The Philippines is betting big on infrastructure to anchor its next phase of economic growth.
Despite global headwinds, Manila’s steady investment in transport, energy, and digital connectivity is reshaping both its fiscal landscape and long-term competitiveness.
Under President Ferdinand Marcos Jr., the government has doubled down on the “Build Better More” programme — the successor to the Duterte administration’s Build, Build, Build initiative — with more than 180 priority projects valued at roughly US$155 billion. These range from expressways and bridges to airports, renewable-energy corridors, and digital infrastructure designed to knit the archipelago’s regions into a single economic network.
A Growth Engine with Fiscal Discipline
Infrastructure has become the cornerstone of the Philippines’ post-pandemic recovery strategy. According to the Department of Budget and Management (DBM), infrastructure outlays reached 5.3 per cent of GDP in 2024, up from 4.8 per cent in 2022, with a target of 6 per cent by 2028. The government plans to maintain this momentum while gradually narrowing the fiscal deficit from 6.1 per cent of GDP in 2024 to 3 per cent by 2028.
Finance Secretary Ralph Recto has emphasised that the administration’s goal is “growth with discipline” — sustaining capital formation without compromising debt sustainability. As of mid-2025, the country’s debt-to-GDP ratio stands at 60.3 per cent, broadly stable and within the bounds considered prudent by the International Monetary Fund (IMF) for emerging economies.
Leveraging Public-Private Partnerships
Manila’s fiscal consolidation plan relies heavily on private participation. The Public-Private Partnership (PPP) Code, enacted in 2023, has streamlined procedures for project approval and funding. This framework allows private consortia to co-finance major developments such as the North–South Commuter Railway, the New Manila International Airport, and the Mindanao broadband network.
The National Economic and Development Authority (NEDA) reports that PPP approvals in the first half of 2025 exceeded ₱400 billion (around US$7 billion), signalling renewed investor confidence. International financiers — notably the Asian Development Bank (ADB) and Japan’s JICA — have also deepened their support, providing concessional loans and technical assistance.
Private-sector engagement is particularly visible in renewable energy, where reforms under the amended Renewable Energy Act have opened full foreign ownership of solar, wind, and hydro projects. The measure has drawn strong interest from investors in Europe and Japan, positioning the Philippines as a regional hub for clean-energy production.
Managing Inflation and Financing Costs
The Bangko Sentral ng Pilipinas (BSP) has maintained its benchmark rate at 6.5 per cent to curb inflation, which eased to 3.8 per cent in September 2025 after peaking at 8.7 per cent in 2023. High interest rates have increased borrowing costs, but fiscal authorities argue that infrastructure investments deliver long-term productivity gains that offset short-term financing pressure.
To manage risks, the Treasury has extended average debt maturities and increased the share of local-currency borrowing, insulating the budget from external volatility. The successful issuance of a ₱585 billion green bond programme in early 2025 — oversubscribed by global investors — underscores international confidence in the country’s fiscal trajectory.
Connecting Growth and Inclusion
Beyond the macroeconomic numbers, infrastructure spending is reshaping daily life. New transport corridors are cutting travel times between Manila and provincial centres, while expanded ports and logistics hubs are boosting exports of manufactured goods and agricultural produce.
The government’s emphasis on rural roads, irrigation, and digital infrastructure also reflects a broader ambition: to bridge the development gap between urban and rural economies. The World Bank estimates that improved connectivity could lift annual GDP growth by up to 1.5 percentage points by enhancing labour mobility and reducing logistics costs.
Steady Momentum Ahead
The Philippines enters the second half of the decade with a rare combination of fiscal realism and developmental ambition. Infrastructure remains the visible expression of both — a tool for job creation, private investment, and long-term competitiveness.
If Manila sustains policy continuity, maintains transparency in project implementation, and keeps debt on a sustainable path, the country could turn its infrastructure drive into a durable fiscal anchor. For investors and citizens alike, that would mark the real success of the Build Better More era.
