Economic Planning Secretary Arsenio Balisacan said the Philippine economy is unlikely to slip into contraction this year despite mounting pressures from a fuel crisis, although growth is expected to fall short of earlier government targets.
Speaking at a Senate PROTECT Committee hearing on Monday, Balisacan said the country is not facing a downturn comparable to the pandemic-era recession, provided policymakers respond effectively to emerging risks.
“The good thing is I don’t see that the economy will contract. I don’t think that there’s a possibility—if we play our cards well,” he said.
Balisacan made the remarks in response to committee chair Sen. Sherwin Gatchalian, who asked whether current conditions could surpass the severity of the COVID-19 shock, when the economy shrank by about 9 percent and took years to recover.
Instead, Balisacan said most analysts continue to project economic growth of around 3 to 4 percent for 2026—slower than the government’s initial 5 to 6 percent target, but still indicative of expansion.
He also cautioned against increasing public spending beyond approved levels, warning that weaker growth could already dampen revenues and widen the fiscal deficit.
“As an economist, my preference is that we work within the given appropriations so we don’t put more pressure on the deficit,” he said.
Balisacan emphasized that targeted interventions and prudent spending will be critical to cushioning the impact of rising fuel costs, while preserving fiscal stability.
He added that maintaining discipline is especially important as the government continues to manage elevated debt incurred during the pandemic, even as it supports vulnerable sectors and sustains economic momentum.
