cost of electricity raises the cost of doing business and makes Philippine products less competitive. It also increases the cost of living for Filipino citizens, both through their own electricity consumption and through the goods they purchase.

Rice production presents another concern. Based on Philippine Statistics Authority data, domestic production is significantly insufficient. In 2025, the Philippines imported rice equivalent to 21.9% of its food requirements, or 3.39 million metric tons. That quantity feeds tens of millions of Filipinos each year. The country is therefore always vulnerable to a lack of, or inadequate access to, foreign rice supplies.

Social conditions

The poverty rate remains high at 15.5% in 2023, according to the Philippine Statistics Authority. This is equivalent to one in six Filipinos living in very poor conditions. Based on the 2026 SWS survey, 22.6% of Filipinos, or one in five, experience involuntary hunger.

Child stunting also remains high, at 23.6% in 2023, according to a UNICEF/Philippine Institute for Development Studies report. This condition has serious future consequences for affected children. They may experience difficulty learning and lower work productivity, and in many cases may become a burden on society rather than contributors to the improvement of general welfare.

The education system continues to perform poorly, as shown by the results of the Programme for International Student Assessment (PISA), an international assessment of 15-year-old students’ knowledge and skills in reading, mathematics, and science. Averaging the rankings in the three subjects, Philippine students ranked 78th out of 78 countries in the 2018 assessment and 77th out of 81 countries in the 2023 assessment.

These results are not only disgraceful and humiliating; more distressingly, they point to the continuing low productivity of Filipino labor. In the long term, they also indicate a general inability among Filipinos to use knowledge for scientific, technological, and similar developments.

Other factors also contribute to the country’s poor condition, including the massive corruption recently discovered among a considerable number of members of Congress and, as this particular instance demonstrates, the slow administration of justice. I will not add these other factors to the picture because what has already been presented is sufficiently clear.

Political conditions

All these conditions are interrelated. The country needs to identify and activate the few levers that can produce the broadest and most effective favorable responses. It would be nonsensical to consider each negative condition separately while failing to give sufficient attention to the relationships among them.

However, this kind of high-level coordination can be carried out only by a great leader—someone who understands the problems thoroughly, knows the solutions, and possesses the will, courage, determination, and strength of character to implement those solutions efficiently and effectively.

In my opinion, the existing electoral process cannot produce such a leader. The current process is controlled by political dynasties seeking power and wealth. These dynasties keep most voters under their control through the extraordinary amounts of money they extract from government finances by various means. When a political dynasty pools the gains obtained by its elected members, it creates a formidable instrument for remaining in power.

Worse, political dynasties do not operate in isolation. They combine or coordinate with other dynasties and form powerful political cartels. As a result, presidential and vice-presidential elections usually become contests between two political cartels, sweeping aside independent candidates who seek to do good.

A political cartel can use its power in other ways. I anticipate that such power may be used in connection with an important political process now taking place in the country: the Senate trial of the Vice President of the Philippines, who was impeached by the House of Representatives. The use of that power could shift the trial’s outcome from what is expected to what is unexpected. The country would then lose a major opportunity to begin putting things right.

The Philippines has placed itself in a state of forlorn hope—a desperate or extremely difficult situation.

If the desperately needed change cannot be achieved through the existing electoral process, something else must be done. If that also proves impossible, the only remaining option would be to sit and wait for the arrival of a deus ex machina: a person or thing that appears suddenly and unexpectedly to provide a solution to an apparently insoluble difficulty.

It will be a long wait. Indeed!

Benjamin R. Punongbayan is the founder of Punongbayan & Araullo. He was born and raised in Tondo, Manila, and attended Tondo Elementary School (now Magat Salamat) and Torres High School.

ben.punongbayan@ph.gt.com