PHILIPPINE President Ferdinand Marcos Jr faces a critical test of his leadership as he delivers his annual State of the Nation address, with voters demanding concrete action on corruption, economic pressures and stalled infrastructure projects that have eroded confidence in his administration.
A year after shocking the nation by revealing billions of dollars in alleged graft linked to flood-control schemes, Marcos is under pressure to demonstrate that his anti-corruption campaign has delivered results rather than contributed to an economic slowdown.
The revelations triggered delays in infrastructure projects and prompted consumers and businesses to cut spending, weighing on economic activity.
Bloomberg reported today that the president, who has positioned himself as a reformer fighting corruption despite the legacy of his late father Ferdinand Marcos Sr, a former dictator accused of accumulating billions of dollars in ill-gotten wealth, now faces criticism that little progress has been made in prosecuting those responsible.
"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 Ateneo de Manila University.
The president needs "more explicit, decisive action and greater visibility", Juliano said.
With only two years remaining in his presidency, Marcos is also navigating deep political divisions, including a public feud with Vice-President Sara Duterte, who is facing Senate proceedings over allegations of graft and threats against Marcos. Duterte has denied wrongdoing, and an acquittal could strengthen her position ahead of the 2028 presidential election.
"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," he added.
Marcos has said his address will highlight the effectiveness of his government's policies and the measures taken to navigate economic challenges.
"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.
Analysts expect the speech to focus heavily on economic recovery, the rising cost of living, infrastructure reforms and efforts to ensure those accused of corruption face justice.
A senator and a former public works secretary are among those linked to investigations into the flood-control schemes.
Public confidence in Marcos has fallen to record lows despite government efforts to shield consumers from the effects of higher energy prices linked to the Iran conflict.
Communities vulnerable to severe flooding remain particularly frustrated over delays in completing protective infrastructure.
In Calumpit, about 50km from Manila, a damaged dike remains unrepaired while a flood-control sheet pile project has barely progressed, according to 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 are also seeking clearer policies to restore economic momentum, after the Philippines' 2026 growth forecast was downgraded to 3.5 to 4.5 per cent in June from expectations of as high as six per cent before the escalation of conflict in the Middle East.
"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.
"We must fight corruption decisively, but we should not let the fight against corruption become a brake on economic growth."
Financial markets have reflected growing concerns over the outlook. The benchmark stock index has fallen 1.5 per cent since Marcos's 2025 State of the Nation address, while the peso has weakened nearly eight per cent against the US dollar.
Economic growth also slowed sharply, from 5.5 per cent in the quarter before last year's address to 2.8 per cent in the first three months of 2026, trailing regional neighbours including Malaysia and Singapore.
Radhika Rao, senior economist at DBS Bank in Singapore, said the Philippines needed to strengthen industries and deepen integration into global supply chains, noting that the country accounted for less than five per cent of investment flows into Southeast Asia last year.
"Addressing domestic governance and project execution priorities will improve the investment climate," Rao said.
Cristina Ulang, head of research at First Metro Investment, said investors were looking for clear reforms and stronger fiscal measures.
"Investors are highly sensitive to how the administration will deploy fiscal stimulus," she said. "We have to generate growth."
The economic challenges have been compounded by the conflict involving Iran, with the Philippines relying on the Middle East for more than 90 per cent of its oil imports.
"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.
The July 27 address will also take place amid heightened security concerns, coinciding with the anniversary celebrations of Iglesia ni Cristo, the influential religious group whose recent anti-Marcos protests disrupted parts of Manila.
Hundreds of thousands of members are expected to gather, while more than 21,000 police personnel will be deployed around the capital.
Protests are also planned outside Congress, including by marginalised-sector 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," said Aaron Pedrosa, secretary-general of Sanlakas.
"This government is weighing down the poor." - July 27, 2026
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