MANILA, Philippines — Economic achievements took the limelight in President Ferdinand Marcos Jr’s second national address, highlighting how the country beat back recovery woes but missed the mark on key economic issues.
Marcos Jr. devoted a chunk of his second address on Monday to hammering home these achievements, ranging from “stellar” economic growth, and agricultural production, to infrastructure projects.
“On matters of the economy, there are many things over which we have no control. But over those where we do have control, we are doing everything we can,” Marcos Jr. said.
Since scoring a landslide victory at the May 2022 polls, Marcos presided over a domestic economy that has seen better days. Throughout his first six months in power, the economy that Marcos Jr. inherited witnessed consumer prices skyrocket, the peso dip to historic low, and local pump prices surge.
All these factors, some beyond government control, left the domestic economy in worse shape. Taming rising inflation became a cornerstone of his economic policy, as commodities, such as sugar and onions transformed into a national headache.
On Monday, smugglers and hoarders received the President’s ire as he claimed them culprits for volatile price swings of some agricultural products.
“The days of these smugglers and hoarders are numbered,” he said.
By the time the economy bid farewell to the first half of 2023, economic indicators looked bright partly as a result of easing supply chain bottlenecks, resurgent consumer spending, and higher interest rates injected by the Bangko Sentral ng Pilipinas.
That said, Marcos Jr. used his second SONA to spotlight perennial economic problems that his administration sought to remedy. He reiterated investments in infrastructure projects, revenue generation efforts, and bolstering agricultural production.
The president, who also sat at the helm of the agricultural department, made known his efforts to highlight KADIWA stores and expand the project nationwide. The KADIWA is a pet policy of his late dictator father. The move to condone decades-long debt of farmers made its way into his speech, which Marcos Jr. opined supported his push to boost agricultural production.
Investments in infrastructure figured in his speech, as he reminded the public of his goal to keep public spending between 5-6% of gross domestic product annually.
Even then, the president’s second SONA reiterated that the economy was still on its way to achieving its potential. As it is, the Marcos Jr. administration is keen on seeing the economy become an upper middle-income country by 2025, a point goal broached by the previous Duterte government.
Leonardo Lanzona, an economist at Ateneo De Manila University, criticized the speech’s lack of direction.
“The speech was a collection of motherhood statements. At best, these are programs that the government wishes to accomplish, and no solid achievements were indicated. Also, there are positive statements which are hardly accomplishments,” he said.
Anthony Lawrence Borja, a political science professor at De La Salle University in Manila, said the SONA was meant to appeal to businesses and the private sector to show that “he is upholding the old paradigm of ensuring a business-friendly environment through infrastructure, ease of government transactions, and capacity-building for the labor market.”
“How ordinary citizens would digest the SONA will depend on their struggles to cope with everyday reality (whether they can cope with it or not), and inputs from analysts, pundits, and apologists that they are constantly exposed to. Simply put, resilience and self-reliance are worth it if and only if ordinary citizens will believe that there is some level of progress and recovery,” Borja said.
That said, the president’s speech at Batasang Pambansa on Monday still found ways to create distance from one of his pet policies, the passage of the first-ever sovereign wealth fund.
Where’s Maharlika?
The Maharlika Investment Fund, signed into law days before his second address, made its way into the speech as Marcos Jr. assured that the vehicle will not “add to the debt burden” and will be presided by “a group of internationally recognized economic managers.”
To this end, Borja listed three reasons why the MIF received little space in Marcos’ SONA.
“There are three intertwined reasons for this, first of which is that MIF is an experimental project and as an experimental project it would be better from a marketing perspective to curb expectations in line with the possibility of failure,” he said.
“Second, and tied with curbing expectations by saying less is to focus on re-assuring taxpayers that it will not be mismanaged. In other words, if it fails, then they can easily blame external factors instead. However, if it succeeds, then proper management can be highlighted alongside gains even if those gains might be minimal,” Borja added.
The last reason, as Borja said, was that the government remains on the hunt for investment targets. The MIF’s implementing rules and regulation has yet to be passed, but economic managers assured that this document is near completion.
The Maharlika attracted scorn and controversy at every turn, as civil society lambasted the move to create a wealth fund. Economics professors from the University of the Philippines blasted the MIF in a strongly worded paper in June, saying that it “violates fundamental principles of economics and finance and poses a serious risk to the economy and the public sector.”
A call to action?
Unlike his first SONA, mounted in less than two months since his victory at the polls, he issued a call to Congress and Senate lawmakers to support pieces of legislation towards the end.
READ: Military pension, Department of Water among priority bills in SONA 2023
Sonny Africa, executive director at local nonprofit IBON Foundation, lamented these measures could end up burdening the public.
"The Marcos Jr administration's legislative line up is heavy on burdening poor and middle-class Filipinos with more taxes. The rest is a motley assortment of trivial measures in the government tradition of seeming relevant but not really doing anything to modernize agriculture or build Filipino industry," he said.
"The economy can't be transformed if economic policies aren't transformed -- and a repetitive litany of trivial legislation just won't do it," Africa added.