An economic downturn and poverty pose the greatest risks to the Philippines in the next two years.
This assessment is made not by critics of the Marcos 2.0 administration, but by the World Economic Forum (WEF), in its Global Risks Report 2025.
It was at the annual WEF gathering in Davos, Switzerland on Jan. 18, 2023 that President Marcos first pitched his pet project, the Maharlika Investment Fund, to global business and government leaders.
For sure, there were polite nods all around from some Davos participants, hyped by Marcos 2.0 as expressions of interest in the Maharlika. The junket to Davos after all had to be justified; the forum was cited as the reason for the indecent haste in which Congress passed the measure creating the first sovereign wealth fund in a country without excess wealth to invest.
Two years since Davos, any expressions of interest during the forum, whether real or imagined, has yielded a big fat zero in terms of actual foreign investments in Maharlika.
The global business titans who typically attend the Davos forum didn’t get to where they are through investment naivete.
The WEF Global Risks Report, which is based on the Executive Opinion Survey taken from April to August 2024, identified economic recession or stagnation as the top risk faced by the Philippines for this year and next.
Poverty and inequality ranked second in the list of risks. Next came the top concerns identified by respondents in local surveys: inflation, food supply shortage, and unemployment or lack of economic opportunity.
The economic managers of Marcos 2.0 may challenge the economic downturn part. But the rest of the identified risks are undeniable.
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That 18-year-old med tech scholar who needed to sell sampaguita garlands to augment the family income after their house was demolished, has become the latest face of poverty in this country.
For the inequality, you only have to look at the ostentatious display of wealth by public officials even while at work. They tool around in convoys of luxury SUVs, and have no compunctions about flashing Hermes Birkins and Rolexes.
In a revival of Imeldific fashion flamboyance, the butterfly-sleeve gowns and tops are back. While they provide livelihoods to local apparel makers, you wonder how public officials can afford such pricey clothes that are rarely worn twice. The average retail price of just one top at the malls can be equivalent to a month’s entry-level salary for a government nurse. If not purchased off-the-rack, such apparel will be priced three or four times higher.
For the food supply shortage, the government has a go-to response: import, import, import. A recent innovation: declare a “food security emergency,” to force rice prices down, as BBM himself explained.
For unemployment, job generation must not be seasonal (such as in the farm sector) and is best created by the private sector. As shown in a recent survey, however, private businesses are grappling with corruption and no ease in doing business.
The problem starts at the barangay and local government level where business permits emanate, and on to national agencies where kickbacks and “facilitation fees” at every step have become the kalakaran or norm.
Members of a major foreign chamber say the corruption problem in the Philippines has worsened. This is a disincentive to companies from countries where there are stiff penalties for those found to have engaged in bribery and related offenses in doing business overseas.
Several foreign diplomats have told me that their investors who are decamping from China are bypassing the Philippines and relocating instead to Vietnam.
Again, the government has a go-to response to unemployment: create more jobs in government. Create a new executive department. Gerrymander provinces, cities and even barangays, so that new positions will be created especially for members of entrenched dynasties and their cronies, and jobs can be doled out as patronage.
Never mind the cost of building a new capitol, city or municipal hall and hiring staff. Never mind the cost of creating more seats in Congress, which also increases the number of seats allotted to the party-list. The billions being spent to build a new Senate building could have built so many kilometers of toll-free roads in the Mega Manila area.
The government has become the biggest employer in this country, with no corresponding improvement in public service since hiring is not based on merit. Instead the new positions are packed with beneficiaries of patronage, good-for-nothing members of dynasties or nominees of the religious mafia and other special interest groups that are deemed to have clout during elections.
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With so much of the national budget going to personnel expenses, and now the congressional pork barrel and state-funded ayuda in aid of election, the government is increasingly turning over to the private sector the task of delivering basic services including the provision of roads.
Since these firms are not private charities, such roads require toll (plus VAT). Even middle class motorists think twice about paying the stiff tolls and instead endure heavy traffic on free-to-use roadways, thus defeating the traffic-easing objective of expanded road networks. The toll is also added to logistics costs –already high for the business community – and passed on to consumers, worsening inflation especially in food.
The political elite surely understands the situation, but the risks identified by the WEF and the concerns raised by the business community will never be addressed.
Why? Because this is a country where public officials see mass poverty and perpetual dependence on state ayuda not as problem, but as their ticket to staying in power.
A serious risk for the nation is the institutionalization of the use of ayuda for patronage and vote-buying. Anything that benefits the political elite in this country quickly becomes entrenched. Consider how dynasty-building has grown exponentially to its current shameless proportions.
Congress, packed by people whose priorities are self and family first before national interest, will never pass an enabling law to even moderate dynasty-building. The Supreme Court may have to step in to eradicate this rot in our society.
The objective of a government that serves the greater good must be emancipation from and not just alleviation of poverty.
A good gauge of success is not a ballooning national budget for state-funded aid, but a drastic reduction if not the elimination of the need for ayuda.