Marcos lauds ‘strong’ economy in admin’s first year, misses expected points in SONA 2023

President Ferdinand Marcos Jr., in his second SONA, proclaimed the country to be “sound and improving,” yet concerns in areas such as foreign policy and agriculture remain unaddressed.

President Ferdinand Marcos Jr. spent a great deal of his second State of the Nation Address (SONA) celebrating his administration’s progress in some pressing economic concerns and presenting future policy plans for other sectors last July 24 at the Batasang Pambansa Complex.

The president, however, failed to mention some issues that have recently plagued the general conversation, such as the International Criminal Court ruling, human rights policy, salary increases for teachers, the mandatory Reserve Officers Training Corps program, and the expanded Enhanced Defense Cooperation Agreement.

Ambitious economic targets

Marcos noted that the government is on track to reducing inflation after a concerning increase of 8.7 percent in January was followed by a steady decline in the following months up to July, which saw a slower inflation rate of 4.7 percent.

Marcos also prided on the 7.6- and 6.4-percent increases in gross domestic product in 2022 and the first quarter of 2023, respectively, which he described as a “testament to our strong macroeconomic fundamentals.”

For Dr. Jesus Felipe, director of the Angelo King Institute (AKI), the growth numbers are not to be boasted about as “it is just a result of the base effect from the economic recession during the pandemic.” The mentioned growth is expected due to revenge spending, Felipe added, after the lockdowns that caused the Philippine economy to plummet by 9.6 percent.

Dr. Mitzie Conchada, full professor from the School of Economics, warns that this type of growth driven by consumer spending is not sustainable. “What you really need is an industry-driven growth…as one based on consumer spending is volatile to shocks,” Conchada asserted, emphasizing the need to focus on supporting Philippine industries.

The president’s address gave a significant emphasis on his economic agenda under the Medium Term Fiscal Framework (MTFF). Apart from the 6.5- to eight-percent annual economic growth targets, the MTFF seeks to achieve reductions in the government’s fiscal deficit and national debt, and achieve a single-digit poverty rate.

A report by AKI—which Felipe and Conchada co-authored—flagged the government’s macroeconomic targets as “ambitious” due to the outstanding need for the Philippines to undergo structural transformations before hitting high and sustained growth levels. Felipe also commented that it would be hard to achieve these targets given a dim global economic condition.

Food security and the agriculture secretary

The late dictator’s son failed to mention his campaign promise to bring down the price of rice to P20 per kilo. Marcos instead focused on the expansion of the Department of Agriculture’s (DA) 7,000 existing KADIWA stores, which sell cheaper produce in high-demand and low-income areas.

As of press time, commercial regular milled rice retails at P37 to P44 per kilo, while rice sold in the KADIWA retails at P23 to P27 per kilo, according to the DA’s price monitoring.

Marcos also touched upon the current farm and fisheries clustering program of the DA that seeks to form cooperatives among the farmers and fisherfolk in order to reduce costs derived from an increase in production volume. He also mentioned the Agrarian Emancipation Act, which erased a total of P57 billion debt of agrarian reform beneficiaries.

Conchada sees the current policies of the DA as “band-aid solutions” to the worsening agricultural woes the country faces. “Instead of reinventing the wheel like what he’s doing, he should go back to research and seek solutions there.”

Boosting infrastructure

“The underlying logic to our infrastructure development is economic efficiency,” Marcos asserted as he flaunted his flagship P8.3-trillion Build Better More (BBM) program. He said that high-impact and profitable investments will be made in the BBM program through the Maharlika Investment Fund (MIF) but failed to specify which projects would be funded by the controversial measure.

In response to concerns about the controversial fund, Marcos held that the social security and public health insurance capital of the people will not be used in the MIF.

The Department of Finance previously said that they would look into using the MIF to accelerate the 194 flagship projects approved by the National Economic and Development Authority and to fund green and blue projects such as road networks, energy generation, and water distribution.

Marcos recognized the need for climate-adaptive policy and infrastructure. To combat El Niño dry spells, he announced water supply projects worth P14.6 billion. He also called on the Congress to pass the bill establishing the Department of Water Management. Last April 27, the president signed an Executive Order establishing the Water Resources Management Office, which would serve as a transitory body for the proposed agency.

The chief executive lauded the continuous efforts of government agencies in bettering internet speed and digital infrastructure. The recently launched eGov app is seen to integrate the National ID system and to serve as a one-stop-shop for government services, Marcos said.

The president also discussed his energy agenda, which is anchored on diversifying the energy mix of the country by resolving issues in increasing renewable energy sources, and resolving issues in integrating a national electric grid and in fully electrifying rural areas.

In multiple press releases, environmental rights group Greenpeace has expressed concern over Marcos’ energy plan, citing the renewal of the Malampaya gas plant contract and the construction of additional coal power plants. The group stated that these moves make the Philippines unable to reach its commitment keeping global temperatures below 1.5-degree growth, as it would be “locked into long-term fossil fuel contracts.”

In a press conference in August 2022, Energy Secretary Raphael Lotilla said that the administration will retain former President Rodrigo Duterte’s moratorium on new coal power plants, which took effect in November 2020.

Social protection, future legislation

Marcos showcased education, healthcare, and employment opportunities as components in providing social safety nets for poor Filipinos.

He dwelled on his education agenda, highlighting the technical-vocational education and training programs of the Technical Education Skills Development Authority. He also made mention of the reviews of the Department of Education’s (DepEd) K to 10 curriculum and nursing programs.

Last August 10, DepEd released the MATATAG curriculum, which supposedly focuses on developing foundational skills and provides a decongested curriculum in comparison to its previous design. The revised curriculum is expected to be implemented in School Year 2024-2025.

During its 2023 budget hearing, the Department of Health said that the country currently faces a shortage of 127,000 nurses despite being the largest exporter of nurses abroad. Medical groups such as the Philippine Nurses Association and Filipino Nurses United have repeatedly lobbied for higher pay, citing the discrepancy as reasons for them to leave the country.

On healthcare, the president said he will implement a community-based drug policy, doing away from his predecessor’s iron fist strategy. Marcos also discussed widening health benefits for Filipinos through PhilHealth and construction of related facilities. He announced that coverage for dialysis patients would be expanded from 90 to 156 sessions, together with the expansion of the national vaccination program for measles, mumps, rubella, and polio.

Conchada welcomes these efforts in alleviating poverty. However, she doubts the possibility of achieving a single-digit poverty rate by 2028 due to “a lack of substantiation and mechanization” on how the administration intends to do such.

Marcos closed his speech appealing to Congress the swift enactment of his priority legislative agenda, including excise taxes on single-use plastics and road use, new laws on the procurement and audit processes, and the Tatak Pinoy law—a measure that seeks to promote Filipino-made products through bolstering public-private partnerships.

With reports from Vinz Garcia

Nash Laroya

By Nash Laroya

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