The Financial Executives Institute of the Philippines (FINEX) has urged the Marcos administration to implement well-targeted public spending to stimulate the economy, warning that “weak governance” further undermines investor confidence in the country.

FINEX, the country’s leading group of financial professionals, urged the government to step up amid the country’s weaker-than-expected economic performance.

“With economic growth slowing and public debt continuing to rise, the Philippines can ill afford inefficient or ineffective public spending,” the group said on Wednesday, Aug. 12.

FINEX issued this statement after the country’s gross domestic product (GDP) grew by only 2.6 percent in the first half, which is well below the government’s revised target of 3.5 percent to 4.5 percent this year.

The group also warned that the country’s fiscal position has become even more constrained, as the government’s debt reached ₱19.07 trillion by the end of June, resulting in a debt-to-GDP ratio of 66 percent.

“Weak governance and inefficient public spending can also erode investor confidence, increase perceptions of sovereign and institutional risk, and ultimately raise the cost of capital for both government and the private sector,” said FINEX.

FINEX said this makes it critical for the government to pursue well-targeted public expenditure to support economic activity, create jobs, and encourage the entry of investments.

However, the group warned that public spending cannot come at the expense of good governance, as it pushed for efficient spending alongside appropriate guardrails.

“It is essential to ensure that every peso borrowed and every peso spent delivers meaningful economic and social returns,” it said.

At a time when several parts of the country are facing severe flooding, FINEX noted that investments in flood control infrastructure can be highly effective when properly planned, transparently procured, and adequately maintained.

FINEX said the issue should not be whether the government should invest in infrastructure, but rather whether these projects are necessary, properly designed, completed to standard, and capable of delivering their intended public benefit.

The group recalled that the flood control scandal last year, which directly hampered government spending and ultimately the country’s economic growth, has emphasized the need to protect public resources from misuse.

“FINEX therefore calls on the appropriate authorities to thoroughly investigate the alleged misuse of public funds in accordance with due process, pursue the recovery of public funds or assets wherever legally warranted, and hold accountable those found responsible,” the group said.

“At the same time, government should continue to invest decisively in high-impact infrastructure and other priority programs under strengthened governance and accountability mechanisms,” it added.

Given the country’s current economic and fiscal conditions, FINEX stressed that accountable public spending is not only a governance imperative but also an economic necessity.