The new government is still learning its way. Hopefully, as the year progresses, we’ll get a better idea of where President Marcos Jr.’s priorities lie and what his style of management will be. He’s said agriculture is the top priority, as it must be, but he’s started off on the wrong foot by appointing himself secretary. Sooner rather than later, he needs to change that and appoint a permanent head. So, too, with health, it cannot go on headless. It needs strong and inspired leadership now. His new year’s resolutions must include making those two appointments with utmost urgency.
Tourism should be high on the list of sectors to promote since, more than any other sector, it employs the poorly educated of which we have far too many. Workers in the hospitality industry need minimal skills that can be readily learned, and tourism develops in the countryside, where employment is most needed.
At the other end of the scale is IT. This is the world of 2023, and beyond. A hybrid one where the virtual melds with the physical. The Department of Information and Communications Technology assumes a leading role here. As does the Department of Science and Technology and Department of Education who should all work together toward providing highly skilled workers so the Philippines can be a leader in this future world. A place it certainly isn’t now, but could be with inspired leadership.
Mining, I’d put up there, too. The demand for the minerals we have in abundance is accelerating as transport goes electric, and energy shifts to otherwise unreliable power that needs batteries to store the RE power produced. If possible, first-stage processing should be done here. But only if it can be profitable. A mandatory demand or a punitive tax won’t work. Providing the conditions for a profitable business to flourish can.
I’m of two minds about manufacturing. We’re just not competitive in the costs that matter. There may be niche ones where we’ve already proved successful such as electronics, where the Philippines has been quite successful with $58.31 billion in exports this year. These should be encouraged. Elsewhere, best to not waste time.
Whilst we remain outside the Regional Comprehensive Economic Partnership (RCEP) grouping of 14 nations, I don’t see much recovery in foreign direct investment until we join. Foreign investors will put their businesses into the eight billion people market, not a 110 million low-income one. So I’m at a loss as to why the President hasn’t certified this as urgent to get the same rushed attention he created with his introduction of a Maharlika Wealth Fund. Subsequently reoriented as a Maharlika Investment Fund (MIF) after widespread opposition to it from many sectors. He seems determined to have this fund even though we’re not in a position to safely fund it. MIF may be a good idea, but now as we face so many problems, it is not the time to do it. And it needs a far greater investigation into what it should be. There’s certainly no urgency to it. Joining RCEP is far more urgent and important, and would create a far, far greater positive impact on our country, and our people.
What will keep our economy growing are the two stalwarts of the past years: OFW remittances and the BPO industry. Both contribute around $30 billion to our economy. They are expected to continue modest growth, with some risk of losing our seafarers, if Mr. Marcos doesn’t get the educational system in order. He’ll need to exert some forceful leadership on this. Inadequate schools have to be closed.
The President has introduced an eight-point economic plan that no one could object to. But it cries out for definition, and time-bound action. The just-released Philippine Development Plan 2023-2028 should give us the details of what the Marcos Jr. administration intends in the coming years. If Mr. Marcos goes along with his economic team’s recommendations. But worryingly, as I mentioned last week, corruption isn’t mentioned at all.
We’ve had a year of holding it all together, but witnessing little of the dramatic shifts the Philippines really needs to join the first world. I see a country exhibiting modest growth at somewhere around 5 to 6 percent in GDP growth, which puts it up near the top in Asia, but principally because it’s coming from a low base that others had recovered from earlier. Real growth in economic activity will be much less. The forecast assumes that there is no major resurgence of COVID cases via a new strain that could bring back those days of massive restrictions.
2023 is going to be a most unsettled year worldwide, thanks to that madman in the Kremlin and the worrying actions of Xi Jinping. In the Philippines ever so much will depend on how wisely Mr. Marcos leads.
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