As the Philippines conducts its midterm election this 2025, the study is particularly relevant in providing empirical insights into the extent to which election-driven activities stimulate the economy. While election-related government spending may create short-term growth, concerns remain about inflationary pressures, fiscal sustainability, and economic volatility post-election. Moreover, investor sentiment (both domestic and foreign) can be swayed by electoral uncertainty, impacting capital inflows and business decisions.
This study contributes to policy by analyzing the transmission of election shocks using a macroeconometric framework (Debuque-Gonzales and Corpus 2022). By providing a structured analysis, it informs decisions for policymakers, economists, and business leaders navigating election-year economic shifts, including short-term boosts and potential long-term distortions. These stakeholders would have more empirical basis for policy design that would mitigate economic risks while leveraging potential benefits.