Philippines 2026 State of the Nation Address: Summary and outlook

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Marcos lauded his administration’s accomplishments in the fight against corruption and brought forth promises and new commitments to ease and improve the lives of their citizens particularly through new tax and energy policies.

Economic growth

The Philippine economy grew by 2.3 % in the second quarter of 2026 according to the Philippine Statistics Authority, down from 2.8 % in the in the first quarter.

The conflict in the Middle East was one of the main factors in the country’s meager growth due to hiking oil prices. This led to an average inflation of 4.8 % in the first half of 2026, and peaked at 7.2 % in April.

Another major source in the economy’s growth decline is the 9.2 % contraction in investment in construction, equipment, and inventories. Construction and public construction fell by 13.9 % and 32.4 %, respectively.

The main bright spots of the economy were the growth of exports, services, and agriculture which grew 12.2 %, by 4.5 %, and 2.7 %, respectively. The growth in exports contributed to 3.2 percentage points to GDP growth.

The annual grow target is still maintained at 3.5 % to 4.5 %.
However, it remains to be seen whether it can be met.

Tax and energy reforms

Marcos proposed and called on Congress to bring multiple tax relief measures to generate growth, revenue and “advance equity toward socio-economic sustainability.” The biggest of which is expanding the income tax exemption for workers earning P350,000 or less a year.

Furthermore, Marcos aimed to help small businesses through these tax relief measures by promising that they no longer be subject to the minimum corporate tax noting that this measure will “ensure the continued progress of the middle class amidst the lingering effects of the [Middle East] crisis.”

Marcos also called for better sustainability by asking Congress to help pass the “Sariling Kuryente Act” to promote and make the installation of solar panels and battery systems simpler and more affordable.

Additionally, the President bared plans to further explore nuclear energy development for better energy security and reduce costs while ensuring safety in its implementation.

Reducing oil prices

Amidst the conflict in the Middle East, Marcos directly addressed its impact on fuel prices surging in 2026 where he claimed the government’s initiatives “did everything possible” to lower or stem the rise of fuel prices.

The administration purchased and imported oil from various countries and was aided by the cooperation of oil companies to ensure oil price hikes were gradual.

The Marcos administration also set a series of large price rollbacks and the suspended excise taxes on LPG and kerosene for three months.

Fighting corruption

The most anticipated part of Marcos’ SONA were the updates on the exposed corruption in the flood control projects mentioned in last year’s speech. The president highlighted the government’s actions in addressing the situation by levying charges and incarcerating contractors, high-ranking officials in the Department of Public Works and Highways as well as lawmakers. This had led to nearly P25 billion in funds and assets from the accused being recovered, frozen, and preserved with P800 million already returned to the Bureau of Treasury.

10th Anniversary of Arbitral Ruling

The President celebrated the 10^th anniversary and recognized the importance of the 2016 Arbitral Award which he described as the definitive benchmark in the interpretation and application of the United Nations Convention on the Law of the Sea.

Marcos stated the government’s commitment to doing all that is necessary to assert the arbitral award by using all peaceful and legal measures available to the country to defend against any attempt to undermine the 2016 achievement.

Infrastructure plans

President Marcos briefly hailed the economic benefits of the controversial Pax Silica to the country’s technological evolution as it positions the country to venture into the global value-chain where the 1,620-hectare site in New Clark City in Capas, Tarlac will become a hub of “advanced manufacturing and logistics center in the global AI and technology value chain.”

In terms of transportation, Marcos promised the North-South Commuter Railway and Metro Rail Transit Line 7 (MRT-7) will commence operations by 2027. He also brought forth the administration’s goal of having half of cars on the country’s roads be electric vehicles (EVs) by 2040 through modernization efforts and integrate EVs into the vehicular fleets of offices.

The president also promised to construct disaster-resilient “Ligtas Pinoy Centers” to withstand increasingly severe natural disasters in frequently battered areas such as Bicol, Eastern Samar, Bukidnon, and Davao de Oro. These facilities, according to Marcos, are designed to withstand super typhoons with winds up to 340 km/h and magnitude 8.4 earthquakes.

Furthermore, Marcos called for amending the National Building Code to bring construction standards in line with modern requirements.

Lastly, Marcos proposed to amend the 25-year-old Ecological Solid Waste Management Act by aligning it with modern waste management practices like waste-to-energy and waste treatment technology.

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