TO BE OR NOT TO BE....

It has been fifteen months since Ferdinand Marcos Jr. took over the reins of government as the 17th President of the land. It should give the Marcos watchers a fairly good indication of what kind of a President the people had elected or the?answer to what is at the back of their mind all this time, that is whether he can do it or not.

All eyes are now looking at him not as the son of a former President but rather as the incumbent President of a country with an economy left far behind by its Asian peers. Its economy has slid to sixth from fourth place in the 10-member ASEAN bloc. “Naka fourth gear na sila yata." The Philippine economic engine meanwhile?has stalled after an impressive 2022 fourth quarter GDP of 7.1% which tumbled down?to 6.4% and 4.3% in the first two quarters of 2023. The country is again in an?all-too-familiar place among the ASEAN bloc.

The reaction of the members of the President’s economic team did not come as a surprise except for someone who reportedly blamed the absence of election but the anemic?performance was generally attributed to slower government spending which to my?knowledge is not a significant growth contributor.?

Digging deeper, I will now draw a timeline enumerating the series of catastrophic events that probably have not yet reached its summit. The first was a trade spat between the??U.S. and China back in July 2018 which quickly morphed into a trade war involving also their respective allies. This situation was followed by the arrival of COVID-19 in the early part of?2020 which left a trail of death and economic devastation worldwide. The world’s travails, however, continued with the surge in global inflation starting in mid-2021 followed?by the invasion of Ukraine by Russia on February 24, 2022.

“Durog na durog,” and that’s how I would describe what happened to the?global economy. It was like an orange being squeezed and crushed for its juice. These upheavals upended the economies of China, the second largest?economy in the world, behind the U.S., and that of Germany, the largest?economy in Europe. It forced many countries to rethink their strategies for?growth in the face of a fragmenting world heading? towards de-globalization,?de-risking, decoupling, de-dollarization, de-Chinafication, weaponization of trade and so on. Wherever it is going, it is not going to be a pleasant ride for everyone.

The number and scale of these global disorder left many countries feeling more vulnerable and in extreme cases erected trade barriers exacerbating the situation?which resulted invariably in choking the global food supply and?ultimately to a resurgence of high inflation, to higher interest rates and to further slowdown?in global economic activities and so on. There are now persistent talks of a global though shallow recession next year based maybe on these developments.

What can one learn from all of these? All I can advice now is to avoid doing a Dennis Uy act?who bit more than he can chew, debt particularly. It is a different world nowadays.

And yet, the President together with his followers and close advisers still went gung-ho by chasing an unrealistic target backed by bigger budgets, ambitious or?unrealistic goals whatever and focusing on matters which perhaps do not need?focus while losing focus on matters needing focus. Importation became the?favorite solution of choice by the Marcos administration and hoarders and?smugglers their favorite whipping boys.

It may also be a good idea for the President to change his strategy to make the?Philippines a preferred investment destination in Asia for foreign investors. Instead of sounding like a car salesman, I believe he should emphasize that the?country has a stable and business-friendly government, that it is carrying out?reforms, that labor is available, that there is legal protection for foreign?investors, that the country has competitive tax rates, that a massive?infrastructure development program started by former President Aquino remains?a top priority of the government.

Another matter which needs reconceptualization is the Maharlika Investment Fund (MIF). Personally, the country might stand to gain much more by transforming the?MIF into a special fund for the purpose specifically of investing in strategic?industries deemed vital for the speedy realization of the country’s goals of achieving an inclusive and sustainable economic growth. In this manner, I believe more revenues could be generated in the forms of dividends and?profit sharing, not to? mention capital gains,? it might also create more?employment opportunities, more tax revenues and spur investments in?various industries by providing liquidity to these investments through the stock market. To sum it up, it is a win-win situation for the government,?investors and the country overall.?

It might also be advisable to learn from Vietnam, the biggest supplier?of rice in the country, how it managed to become the fifth?biggest rice producer in the world.?Based on what is happening right now, the Philippine economy seems to be?drifting further and further away from its development goals which is turning out?to be more of aspirations than plans. In the case of the rice shortage, it is not the end of the?world for Filipinos but it would be quite a different story if they die on the streets due to hunger.?

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