By means of Kyle Aristophere T. Atienza, News reporter
ARTHUR UGBANIEL, a 29-year-old professional who studied to be a chef, has been operating a motorcycle taxi for about a year after failing Find a job that pays well.
“This is only temporary,” the former call center agent said in an interview while oFa passenger in front of a bus station along the EDSA highway near the Philippine capital. “I plan to work abroad – perhaps in Japan – where I can get a competitive salary.”
The Philippines, which is largely an agricultural country, has failed to use its vast natural resources to build a solid industrial base, which economists say is key to long-term growth.
Ferdinand R. Marcos Jr., who is now in his third year as president and will deliver his State of the Nation Address (SONA) to Congress today (July 22), had promised to boost the agricultural sector and boost investment in manufacturing , where only 8% of the country’s workforce is employed.
In May, he pledged to make the Philippines a hub for smart manufacturing, citing its “geopolitical location, economic engagement and participation in regional agreements.”
Mr. Marcos’s government, whose campaign centered on a pledge of unity and a vow to bring the price of rice to P20 per kilo, is targeting economic growth of 6.5 to 8% in 2028, while reducing the poverty rate reduced to only 8%. %.
These targets are unrealistic, Jesus Felipe, director of the Angelo King Institute of Economics and Business at De La Salle University, said in an email, accusing the Philippine leader of his populist stance.
The only way to achieve these goals is by pursuing industrialization, which does not appear to be a priority of the government, he added.
“Perhaps the biggest problem facing the government is that it started with overly optimistic forecasts for 2023-2028 on growth, per capita income and poverty reduction,” Felipe said. “It was and still is nothing more than a wish list.”
“If you listen to the president or members of the cabinet, you get the impression that they are talking about Switzerland, one of the richest countries in the world,” he said.
Secretary of the Presidential Communications Office Cheloy Velicaria-GaraFI did not immediately respond to a Viber message seeking comment.
The World Bank reported that gross national income per capita rose 7% to $4,230 in 2023, but Mr. Felipe noted that about 80% of Filipinos earn $15,000 per month. “More than 50% of the workforce, or 25 million workers, are employed in agriculture, wholesale and retail trade, and construction, at very low wages and productivity. With this employment structure, it is impossible to talk about the Fourth Industrial Revolution or artificial intelligence as the future of the country.”
Mr Marcos has made more than 20 foreign trips since 2022 – 11 last year and three so far this year – to attract investment.
“His travels around the world to attract foreign direct investment are bearing more fruit as real interests are shown, especially by Japanese, South Korean and European investors in various infrastructure projects, renewable energy and large-scale agribusiness ventures,” said Bernardo M. Villegas, an economist and professor emeritus at the University of Asia and PaciFic.
But red tape that discourages both local and foreign investment remains a problem, he said.
Philippine central bank data shows foreign direct investment (FDI) fell 36.9% to $556 million in April from a year earlier, the lowest in 10 months. In the January-April period, net foreign direct investment inflows rose 18.7% to $3.525 billion.
‘HIGHEST PRIORITY’
Mr Villegas said the Marcos administration is on the right track in tackling food insecurityFThis percentage was 3.7% in June, compared to 3.9% in May and 5.4% a year ago.
InFInflation-adjusted wages nationwide were 17.5% to 24.6% lower than the daily minimum wage, according to a Business Survey in June.
Mr Villegas said the Marcos government has given the “highest priority” to tackling food inflation, which rose to 6.5% in June from 6.1% a month earlier, by raising tariffs on key agricultural products including rice to lower.
“He has recognized the harsh reality that there are some food products in which we have no comparative advantage in production and which have to be imported despite objections from our farmers,” he said.
Executive Order No. 62, which is being challenged by farmer groups in the Supreme Court, reduced tariffs on rice imports from 35% to 15% until 2028 as part of a reduced tariff.Ff regime for other agricultural products such as pork and corn.
“Aside from international travel, we saw the initiative to push Charter change as an economic strategy to attract investment, when there are clearly more important policies and issues that the government should be focusing on,” says Cielo D. Magno , a professor at the University of the United States. Philippines School of Economics, said in an email.
Ms. Magno, who served as deputy finance secretary under Mr. Marcos, criticized Finance Secretary Ralph G. Recto’s statement that no new taxes would be collected.
“It is based on political interests,” she said, noting that before Mr Recto took over in December, the Finance Ministry had approved higher sin and mining taxes.
Ms Magno, who resigned from the Marcos cabinet last year after the president imposed a price ceiling on rice amid rising prices, said the inability to control spending lead to a higher deFdebts and debts.
The government has also mismanaged the country’s human capital, without clear direction for the future workforce, she added.
Philippine students were among the weakest in the world in math, reading and science, according to the 2022 Program for International Student Assessment (PISA). The Philippines ranks 77the from 81 countries and performed worse than the global average in all categories.
Citing the 2022 report, the Organization for Economic Co-operation and Development said 15-year-old Filipino students ranked 63rdrd from 64 countries in the field of creative thinking.
Priority bills aimed at restoring the deteriorating quality of Philippine education and harmonizing enterprise-based education and training programs are pending in both Houses of Congress and are expected to be approved before the end. out of 19e Congress in June 2025.
Critics have said the Education Department was highly politicized after Marcos appointed Vice President Sara Duterte-Carpio, his 2022 running mate, to the post.
Ms Carpio resigned from the Cabinet last month as ties between her family and the Marcos camp deteriorated.
Mr. Marcos’ third year in offThe ice is not expected to be easy, given the bleak outlook for household spending, which has risen 4.6% in recent years. Ffirst quarter, slower than 5.3% in the fourth quarter and 6.4% a year ago. It was the slowest pace since the 4.8% decline in the US Ffirst quarter of 2021 amid coronavirus pandemic.
But his foreign policy appears to be a bright spot amid the growing threat from China, which claims almost all of the South China Sea, including waters within the Philippines’ exclusive economic zone (EEZ).
Randy P. Tuaño, dean of the Ateneo de Manila University School of Government, praised the president’s political pivot away from China and toward its Western allies, including the US.
“The president’s performance in handling foreign relations and external threats is relatively commendable,” he said in an email.
“We have re-established our ties with our traditional allies in Asia and the world, and we have held up relatively well against threats to our national sovereignty in the West Philippine Sea,” he added, referring to areas of the South -China Sea within the Philippines’ EEZ.
‘SENSE OF REALITY’
Six out of ten Filipinos were satisfiedFThis is related to the state’s handling of the maritime conflict with China, according to a poll by the Social Weather Stations (SWS) conducted days after a position statement on June 17.Ff at Second Thomas Shoal.
“While efforts to address our national security challenges and build an improved business environment are valuable goals, addressing institutional and bureaucratic issues, which are important to improving the delivery of public services, unfortunately still requires significant effort.Fno attention,” Mr. Tuaño said.
“The bureaucratic ‘rightsizing’ project has not yet gotten off the groundFMost ministries are still very top heavy, with numerous undersecretaries and assistant secretaries,” he said. “Efforts to strengthen the use of information and communications technology in the delivery of services need to be addressed.”
Hansley A. Juliano, who teaches politics at Ateneo, expects Mr. Marcos to become even more populist amid his declining approval and trust ratings, which fell 2 points and 5 points to 53% and 52% in the latest Pulse Asia Research , Inc. .
He will likely focus on benefits such as cash and food aid rather than building homes and schools, which could take years Fdone, he said in a Facebook Messenger chat.
Jan Robert R. Go, a political science professor at the University of the Philippines, said the government must innovate and shun a “business as usual” attitude in running its economy.Fscholarships.
Mr Villegas said Mr Marcos must increase the country’s savings rate to make long-term capital availablesuitable for long-term projects.
“Government budgets for public education and health should be increased to match those of the other ASEAN (Association of Southeast Asian Nations) countries in terms of percentage of GDP (gross domestic product) from 3% to at least 6%” , he said. said.
“There also needs to be more determined eFfortresses to eradicate corruption in the procurement of government supplies and in the implementation of public works projects,” he added.
Ms. Magno said that in his third SONA, the President should convene Congress to boost industries and take a stand against oFgambling on the coast Firms, which authorities have linked to crimes.
“We don’t hear anything about the president’s industrial policy,” she said. “It is not enough to travel to attract investment and stimulate the economy.”
Mr Felipe said the president must “bring a sense of reality” to the SONA and avoid raising false expectations. “The country will continue to do reasonably well, but not [at the level] the government claims.”