Businesses to look for clear economic plans in Marcos' first SONA
MANILA, Philippines — The promise of this new government worries Jampol Catibog, a new business owner.
He just opened his café chock right in the middle of a public market in Rizal back in June, a month after Ferdinand Marcos Jr.’s victory at the presidential polls. Catibog, 33, is convinced that this business venture would keep him financially afloat amid harsh economic conditions.
“I was a former ABS-CBN employee. My income was highly dependent on what the government decided to do or not. That's why I wanted to get as far away from the government as possible. That's why I opened this,” Catibog said. He worked as a director of photography for the beleaguered broadcaster, which lost its franchise from the former Duterte administration.
“My primary concern is inflation. As a business owner, I can't immediately raise prices since I just opened back in June. Raw ingredients like coffee beans rose as much as P50 per kilo. Flour ballooned to P1,000 per kilo from P600,” he added. “Secondly, I want to know if the daily minimum wage will be increased."
Adiel Sam De Jesus owns a business that provides computer learning materials to private schools. Having seen the ups and downs of running a business venture amid a global health crisis, the 26-year-old entrepreneur knows the education sector needs all the help it could muster.
“I've been in the business for quite some time now. It takes time for businesses to feel something enacted into law. If it's going to happen swiftly, then I hope it does,” De Jesus said. His venture grew by a hundredfold before the pandemic but was swallowed by the ensuing economic fallout.
These days, De Jesus pivoted his business to help private schools in Bulacan province navigate a new hybrid education setup and roll out a learning management system.
“To be very honest, I think straightforward I could tell that the private school sector is really suffering for the past two years and will continue to suffer in the next 2-3 years,” he said.
Catibog and De Jesus represent a new breed of entrepreneurs juggling the intersecting roles of nation-building and capitalism after the country elected the son of the deposed dictator. They color the ranks of 99% of firms serving as the backbone of a consumer-dependent economy.
These young upstarts bear the burden of facilitating economic recovery of any shape or form alongside this new government. For the Marcos Jr. administration’s part, they have yet to present to Filipinos a clear-cut plan for the economy.
The new president’s first address to the nation is the next best stage for this, as what Marcos’ predecessor sparingly did in the same platform. But the circumstances now differ but hit a common retort; they both have the responsibility of stewarding the Philippines from pandemic pandemonium to a period of economic prosperity.
Top of mind for experts was addressing red-hot inflation, which national statisticians said have not yet peaked. Inflation in June hit a red-hot 6.1%, a three-year high since the pandemic-induced recession.
“How he plans to tackle elevated inflation and its impact on the common Filipino and the poor—whether it be in the form of targeted subsidies and/or reducing the cost of food products and petroleum through administrative interventions,” said Domini Velasquez, chief economist of China Banking Corp.
“With inflation reducing purchasing power and making the poor feel poorer, we also look forward to the president’s strategies for poverty reduction, particularly on wages and jobs creation,” she added.
For Sonny Africa, executive director of nonprofit IBON Foundation, the new president should reveal his plans to manage economic distress.
“The only way that Pres. Marcos can show that he is serious about relieving the economic distress of millions of Filipino families is with expansionary fiscal policy. This is the fastest and most effective way for the government to make real impact and, measured against this, other policy options will be just shows of taking action” he said in a Viber message.
Food crisis and other problems
To top it off, experts want to see Marcos own up to his promise of rehabilitating local agriculture. Leonardo Lanzona, economist at Ateneo De Manila University, wants to hear his plans for a looming food security crisis.
“I think the key issue is the food. We have been made to accept that the COVID crisis is over but even if infections may have decreased, the economic effects of the pandemic remain. As we plan to place more resources in economic recovery, we may lose sight of the continued problem of food shortage, health and unemployment,” he said.
“If we focus on the economy and place whatever available resources away from food, health and jobs, we shift our production options from these concerns, making whatever goals we have about economic recovery unviable,” Lanzona added.
China Bank’s Velasquez hopes to see concrete plans to boost productivity within subsectors of the economy such as manufacturing, mining, technology, and agriculture in “the short- to medium-term will set the pace for the economy’s trajectory in the next 6 years.”
Experts such as Nicholas Mapa, senior economist of ING Bank in Manila, and April Lee Tan, research head of COL Financial, want to hear Marcos’ plans on macroeconomic issues. This includes higher borrowing costs, elevated debt stock and a large budget deficit.
As it is, the Philippines’ balance sheets face distress after a pandemic response compelled the former Duterte administration to go on a borrowing spree. This pushed the debt stock above levels that global credit watchdogs deem manageable. Likewise, this left little to no fiscal for its spending priorities.
Human capital also made the list as ING’s Mapa underscored the need for a plan to address scarring effects from the pandemic “which hurt SMEs, hindered the educational system and stunted investment momentum.”
Legislative wishlist
In terms of legislative agenda, business groups and foreign chambers bared a list on what the 19th Congress needs to prioritize:
- Liberalization of Foreign Equity Restrictions in the Constitution
- Open Access in Data Transmission
- Ease of Paying Taxes
- Promotion of Digital Payments
- CREATE and PEZA Act Amendments for Hybrid/Flexible Work Schedules
- Freedom of Information
- Property Valuation and Assessment Reform
- Capital Income and Financial Taxes Reform
- Build-Operate-Transfer Law amendments/PPP Act
- Secrecy of Bank Deposits Law amendments
- National Unemployment Insurance
- Department of Disaster Resilience Creation
- E-Commerce Act amendments
- Pandemic Protection Act
- Holiday Rationalization Act
- Philippine Airports Authority Creation
- Philippine Ports Authority (PPA) Charter amendments
- Intellectual Property Code amendments
- Philippine Pension System Portability and Strengthening
- Apprenticeship Program Reform
- Agricultural Lands Ownership Easing
- Commonwealth Act 138 (Flag Act) Repeal
- International Maritime Trade Competitiveness Act
- Satellite-based Technologies Promotion Act
This list was penned by the American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, IT and Business Process Association of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Inc., Korean Chamber of Commerce of the Philippines, Inc., Makati Business Club, Management Association of the Philippines, Philippine Association of Multinational Companies Regional Headquarters, Inc., and Semiconductor and Electronics Industries in the Philippines Foundation, Inc.
For what it’s worth, economic insecurities are a top concern for Filipinos these days. And De Jesus, the business owner from Bulacan, has a simple plea to the new president.
“I think I’ll just tell him that my particular sector needs help… Talk to people in the sector, how they were affected by the pandemic, how we’re transitioning post-pandemic,” he said. “Listen to them how hard it is for them to recover.”
Catibog, the coffee shop owner, hoped anything worthwhile would come out from the new administration.
“I don’t want you and the Philippines to fail. Help will come if needed. I pray that they will run the government properly, that management of this new administration will be good,” Catibog said.
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