Marcos bets on SONA to revive Philippines economy and political capital

MANILA — Philippine President Ferdinand Marcos Jr delivers his State of the Nation Address (SONA) on July 27, a year after his 2025 speech shocked the nation with revelations of billions of dollars in graft involving flood-control schemes. The disclosure triggered an economic slump as projects slowed and consumers and businesses cut spending. Now, with just two years left in his term, Marcos needs this SONA to revive growth, his ratings and his presidency.

The self-proclaimed graft-buster, whose late father was a dictator famous for amassing ill-gotten wealth, faces a public that says he has done little to clean up the corruption he revealed. “Marcos Jr remains haunted by the lack of progress and accountability on the flood-control scandal, inflation impacts and people's still-vulnerable economic power,” said Hansley Juliano, a political science instructor at the Ateneo de Manila University. The president needs “more explicit, decisive action and greater visibility,” he said.

Political fractures and governance challenges

The 68-year-old president has been feuding with vice-president Sara Duterte, who is on trial in the Senate for allegations of graft and threatening to kill Marcos. She denies wrongdoing, and an acquittal could leave her as the frontrunner in 2028 elections. “The administration is currently mired in multiple political battles,” said Rodel Taton, dean of the San Sebastian College-Recoletos Graduate School of Law. “These internal fractures have strained the cohesion of the ruling coalition, with even the President's sister, Senator Imee Marcos, frequently distancing herself from his policies.”

Marcos said his speech would show that his policies have been effective. “I will make sure that people know all of the things that we have done to navigate this very difficult period in our history, where we are buffeted by all of these external forces,” he told reporters on July 24.

Economic headwinds and investor sentiment

Analysts expect a focus on the economy and cost of living, along with efforts to fix anomalies in infrastructure spending and putting the guilty in jail. A senator and a former public works secretary are among those accused in connection with the graft schemes. The public's trust in Marcos is at a record low despite efforts to cushion consumers from the impact of the Iran war. Those most vulnerable to typhoons are angry about the flood-control graft and want projects fast-tracked.

A broken dike still stands in a village in Calumpit, 50km from Manila, and a sheet pile to address flooding has barely started, said local official Sergio Miranda. “At the rate it's going, our bodies will become immune to floodwaters before this project is finished,” Miranda said.

Investors want clarity on plans to revive the economy, with the 2026 growth forecast having been slashed to 3.5-4.5 per cent in June, from as much as 6 per cent before the Middle East conflict. “The country is tired of politics. Filipinos are feeling the pressure of high living costs, businesses are facing uncertainty,” the Management Association of the Philippines said in a statement. “We must fight corruption decisively, but we should not let the fight against corruption become a brake on economic growth.”

The benchmark stock index has fallen 1.5 per cent since Marcos's July 28, 2025 SONA, while the peso has slumped almost 8 per cent against the dollar. In the quarter before that speech, the economy expanded 5.5 per cent, only to slump to 2.8 per cent growth in the first three months of 2026 — trailing neighbours from Malaysia to Singapore.

Structural reforms needed to attract investment

For Radhika Rao, a senior economist at DBS Bank in Singapore, the Philippines needs to boost industries and integrate into global supply chains, noting that the nation accounted for less than 5 per cent of investment flows to Southeast Asia last year. “Addressing domestic governance and project execution priorities will improve the investment climate,” Rao said.

Markets want concrete reforms, said Cristina Ulang, head of research at First Metro Investment. “Investors are highly sensitive to how the administration will deploy fiscal stimulus,” she said. “We have to generate growth.” The US war on Iran has not helped, as the Southeast Asian nation sources more than 90 per cent of its oil requirements from the Middle East.

“I'd like to hear how the president plans to address the impact of high oil prices to the economy, how he plans to control inflation on a more permanent basis, and how he will attract more investments,” said April Lynn Tan, chief equity strategist at COL Financial Group.

Security and protest backdrop

The July 27 address coincides with the anniversary of the founding of Iglesia ni Cristo, the religious group whose recent anti-Marcos protests disrupted the capital. Hundreds of thousands of members are expected to gather. The church's headquarters is a few kilometres from where the President will deliver his speech, and more than 21,000 police personnel will be deployed on July 27.

There will also be protesters outside Congress, including Aaron Pedrosa, secretary-general of Sanlakas, which represents marginalised groups. “Contrary to the rosy picture being painted by the Marcos administration, the masses, workers, farmers and all basic sectors are more impoverished, more disempowered, more disenfranchised,” Pedrosa said. “This government is weighing down the poor.”

FAQ: What to watch in Marcos's SONA

Will Marcos announce new anti-corruption measures?

Analysts expect the president to outline steps to fix anomalies in infrastructure spending and prosecute those involved in the flood-control graft scandal. However, concrete action remains the key demand from investors and the public.

How can the Philippines attract more foreign investment?

Economists say the Philippines must improve governance, project execution, and integration into global supply chains. The country accounted for less than 5 per cent of investment flows to Southeast Asia last year, far behind neighbours like Singapore and Vietnam.

What is the impact of the Iran war on the Philippine economy?

The Philippines sources more than 90 per cent of its oil from the Middle East, making it highly vulnerable to oil price spikes from the Iran conflict. This has contributed to inflation and forced a sharp downward revision of the 2026 growth forecast.