As of this writing, President Bongbong Marcos has made 14 international trips to 11 countries during his presidency so far, which began on June 30, 2022 and he has asked Congress for a bigger budget for his wanderlust.
The official statement is that these trips are meant to attract foreign direct investments. So far, they have been utter failures.
Writing for the Philippine Daily Inquirer, economist Cielito Habito is telling a lot of numbers that instead reveal a gross mismanagement of our economy.
The Philippines ended 2022 with the least inflows of job-creating foreign direct investments (FDI) among its Asean peers. Bangko Sentral ng Pilipinas blames it on “investor concerns over weak growth prospects amid persistent global uncertainties.”
But Habito maintains that our neighbors have mostly reported higher FDI inflows, or modest declines at worst, “What this means is that up or down, government has a lot to do with our economy’s performance lately. The economy’s overall slowdown in Q2, in fact, traced clearly to government actions, or lack thereof, in both direct and indirect ways.”
Directly, Habito continues, it slowed down the economy with its dramatic spending decline in Q2, when government consumption expenditures fell by 5.2 percent from the first quarter, and by 7.1 percent from the same quarter last year.
Meanwhile, Q2 government infrastructure spending ground down to a near halt of 0.8 percent, compared to a 5.1-percent increase in the previous quarter and 24.4 percent a year ago.
This cutback must have been induced by the already high level of public debt, last reported at 63 percent of our GDP and beyond the rule-of-thumb safe threshold of 60 percent.
As such, government has defaulted on its textbook “pump-priming” role that is otherwise called upon when spending in the rest of the economy is weak.
Indirectly, the economist explains, government’s continued failures in agriculture coupled with a long misguided restrictive trade policy have speeded up supply-side inflation that forces the BSP into using demand-side monetary tools like raising interest rates, further choking an already slowing economy.
Habito sighed, “One gets the sinking feeling that we’re doing everything wrong at the worst of times,” as he proceeds with his analysis:
First, Philippine prices are rising the fastest. Our 5.8 percent average inflation rate in the second quarter outpaced Singapore’s 4.1, Indonesia’s 3.2, Vietnam’s 2.5, Malaysia’s 1.8, and Thailand’s 0.6 percent.
Clearly, there are more than hiked global prices driving our inflation, as that wouldn’t explain why our inflation rate is significantly faster than in our neighbors.
It’s well known that food prices have mainly been driving Philippine inflation, and this traces to our government’s traditional mismanagement of our agriculture and food sector over the long term, and its refusal to loosen obvious market tightness via eased food imports in the short term.
Second, we persistently have the highest unemployment rate (currently at 4.8 percent), except for Indonesia at this time (5.5 percent). While it’s good news that our unemployment rate has returned to pre-pandemic levels, it remains significantly higher than Malaysia’s 3.5, Vietnam’s 2.3, Singapore’s 1.6, and Thailand’s 1.0 percent.
This is even with millions of our workers employed abroad, which means that joblessness would have been far worse if not for those overseas jobs. And what it does to the families of those who must leave to support them is a social cost that they would rather avoid if they had a choice.
Third, our economy posted the second fastest growth among our peers. Even with a Q2 slowdown to 4.3 percent, it still outpaced Vietnam’s 4.1, Malaysia’s 3.2, Thailand’s 1.8, and Singapore’s 0.5 percent (although eclipsed by Indonesia’s 5.2 percent).
But this is mostly an arithmetic outcome rather than a strong showing because our economy sank the deepest during the pandemic. Our higher growth rate is simply the natural result of recovering from an unusually deeper contraction.
Fourth, we continue to get the least foreign direct investments (FDI) among our peer neighbors. The $9.4 billion that came in last year was below Thailand’s $10.2 billion, Malaysia’s $15 billion, Vietnam’s $17.9 billion, Indonesia’s $21.4 billion, and Singapore’s $140.8 billion.
Worse, our FDI inflows have dropped by a fifth so far this year, even as some of our neighbors saw theirs increase.
Fifth, we export far less than our neighbors do. This relates directly to our difficulty in attracting FDI, as the dynamic exports of our neighbors largely come out of the same foreign companies we find hard to attract.
Even worse, the export gap with our neighbors keeps on growing over time. Last year, our $79 billion merchandise earnings were a pittance compared to Thailand’s $287 billion, Indonesia’s $292 billion, Malaysia’s $353 billion, Vietnam’s $372 billion, and Singapore’s $515 billion.
The gap with next-higher Thailand is already $208 billion; in 2021, the gap with then next-higher Indonesia was a much smaller $157 billion.
Our export lag also mirrors our pathetic performance in agricultural exports, from which we earned only $7.5 billion in 2022, a tiny one-seventh of Vietnam’s $53.2 billion, about a fifth of Thailand’s $37 billion, and less than a third of Malaysia’s $25.7 billion.
We also have the lowest exports-to-GDP ratio of 13.8 percent, vs. Indonesia’s 19.6 percent, Thailand’s 53.5 percent, Malaysia’s 63.3 percent, Vietnam’s 104.2 percent, and Singapore’s 126.9 percent.
Habito sighed again, “We have slid so far behind, that it’s hard to imagine how we could ever catch up.”
Economic Woes to Political Doom
We cannot pump-prime the economy because we are already heavily in debt. We have overdone our food imports because our countryside production is weak. We have slowed down on merchandise exports because we hardly have industries to speak about. There is hardly new money because foreign direct investments are coming far from expectations raised by the Presidents travels.
The picture becomes gloomier because the prospect of capital inflow is dismal because our laws are restrictive on foreign equity, our ways of doing business may be undergoing repair but still corrupt, and worse of all, the price of electricity is one of the highest in the world and cost of transportation has soared P2 per liter per week for the past 10 weeks.
Badly, the wealth of this country is not within government control and certainly not in the pockets of the great majority of the population.
It’s the economy, stupid!
The people may not be aware of the causes, but the people certainly knows that Bongbong Marcos is not delivering on his promises of post-pandemic recovery.
From Pulse Asia’s June to September 2023, the President’s approval rating sank two digits by 15 points.
Public dissatisfaction is felt across the the socio-economic groupings – Approval dropped 22% among the ABC, 12% among the D, and 29% among the D – the masses. Disapproval increased 6% (ABC), 6% (D) and 5% (E).
The areas of most urgent national concern are realistic.
A big majority of the country’s adult population (74%) expresses concern about the need to control the rising prices of basic commodities. The second most often mentioned urgent national concern is increasing the pay of workers (49%) while a third group of responses includes creating more jobs (27%), reducing poverty (25%), and fighting graft and corruption in government (22%).
What has become obvious is that the President covers up this despicable state-of-the nation by prioritizing on the military’s build-up from five to nine American bases, while the Philippine Coast Guard stirs the waters of the South China Seas.
According to the survey, as against 74% choosing inflation, only 7% cited “defending the integrity of Philippine territory against foreigners”, the flagship of the Marcos Jr government, as most urgent.
In short, this government has put our economic welfare in the backburner as it pushes the country in clear and present danger of being dragged into a US-China confrontation. Who will invest in a war-bound country?
As if this nonchalance were not sickening, the President’s wife and maternal cousin who is speaker of the House of Representatives, are trying to consolidate power by organizing a new political coalition, clawing on a more popular vice president and a former president of the Republic.
It seems that Martin Romualdez is himself building a road to the presidency in 2028 by aspiring to be Senate President in 2025, while the President’s son Sandro is being positioned by this greedy family to take over the House after the coming midterm elections.
This steaming blind ambition made an expensive collateral damage out of former President Gloria Macapagal Arroyo after she was unceremoniously dislodged as senior deputy speaker. The move also drew Vice President Sara to resign as chairman of the supermajority Lakas Party, which has already been taken over by the Speaker.
Romualdez is now building another coalition with Lakas at helm and Bongbong’s Partido Federal and a new group led by Albee Benitez “Kilusan ng Nagkakaisang Pilipino”.
The so-called “Uniteam” that won for Marcos Jr the 2022 elections a seeming landslide has been shanghaied by the first lady and Romualdez, crossing over to the nests of the yellows and the pinks, and the lairs of the reds.
This, however, alienated the Duterte Diehards (DDS) and turned off a lot of erstwhile Marcos loyalists and independent supporters sending the “Uniteam” and the slogan “Samasama Tayo sa Pagbangon”, to an early demise after only a year of Bongbong in power.
Arguably, PBBM’s steep two-digit decline in the polls has also affected Sara Duterte. But only in Pulse Asia’s ABC grouping where she lost 18% approval still better than BBM’s 22%. They are almost even-steven in the D category but she pulled out of the President’s misfortunes in the E group by losing only 8% compared to BBM’s loss of 29%.
Liza Araneta’s confidence at controlling the 2025 elections is of course anchored in her malicious collaboration with Smartmatic in the 2022 presidential elections, manipulating some 8 million votes in favor of her husband.
But it seems she will be having difficulty corrupting her husband’s Comelec appointees Chairman George Garcia and Commissioner Nelson Celis because they have been election reformers.
The Comelec has also been under tremendous pressure after former DICT Secretary Eliseo Rio exposed his forensics on Smartmatic generated cheating in 2022 exposing about 20 million preprogrammed tallies from a single IP address.
Increasing the decibels on the scandal is former Congressman Glenn Chong who also executed an affidavit on how the Liza, who was BBM’s campaign manager, personally met with Smartmatic officials few days before the presidential elections.
The Marcos bandwagon was leading all the way in the presidential polls. As to why Bongbong chose to be our second digital president next to Noynoy Aquino, instead of standing up against the American cheating machine, boggles my mind.
It appears that the second chance the Filipino people gave the Marcos family name is waning at an enormous rate, on their own doing and that their house of cards is fast crumbling.
I started this article by referring on Bongbong’s wanderlust.
Will he have a country to return to the next time he goes on a foreign travel?