THE government must accelerate reforms to improve infrastructure spending and ease cost pressures to help improve consumer confidence, following the weak performance of the economy in the first quarter, business groups said.
Management Association of the Philippines President Donald Patrick L. Lim said businesses and households are more cautious now due to higher costs and prevailing uncertainty.
“Many companies are responding by tightening expenses, delaying expansion plans, improving operational efficiency, and becoming more selective in hiring and investments,” he said via Viber.
The economy grew by 2.8% in the first quarter, much weaker than the 5.4% posted a year earlier. This was also weaker than the 3% growth in the fourth quarter of 2025.
Household final consumption expenditure expanded 3%, decelerating from the 5.28% posted a year earlier and 3.8% in the preceding quarter.
Mr. Lim noted that micro, small, and medium enterprises feel under strain from cost pressures.
“The government can help by accelerating infrastructure and public spending, reducing bureaucratic delays, improving the ease of doing business, and giving companies greater flexibility in areas such as hybrid work and digital operations,” he added.
Federation of Philippine Industries Chairman Elizabeth H. Lee said weak growth reflects rising inflation and the slowdown in investment activity due to the Middle East war.
She also cited the need to diversify the energy mix and strengthen industrial policy.
“A more diversified energy base and stronger industrial policy must complement services-led growth,” added Ms. Lee.
Makati Business Club Chairman Edgar O. Chua advocated government reforms that ensure transparency and stability for investors.
“Amid persistent economic pressures such as rising oil prices, global uncertainty, and corruption issues that continue to erode public trust and constrain productive public spending, the country is once again being reminded of the urgent need for reform,” he said in a statement.
“At this stage, restoring business and consumer confidence will be just as important as stimulating growth itself,” Mr. Lim added. — Beatriz Marie D. Cruz
