CenPEG Outlook for 2025 
December 31, 2024

Economic Outlook
 
The Philippine economy is projected to grow by 6.1% in 2025. However, challenges remain: the country is expected to retain its status as the largest global rice importer, reflecting vulnerabilities in domestic agricultural production. Poverty rates are also likely to deepen due to inflationary pressures and uneven economic recovery.

Political Landscape

1. Expanded EDCA Agreements: The Philippines is set to increase the number of Enhanced Defense Cooperation Agreement (EDCA) sites with the United States, reflecting its strategic pivot to strengthen ties with Western allies amidst regional security concerns specifically for aggressive operations on China
   
   
2. BBM-Sara Split Worsens: The political rift between President Ferdinand "Bongbong" Marcos Jr. (BBM) and Vice President Sara Duterte continues to deepen, with implications for national governance. The discord disrupts the administration's policy coherence and hampers legislative initiatives, particularly with the upcoming midterm elections in May 2025, which are expected to serve as a proxy battle between the Marcos and Duterte factions. The political instability arising from this feud poses challenges to effective governance, potentially affecting the administration's ability to address pressing national issues and undermining public confidence in political institutions.
   
   
3. Impeachment Moves Against Sara Duterte:  Efforts in the lower House to impeach Vice President Duterte are expected to intensify, further destabilizing the Duterte faction.
   
   
4. Confidential Funds Controversy: Disputes over the allocation and use of confidential and intelligence funds by government officials remain a flashpoint, with the Marcos and Duterte factions exchanging allegations, while the people continue to suffer with decreased health funding and lowered education budget.
   
   
5. Marcos Dynasty vs. Duterte Dynasty: The rivalry between these two powerful political families continues to shape the national political narrative, potentially affecting alliances ahead of the midterm elections. Political dynasties expand power at the risk of democratic governance.   
   
   
6. Pre-Midterm Realignments: Political parties are likely to realign in preparation for the May 2025 mid-term elections. Loyalties may shift as candidates position themselves for key Senate and House races. Real political parties with clear and tangible platforms remain among the progressive bloc.

Infrastructure and Development

Key projects such as the MRT-7, solar-powered podcars in Isabela, and the nationwide transition to digital television are expected to symbolize modernization efforts, though regional disparities in development remain significant.

Socio-Political Dynamics

The ongoing BBM-Sara split and broader realignments highlight the increasing factionalism within Philippine politics, with potential ripple effects on governance, foreign policy, and economic stability.

Summary

2025 will be a pivotal year for the Philippines as it navigates economic challenges, political realignments, and regional security dynamics. While growth prospects remain robust, domestic political discord and deepening socio-economic issues could hinder progress. ###