On the 126th anniversary of Philippine independence which gave rise to Asia’s first republic, the Ferdinand Romualdez Marcos Jr. administration launched a massive rebranding. Henceforth, the six years of his presidency, June 30, 2022-June 30, 2028, will be known as the Ang Bagong Pilipinas (the New Philippines).
There is a new hymn, “Ang Bagong Pilipino, Ang Bagong Pilipinas,” and a new pledge. It’s time for change, it’s time for reform. Patronize what is ours. Fix what needs to be fixed. Change is for progress. Do the right thing. Strive for excellence, in every field. Each triumph we offer to our beloved country. So the hymn goes.
Hard to argue against the need for change in the Philippines.
In a previous column, I said the three biggest problems of the Philippines are: 1) a food shortage, at least 25 percent of demand; 2) a job shortage, equivalent to 1.5 million jobs a year and 3) an investment shortage. Those three problems, in turn, are exacerbated by two equally big problems – corruption and red tape.
For nearly everything Filipinos must do, they must get a permit. That includes getting married, an electricity connection, a water line, building a house or putting up a business.
Perhaps, the only thing that doesn’t require a permit is peeing in public. It is against the wall. Not against the law. Did you know that 15 million Filipinos have no toilets?
Among the six biggest members of the ASEAN, the Philippines received the smallest foreign direct investments (FDI), $8.9 billion in 2023, down for the second consecutive year. Investments, measured by gross domestic capital formation, is declining as a percentage of GDP or total economic production.
For the Philippines to catch up with its fast growing ASEAN neighbors like Thailand, Malaysia and Vietnam, it must generate $2 trillion in domestic and foreign investments over the next ten years (or by $200 billion per year) and grow the economy by 10 percent per year. Instead of investing $200 billion per year, we are doing, at best, only $45 billion, per year – $35 billion in domestic investments and $10 billion in FDI.
Inequality is so bad only 100 families have ruled the Philippines’ economy and politics in the last 100 years.
In the last 65 years, Philippine presidents have come from just five families – Marcos, Macapagal, Aquino, Estrada and Duterte; instead of 16. We used to have a new president every four years and GDP was growing at six percent per year. In those 65 years, the Philippines deteriorated from being the second richest in Asia, after Japan, to become the region’s economic laggard.
According to World Bank 2022 data, “inequality remains high: the top one percent of earners together capture 17 percent of national income, with only 14 percent being shared by the bottom 50 percent. With an income Gini coefficient of 42.3 percent in 2018, the Philippines had one of the highest rates of income inequality in East Asia.”
Poverty incidence as a percentage of all Filipinos was 22.4 percent or 25 million Filipinos in 2023. These people cannot buy their food and their most basic needs – transport, water, electricity, shelter, education, medical care.
In terms of families, poverty incidence is 16.4 percent or 4.51 million families. To live like human beings, each family of five must earn P13,800 a month. They don’t earn that money.
Ironically, the Philippines exports more money than what it receives as investments, OFW remittances, loans and profits from investments abroad. The net trade in goods and services shows a deficit of $54 billion per year.
The BBM administration needs to repurpose its packaging of the Philippines. Bagong Pilipinas helps. It rallies the people to a common vision. Marcos Jr.’s unusual popularity helps sell the Philippines as an investment destination.
BBM has also assembled a solid economic team led by Finance Secretary Ralph Recto and property tycoon Frederick D. Go, the Presidential Adviser on Investment and Economic Affairs. Ralph is a veteran politician who has profound but practical ideas on growth and prosperity.
Deck Go, meanwhile, built the Gokongwei Group’s real estate conglomerate, virtually from scratch, into a sprawling P76 billion in market cap (peak of P82 billion in March). First quarter revenues rose 19 percent to P11 billion, profits up 21 percent to P3.34 billion and EBITDA (earnings before interest, tax and depreciation) swelled 53 percent to an all-time high of P6.15 billion.
The Marcos II administration thus knows both the politics and economics of growth, particularly growth with equity or inclusion. Growth must trickle down to the 25 million Filipinos too poor to afford their three meals a day, instead of empowering some more the 100 families who have ruled this country in the last 100 years.
Recto promises a single digit poverty incidence by the end of BBM’s presidency on June 30, 2028, what he calls “the turning point when the Philippines achieves genuine inclusive growth for Filipinos.”
“The Philippines is ASEAN’s brightest star,” gushes Ralph, with economic growth rising 6.2 percent since BBM became president.
This year, GDP growth will be between 5.8 and 6.3 percent, rising to 5.9-6.5 percent in 2025. Already, GDP or the value of economic production is $435.68 billion today. Recto says that will rise to $1 trillion – 1,000 billion dollars – in 2023, thanks to reforms the BBM government is now undertaking.
For his part, Deck Go will be the guest of honor and speaker of the Manila Overseas Press Club at 6 p.m. on June 25, Tuesday, at the Fairmont Hotel ballroom, with prominent personalities in government, business and media in attendance.
Secretary Deck is expected to update his audience on the investment outlook and today’s business climate.
Interested parties may contact the MOPC, look for Ms Dena, tel 0920-204-9229. Or email mopc1945@gmail.com to book tables.
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