Broad strokes for the future
Criticized during the campaign for his lack of an economic platform, President Ferdinand Marcos Jr. last week promised to provide a more detailed outline of what he intends to do in the next six years to resuscitate the economy and uplift the lives of Filipinos now suffering from the impact of a prolonged pandemic and surging fuel prices due to the Russia-Ukraine war.
“We are presently drawing up a comprehensive, all-inclusive plan for economic transformation,” he said. Recovering from the pandemic is first on Marcos Jr.’s agenda, though he admitted that the initial months of his administration will be “rough.” Under his presidency, Marcos Jr. highlighted that food sufficiency will get preferential treatment, elating various agricultural groups that had criticized the import policy of the previous administration. This will, of course, take time since the problems besetting agriculture require programs and projects that will take years to bear fruit and boost production to eventually bring down prices. In fact, imports had to be resorted to in the past few years following shortages in rice and meat supply, causing prices to go up.
Marcos Jr. also cited the problem of skyrocketing fuel prices, hinting at boosting the country’s energy supply by tapping alternative energy reserves. “We are not far from oil and gas reserves that have already been developed,” he noted.
This is another tricky issue because China claims the area where these reserves are, in the West Philippine Sea off Palawan. The previous administration had tried, but failed, to reach a joint exploration and development agreement with China, and said it will be up to the Marcos Jr. administration if it wants to revive such a plan. Nuclear, another option hinted at by Marcos Jr. during the campaign, is also facing stiff opposition mainly due to safety concerns insofar as reviving the mothballed Bataan nuclear power facility is concerned.
A bright spot in what Marcos Jr. promised during his inaugural speech is his pledge to present a comprehensive infrastructure plan, which he hopes to accomplish in six years, and a promise to complete the unfinished projects of the Duterte administration. The pandemic nearly halted the ambitious “Build, build, build” infrastructure program of the Duterte regime, and to address the government’s lack of funds as the new administration ramps up public works spending, Marcos Jr. can revive the public-private partnership to be able to tap private capital to build much-needed airports, seaports, hospitals, roads, and schools.
Marcos Jr. also expressed interest in focusing on helping the tourism industry recover. While he did not expound on this, tourism is, just like agriculture, considered a low-hanging fruit that can immediately be propped up with the least investment cost and at the shortest possible time. This, plus an agricultural revival, can help address poverty by generating jobs.
The President’s chief economic manager, Finance Secretary Benjamin Diokno, expounded on the key economic goals of the new administration in the next six years, saying that by the end of their term in 2028, the Philippines will be an upper middle-income country with a single-digit poverty rate and a smaller budget deficit similar to pre-pandemic levels. He described these as the “three overarching goals that we hope to achieve.”
It is good that the Marcos Jr. administration will zero in on poverty. The Duterte administration had targeted to reduce the poverty incidence to 14 percent this year and was actually on track as it managed to bring it down to 16.7 percent in 2018 from 23.5 percent in 2015, until the COVID-19 pandemic struck in early 2020. The poverty incidence rose to 23.7 percent in the first half of 2021 as the necessary quarantine and health measures imposed by the government during the pandemic slowed down economic activity. Diokno said they intend to bring poverty incidence down to single-digit by 2028 “by pursuing a strong broad-based growth for the next six years.”
As Diokno and the President had shunned new or higher taxes early in their term, the finance chief said they will be banking on sustaining economic growth in their bid to repay ballooning debts and narrow the budget deficit. “Grow the economy and almost everything else will follow. It will help reduce the deficit, so we don’t have to borrow as much. A growing economy also means more taxes and revenues,” Diokno said.
But these are all broad strokes for a glimpse of what lies ahead. The road map for the difficult task of fulfilling his promise of “building back better” from the crippling effects of the COVID-19 pandemic and the energy crisis is expected to be unveiled in his first State of the Nation Address (Sona) when the 19th Congress opens on July 25. Likewise, the detailed plans and programs to be contained in what Diokno calls the six-year fiscal consolidation framework will be included in the Sona. The nation awaits what this new administration has to offer.
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