Reflections on Marcos’ 1st 6 months
It’s been six months since President Marcos was sworn into office. If we liken Mr. Marcos’ six-year term to the well-loved game of basketball, we are now in the second half of the first of six games.
The first half of Game 1 was filled with many challenges. A Pulse Asia survey last September 2022 showed that the top concerns of Filipinos are controlling inflation, increasing the pay of workers and creating more jobs. Unfortunately, these continue to burden Filipinos into halftime of Game 1.
Before the first “game” ends on June 30, 2023, we’d like to share some of the administration’s notable wins during its first six months and some reflections on how to sustain the fight against these challenges.
First among Mr. Marcos’ wins is the appointment of credible and experienced economic managers. This means that we have a strong team to overcome the pandemic’s lingering effects on the economy.
Second, several executive actions were made during Mr. Marcos’ first six months to address the most urgent concerns of Filipinos.
The extension of Executive Order No. 171 for another year will help lower prices and manage food security. The Department of Agriculture emphasized that lower tariff rates on key commodities such as meat, rice, corn and coal will partially cushion the adverse effect of typhoons, the Russia-Ukraine war and animal diseases on domestic production.
Amendments to the implementing rules and regulations (IRR) of the Renewable Energy Act effectively opened the renewable energy sector to foreign investors at 100 percent equity. The entry of more players in the energy sector will increase competition that can help lower energy prices for consumers.
He also approved amendments to the IRR of the Build-Operate-Transfer Law, which made risk and income sharing fairer between the government and the private sector. This made public-private partnerships more attractive for the private sector. His state visits to Indonesia, Singapore and the United States also gained investment pledges amounting to $18.9 billion. These efforts could produce more and better local jobs for Filipinos.
Third, 19 out of 31 bills in the President’s legislative agenda have been passed in the House of Representatives. These include the Government Financial Institutions United Initiatives to Distressed Enterprises for Economic Recovery (Guide) bill that aims to improve financial support for micro, small and medium enterprises, which employ 63 percent of the country’s workforce.
Areas for improvement
Following and banking on these wins, the administration must sharpen its focus on the goal of addressing persistent problems in the country. As indicated by recent surveys of Pulse Asia and SWS, the most important and urgent are the top three concerns of Filipinos: elevated prices of goods and services, underemployment and quality of jobs and substantially reducing corruption.
The second half in basketball is crunch time and by this time, Team BBM must make decisive actions and good plays to win the game. It is crucial to take Game 1 because it will set the momentum and provide the motivation to succeed in the second and subsequent games.
Focus on the goal
Inflation has breached the government’s 2 to 4 percent target since April 2022, reaching a 14-year high of 8.1 percent in December 2022. Additionally, underemployment in the country was at 14.4 percent in November 2022. This means that 7.16 million Filipinos want to work more hours or take another job since their current income is not enough for their needs.
The President himself pointed out that we need to focus on addressing food inflation. We support calls for Mr. Marcos to appoint a full-time secretary of agriculture who can effectively lead through the various food-related crises we have been facing in recent months. However, in case he is not yet prepared to do that, the alternative solution is to have a rigorous monthly monitoring and supervision through the Legislative Executive Development Advisory Council (Ledac).
The 2023 national budget for the agriculture sector should be a significant part of the monitoring duties of the president and members of Ledac. It would also be helpful if there is a mechanism for policymakers and grassroots groups to see how public funds are translated into concrete projects that improve the value chain, among others.
Investment pledges would be wasted—akin to turnovers in basketball—if they are not translated into foreign direct investments (FDIs). Philippine ambassadors and attachés of the Department of Trade and Industry should help in following up the investment pledges secured by Mr. Marcos. This will increase the chances of converting pledges and the funds used for the state visits to actual FDIs that create new, better-quality jobs for Filipino workers.
In addition, we recommend the following:
1. Ratify our participation in the Regional Comprehensive Economic Partnership. This will give the Philippines access to a wider market and lower prices of goods and services.
2. Amend the Comprehensive Agrarian Reform Law to allow land and farm consolidation by increasing the five-hectare limit to 24 hectares. This will result in more efficient, productive, viable and competitive farms.
3. Pass the bill condoning agrarian reform beneficiaries’ unpaid amortization and interests. This will give farmers access to lending programs and assistance that can make their farms more productive.
4. Collaborate with the private sector to make common warehouses and cold storage facilities accessible to rural farms and link to digital ledgers, giving farmers access to multiple markets while reducing marketing costs.
In basketball, team members typically intensify their energy levels and use strategic plays in the second half to attain victory. Team BBM must communicate better and intensify their teamwork to ensure success by the end of the game.
To do this, Ledac should meet at least once a month to monitor the progress of the executive action and the supporting legislation that will continue to address inflation and other pressing issues. Specifically, the Ledac should:
- Ensure that funds appropriated for increased production of basic commodities and farm-to-market roads will be used timely and accordingly. This will help make food more affordable.
- Direct the Department of Budget and Management to gather data on how government funds are actually used on the ground. This would help in ensuring that government funds are used effectively and efficiently.
- Ensure that the following bills in the Common Legislative Agenda will be passed soon by both Houses of Congress: Guide bill, Amendments to Electric Power Industry Reform Act and e-Governance Act. The last two measures will help address concerns about corruption and improve transparency in government transactions.
- Prioritize the immediate release of the IRR of the Public Service Act amendments.
There are roughly less than six months left before Mr. Marcos faces the Filipino nation again for his second State of the Nation Address, where he will report his administration’s first year accomplishments. The administration will have to determine how to sustain the good work they have done so far and what adjustments are needed to address the most pressing and persisting issues in the country, namely controlling inflation, increasing the pay of workers and creating more jobs.
The outcome of Mr. Marcos’ first year in office will set the mood for the rest of his term, determine the amount of sleep he could get and maintain significant political capital needed to succeed in the next five years.
The author, Margarito B. Teves, is an economist and a former banker, lawmaker and finance secretary.
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