President Ferdinand Marcos Jr.’s economic team is adopting a sober yet aggressive posture on the Philippines' macroeconomic outlook, mobilizing a state-led fiscal catch-up program to counter stalling growth and stubborn inflation.

Budget Secretary Kim Robert de Leon told reporters on the sidelines of the European Union (EU)-Philippines event that the strategy includes accelerated infrastructure outlays and the fast-tracking of private investments after the disappointing start to the year.

De Leon indicated that the Cabinet-level Development Budget Coordination Committee (DBCC) faced a grim reality during its 193rd meeting. The downbeat assessment followed gross domestic product (GDP) and consumer price index data that fell short of the government’s full-year targets.

“We really would like to catch up after the first-quarter growth and the inflation that we’ve had. So we’re trying to really be bullish about it and utilize whatever we can utilize to support the economy,” de Leon said.

Domestic growth stood at 2.8 percent in the first quarter, its weakest performance in five years since the contraction seen during the height of the Covid-19 pandemic. The government is aiming to propel growth by a minimum five percent rate this year.

Inflation has not yet returned to the two to four percent tolerance band since it first breached the ceiling in March. Inflation has so far peaked at a more-than-three-year high of 7.2 percent in April. Price growth moderated in May to 6.8 percent but is still outside the target range.

To address these headwinds, the chair of the economic team noted that the DBCC is currently refining its macroeconomic assumptions, which led to a delay in the usual post-meeting announcement.

“We didn’t make an announcement because we wanted to recalibrate the figures that we saw during the meeting. We’re having another round before we make a final announcement,” he explained.

De Leon stressed that the committee remains sensitive to global developments spilling over into the domestic environment. While the adjustments made remain undisclosed, de Leon said the DBCC is looking at the numbers “very closely” to ensure they are “sound and realistic based on what we’re currently experiencing.”

De Leon said the administration is banking on the implementation of the national budget to serve as an engine for recovery. “We have the budget passed as a tool to pursue growth. So if there is still room within the budget that we can take advantage of, then let’s use all of those,” he said.

He also said the government will tap the available infrastructure budget under the 2026 national budget of ₱6.79 trillion to provide the necessary stimulus. Meanwhile, he noted that the success of the catch-up plan hinges on the ability of government agencies to accelerate their disbursements.

“We saw an uptick in our available releases. So it’s now up to the agencies—they have until June—to actually implement their projects, and hopefully that will contribute to our second-quarter growth,” de Leon said.

He said the government is eyeing an immediate recovery from the first-quarter growth slump. Besides public spending, the administration is also looking at the private sector to carry the load.

“On the part of private sector investments, the government is also facilitating the implementation of the necessary investments, as these impact economic activity in general,” he added.