PHL must strengthen Judiciary or risk losing reform gains, lawyer says

By Chloe Mari A. Hufana, Reporter

THE PHILIPPINES risks squandering the economic gains promised by recent tax and governance reforms unless it strengthens judicial credibility and modernizes regulatory frameworks, according to one of the country’s top lawyers, underscoring the growing importance of legal certainty amid corruption probes and policy noise.

Nilo T. Divina, founder and managing partner of Divina Law, said the country’s competitiveness hinges not only on recent legal reforms but also on whether courts and enforcement agencies can ensure accountability in high-profile investigations such as the alleged flood control scam.

“Without a [dependable], effective judiciary, these reforms mean nothing,” he told the BusinessWorld Forecast 2026’s Fireside Chat in Taguig City on Tuesday.

The climate-vulnerable country has been probing a massive graft scandal involving flood mitigation projects since July, which has dampened its third-quarter growth report and negatively impacted its local currency and stock market.

Mr. Divina noted that recent moves by the Ombudsman to fast-track cases send “confidence not just in the market but to every Filipino,” but cautioned against announcements that may prematurely signal outcomes.

Despite political controversies and governance challenges, Mr. Divina said the Philippines could still see an economic rebound provided policymakers, businesses and the legal community stay aligned on transparency and the rule of law.

“We’re a good country; we’re good people,” he said. “If we’re together, we are in for a rebound, a recovery. We deserve it.”

REFORM CREDIBILITY
Ensuring due process and consistent prosecution will help anchor investor sentiment at a time when transparency issues threaten to overshadow reform gains, he said.

Mr. Divina added clearer enforcement mechanisms have become as important to foreign investors as tax incentives, especially as the Philippines competes with neighbors offering faster dispute resolution and predictable regulation.

Among the tax measures passed during the Marcos administration was the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE), meant to attract high‑impact investments, spur growth of existing businesses and draw in new ones. The current public works scandal has, however, dampened the possible economic gains from recent legal reforms, including CREATE MORE.

To strengthen reform credibility, Mr. Divina urged the government to accelerate digitalization, which he said would reduce bureaucratic discretion and shrink opportunities for graft.

He also called for greater public disclosure of how funds are allocated and spent, arguing that transparency and oversight could ease long-standing concerns about leakages in infrastructure programs — a key plank of the Marcos administration’s growth strategy.

Looking ahead, Mr. Divina said the Philippines must update outdated laws to keep pace with global economic trends, particularly in digital commerce and artificial intelligence.

He also pushed for modernization of the Data Privacy Act to clarify disclosure rules, platform liability and digital commerce standards, saying clearer regulations would help position the Philippines as a “trusted haven” for tech investors.