Amid increasing global headwinds and unprecedented challenges to the Philippine economy, Finance Secretary Benjamin Diokno, the head of President Marcos Jr.’s economic team, seems to me, to be under siege.
There is loose talk, in viber and online media, Ben would be replaced, by Ralph Recto, the current deputy House speaker. Ralph, 59, who is a friend, is known for three things: competence, compassion and hard work. He did well as economic planning secretary, for a year, 2008-2009, under president Gloria Macapagal-Arroyo, before he ran for senator and won.
President Marcos Jr. should, however, be fair to Ben Diokno, 75, a Batangueño, like Ralph. He is a good man and has rendered distinguished public service in 40 years under four presidents. He should be told whether he is coming or going.
In the meantime, DOF chief Ben remains optimistic about the Philippine economy’s bright prospects. His optimism is shared by global experts.
The International Monetary Fund, the World Bank, the Asian Development Bank and AMRO+3 – all are unanimous that the Philippines will grow the fastest among its ASEAN+6 peers this year and in 2024.
“We are on track with our goals in the medium-term expenditure framework (MTEF),” says Diokno. “And in a sea of downgrades globally, the Philippines continues to maintain its investment grade credit ratings.”
Reports Diokno: “The economy will grow by around 6 percent this year, 6.5 percent next year. Inflation will settle within the target range of 2-4 percent next year. We will reach upper middle income status in 2025.”
The budget deficit to GDP ratio will be below target in the Medium Term Expenditure Framework, Diokno concedes. Gross international reserves will settle in the neighborhood of $100 billion or 7-8 months of imports and payments; the perceived doctrine is that three months’ worth of imports and payments are enough.
The DOF chief says the banking system is adequately financed. “In past crises, the banking system was part of the problem; now it is a source of strength.”
Inflation averaged 6.6 percent in the first nine months of 2023 and has refused to go below that. As a result, the Bangko Sentral ng Pilipinas has raised its policy rate to 6.50 percent effective Oct. 27, 2023 and indicated further tightening can be expected until inflation is tamed. In any case, the policy rate has room until 6.75 percent before it harms the economy badly.
And thanks to government underspending, the economy grew just 5.3 percent in the first half, below the 6-7 percent low-end target. To achieve the 6 percent target for the whole 2023, GDP must grow at least 6.6 percent in the second half, a tough act, given recent developments.
Diokno is optimistic, with come-from-behind gains. The economy, after all, is fueled largely by consumption, which is 84 percent of GDP. Private consumption remains unrelenting.
A pro-people, reform-minded public servant, Diokno has done more good to economy and the Filipino people than any official before him has had. For BBM, he has set ambitious and daring goals for the economy. He is determined to achieve them during Marcos Jr.’s remaining five years.
In the meantime, Diokno has been aggressively promoting the Philippines as the most attractive investment destination in Asia today. He expects annual foreign direct investments averaging $12 billion beginning 2024.
As BSP governor from March 4, 2019 to June 30, 2022, Diokno pumped into the economy P2.3 trillion of liquidity at the height of the worst pandemic of the century.
He put cash in the hands of cash-strapped consumers hit by COVID and invigorated the banking system. He also lent more than P470 billion to the national government for COVID support funds.
At BSP, he pushed financial inclusion through digitalization. This 2023, half of retail transactions must be digital (from 20 percent in 2020) and 70 percent of Filipinos must have a bank account, from 56 percent in 2021.
As BSP governor, Diokno was the Best Central Bank governor – in Asia and in the world, a rare distinction.
As president Duterte’s budget chief, Diokno coined the phrase “The Golden Age of Philippine Infrastructure.” He harnessed an unprecedented P4.5 trillion to build up the country’s infrastructure and modernize the economy.
For BBM, Ben’s strategy is the same: More infra which should total P8.3 trillion in spending by 2028.
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The just concluded barangay and Sangguniang Kabataan election (BSKE) is a success. It was peaceful and orderly, “electronic counting was quick and without incident,” according to the PPCRV (Parish Pastoral Council for Responsible Voting), which deployed 200,000 volunteers nationwide to observe and man precincts for over 18 hours, for what possibly is one of the world’s broadest-based democratic elections, with a million elective posts at stake.
Numbering a million, the barangay or village and youth officials had been overstaying in their posts for five years, since 2018, thanks to three election postponements. Many have become abusive, corrupt and oppressive. They are the main reason why it is so costly and so difficult to do business in the Philippines, because everyone needs a barangay clearance, which is very expensive to obtain.
PPCRV volunteers reported incidents, many, of fake or flying voters and vote buying. “Vote -buying continues to be rampant, progressing from retail vote acquisition to group acquisition, even at the family and barangay level,” reports PPCRV. The poll watchdog suggests that in the future, elections be held in malls.
“Mall elections in select SM and Robinson’s malls were facile and incident-free. Access to parking, in-house security and the convenience and comfort of air conditioning were benefits appreciated by mall voters. It is recommended that mall voting be pursued on a nationwide level with participation of more mall operators and chains,” says PPCRV.
Congratulations to Comelec, PPCRV and to the Filipino electorate in general. As for the newly elected or reelected, well, you need to do a better job.
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