In pushing for his economic agenda under the slogan of "Bagong Pilipinas," President Ferdinand Marcos Jr. is triggering the "authoritarian nostalgia" of his father's regime, said economist JC Punongbayan.

 

For his third State of the Nation Address (SONA) on July 22, Marcos highlighted programs such as Kadiwa, Masagana 99, and the Golden Age of Infrastructure-reminiscent of the late dictator's economic priorities during the Martial Law period.

 

Punongbayan, UP School of Economics assistant professor, INCITEGov Trustee, and author of the best-selling book "False Nostalgia", said this aims to evoke the sentiment that life under the dictatorship was "good," and so with the Marcoses returning to power, such policies and programs must be brought back.

 

A critical assessment of these economic priorities, however, points to a different story.

 

Dr. JC Punongbayan joins CSO representatives in a forum on Marcos Jr.'s economic agenda.

 

In the Aug. 3 forum, "So(Ano)Na? A Critical Look at the State of the Philippine Economy," organized by the International Center for Innovation, Transformation, and Excellence in Governance (INCITEGov), Punongbayan outlined concerns with Marcos Jr.'s economic agenda. Here's a rundown:

 

Slow economic growth, faster inflation

 

Post-pandemic economic growth, measured by the gross domestic product (GDP), has slowed to 5.6% in 2023 and 5.7% in the first quarter of 2024. This is lower than the government's 6-7% target, attributed to the lower consumption, government underspending, and weak investment spending.

 

Inflation, or the rate at which prices increase, hit 8.7% in January 2023, the highest in 14 years. For 30% of Filipinos considered poor, this rate is higher at 10%. While global factors contributed to this uptick, Punongbayan also noted the Marcos administration's failure to address food inflation, specifically on rice. This is "very far from the promise" of Marcos in his presidential campaign to reduce the price of rice to Php 20 per kilo-currently Php 65 per kilo on average.

 

During the forum, Anna Luna, Vice President of Samahan ng Nagkakaisang Pamilya ng Pantawid (SNPP), lamented how she can no longer stretch her income to meet the rising prices of goods, which in turn affects the nutrition of her family.

 

SNPP's Annabelle Luna laments the daily struggle of managing their family's budget amidst the rising prices of basic commodities.

 

"Even if we want to have complete nutrition, we cannot give it now because the price is too high. Even if we don't want to eat noodles, it's like the 'national food' that you can find in the market because it's the cheapest," Luna said.

 

With the Rice Tariffication Law in place, Punongbayan said the National Food Authority's rice monopoly was removed and the import quota was lowered from 50% to 35%, helping reduce rice prices. However, given the growing public dissatisfaction with how the administration addresses inflation, Marcos is exploring repealing the law.

 

Marcos as Agriculture secretary

 

Taking on the role of Agriculture secretary for almost two years, Marcos implemented the new Agrarian Emancipation Act to remove liabilities and obligations to pay agrarian reform beneficiaries. The president also announced the return of Masagana 99, an agricultural credit program, and the Philippine Sugar Corporation, which were established under the Marcos Sr. regime. Punongbayan also noted Marcos' 2022 visit to the International Rice Research Institute (IRRI), similar to his father's. (IRRI was built five years before Marcos Sr. came into office.)

 

Underemployment and poverty

 

The biggest problem for the Philippine economy remains the underemployment rate, currently at a historic low of 9.9%, and twice the unemployment rate. Punongbayan explained that there may be jobs and skills, but workers do not earn enough.

 

Compared to other Asian countries, the Philippines' poverty rate is still high at 15.5% of 17.5 million Filipinos. For a predominantly middle-class country, this translates to a large portion who are considered poor, Punongbayan said. "For example, if someone gets sick, or has a tragedy or a family accident, they will have to spend a lot of money, they will have a hard time, and they will be poor again," he added.

 

Attesting to this, Belen Arevalo, urban poor leader and a senior citizen from Laguna, drew attention to the extreme climate conditions that have also affected their livelihood options.

 

"Because when it's summer, there's a farm. But when it's the rainy season, we don't have a farm. That's the only source of income," she said. Adding to their problem is the low water supply in their area in Barangay Malaban, where a viaduct is being installed.

 

Sectoral leader Belen Arevalo bares the impact of Typhoon Carina on their livelihoods and stresses the urgent need for government action.

 

As president of the Federation of Maralitang Mamamayan in Binan and committee head of Land and Housing of the Bahangunian Lake and River Network in Laguna, Arevalo urged the government to create more programs that can focus on sustainable livelihood and reduce the impact of poverty.

 

Maharlika Investment Fund

 

Marcos went on 24 foreign trips for the past two years, boasting investment pledges. But Punongbayan stressed that there is not enough data to show that it yielded actual investments, adding that foreign direct investments "kept going down" from 2021 to 2023.

 

Passed in July 2023, the Maharlika Investment Fund is one of the proposed ways to increase the country's investments. This is despite a high debt-to-GDP ratio of 60.9%. A crucial context is that this mimics Marcos Sr.'s policies of taking money from different government financial institutions, Punongbayan noted, recalling the misuse of funds within the then Central Bank.

 

Punongbayan explained that Maharlika will source its funds from Landbank, the Development Bank of the Philippines, and the Bangko Sentral ng Pilipinas (BSP), amounting to more than Php 120 million. But even with its urgent legislation, he added, "Maharlika Investment Fund still hasn't been invested because their organizational structure hasn't been approved by the Board of Investments. They just passed the rules for their investments."

 

Economic Charter Change and Unprogrammed Funds

 

In addition to the Maharlika fund, the House of Representatives has initiated Constitutional changes to certain economic provisions that would enable more foreign direct investments into higher education, advertising, and the public services sector. Some lawmakers argued that the Constitution is "not compatible" with the 21st-century economy. However, Punongbayan said this does not reflect the priorities of the Filipino people, noting that many sectors are already open to foreign investments.

 

Along with this attempt to change the Constitution, he lamented the ballooning amounts for unprogrammed appropriations-the standby authority to spend in the budget-over the last two years. In the 2024 budget cycle, a new provision was added to allow the use of reserve funds from government-owned or -controlled corporations for unprogrammed funds. This move, Punongbayan said, has resulted in the transfer of funds from agencies like PhilHealth to infrastructure projects, financial aid, and infrastructure programs like roads, bridges, flood control, and multipurpose buildings.

 

With the upcoming midterm elections, INCITEGov called for more awareness campaigns about the Philippine economy among communities and NGOs. This includes raising gut issues and putting forward reforms on agriculture, education, and health sectors.