The government’s long-term economic vision remains attainable but requires an immediate pivot in policy execution to avoid falling permanently behind schedule, according to the state-run Philippine Institute for Development Studies (PIDS).

While the goals of AmBisyon Natin 2040—a roadmap to transform the Philippines into a prosperous middle-class society—are still within reach, PIDS senior research fellow John Paolo R. Rivera warned that the window for necessary structural reforms is narrowing.

Speaking at a webinar on macroeconomic prospects on Thursday, Jan. 15, Rivera said that the timeline is technically sufficient only if the government shifts its focus from the speed of growth to the quality and resilience of that expansion.

“We can get there. I am very optimistic we can get there. But we need to do something today,” Rivera said. “The years up to 2040 are technically enough, but only if we shift how it grows, not just how fast it grows.”

The challenge facing the country is no longer a lack of conceptual frameworks but a question of political will. Rivera noted that the government must be prepared to take difficult and potentially unpopular steps to strengthen institutions, discipline public spending, and confront climate risks.

“And under the future’s thinking approach, the future cannot be built by aspirations alone. It can be built by the choices that we make now, given what we know,” he said.

He argued that the foundations for the 2040 goal must be firmly established by 2030, requiring public investment programs that are timely and ready for execution to prevent sudden economic setbacks.

The think tank maintained its gross domestic product growth forecasts (GDP), projecting the economy will expand by five percent in 2025 and 5.3 percent in 2026. These figures align closely with multilateral estimates, including the Asian Development Bank’s five percent projection and the World Bank’s 5.1 percent outlook.

However, Rivera noted that current growth rates remain below pre-pandemic potential and do not yet signal a fundamental economic transformation.

Recurring disruptions throughout 2025 have already weakened momentum. PIDS cited sluggish investment, particularly in public infrastructure, alongside weather-related shocks that continue to batter the agricultural sector and volatile food prices.

Externally, heightened global uncertainty and trade tensions involving higher tariffs have induced caution among private firms.

Rivera cited governance as the primary lever to mitigate these headwinds. Effective administration determines how inflation is managed, how much capital investors are willing to commit, and how resilient the economy remains against exchange rate pressures.

For the current year, Rivera remains cautiously optimistic, expecting improvements in flood control and a reduction in corruption-related bottlenecks during the first half. S

uch progress could restore investor confidence and accelerate growth in the latter half of 2026.

While inflation is expected to remain within the Bangko Sentral ng Pilipinas’ target range of two percent to four percent, PIDS emphasized that price stability alone is insufficient.

The think tank concluded that delays in reform do not preserve future flexibility but instead guarantee higher costs for the next generation of Filipinos.