‘It’s the same old tune of neoliberalism for Marcos Jr.’s 2nd SONA’

In his second SONA, Marcos Jr. sang the same old tune on his supposed economic achievements and platforms that have never truly benefited the ordinary folk.


MANILA – “Dumating na po ang Bagong Pilipinas,” (The New Philippines has come.) declared Ferdinand Marcos Jr. in his second State of the Nation Address (SONA).

What is new for the Philippine economy, which took a substantial portion of his speech? Did Marcos Jr. give a new vision or direction?

Marcos Jr. sang the same old tune of neoliberalism, favors for foreign capital and local oligarchs, and the usual chest-thumping of false economic gains. He reaffirmed his regime’s overall economic strategy, laid out in last year’s SONA, and will continue to rely on foreign capital and markets to propel economic growth and jobs.

Economy and infrastructure

The President cited the 6.4 percent first-quarter growth of the gross domestic product (GDP) and reminded the public that we are still among the fastest-growing economies in the world. The business process outsourcing (BPO) sector and remittances of overseas Filipino workers (OFWs) anchored this growth. Marcos Jr. mentioned in his speech that “OFWs continue to send in historically high remittances,” including P1.8 trillion in 2022.

But the problem with sourcing growth drivers from elsewhere is that these are unsustainable and speculative, especially amid multiple global crises. Marcos Jr. recognized this in his SONA while assuring the people. “On matters of the economy, there are many things over which we have no control. But over those where we do have control, we are doing everything we can.”

He referred to his administration’s Medium-Term Fiscal Framework (MTFF) and the Philippine Development Plan (PDP). Both economic blueprints, however, are rehashed neoliberal programs of the past several regimes, shaped by policy dictates from the International Monetary Fund (IMF) and the World Bank. Ironically, these medium-term plans perpetuate the lack of state control over matters of the economy. Both aim to create a more conducive setting for foreign and private capital through liberalization, deregulation, privatization or denationalization, and tax incentives.

Marcos Jr. highlighted his numerous foreign trips or “economic missions” that supposedly yielded an “estimated total investment value of $71 billion, or P3.9 trillion.” Additionally, to attract greater foreign capital, he declared to “solidify our country’s reputation as an attractive and reliable investment destination.” He cited the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law that has “made our corporate tax and incentive schemes equitable and business-friendly.” Under the CREATE Law, the government reduced the corporate income tax rate from 30 percent to 25 percent, resulting in hundreds of billions of pesos in foregone revenues. About P405 billion ($7.4 billion) in investments so far enjoy tax perks under the said law.

Read: Proposed tax hike to burden low-income Filipinos
Read: #Undoing Duterte | Ordinary folk burdened with higher taxes, price hikes, stagnant wages

With his strong bias toward foreign capital, Marcos Jr. has aggressively increased the economy’s vulnerability to external shocks and undermined its capacity to generate domestic wealth for sustained industrialization.

Meanwhile, his infrastructure development program, “Build Better More,” which professed to spur and accelerate economic growth, strongly relies on foreign debt and privatization. The 194 infrastructure flagship projects that Marcos Jr. cited in his SONA have an estimated total cost of almost $151 billion, based on a Bangko Sentral ng Pilipinas (BSP) report, of which more than 60 percent will be financed through official development assistance (ODA) and public-private partnership (PPP).

An additional mode of financing for these costly and profit-seeking infrastructure projects will be introduced soon. “For strategic financing, some of the nation’s high-priority projects can now look to the newly established Maharlika Investment Fund… In pooling a small fraction of the considerable but underutilized government funds, the Maharlika Fund shall be used to make high-impact and profitable investments, such as the Build Better More program.”

The debt burden of each Filipino has increased in just one year of the Marcos Jr. administration. (Infographics by Dawn Cecilia Peña/Bulatlat)

With Build Better More financed through ODA, PPP, and Maharlika, Marcos Jr. has set up the Filipino people to be squeezed dry through high user fees and debt servicing by foreign creditors, investors, and local oligarchs in the guise of infrastructure development and economic growth. In just a year in Malacañang, Marcos Jr. has increased the debt burden of each Filipino to almost P126,000 ($2,312), based on IBON Foundation’s estimates, with total government debt rising by nearly P2.71 million ($49,726) every minute.

Inflation and poverty

The President recalled inflation as the country’s most enormous economic challenge when he assumed office. In his SONA, Marcos Jr. claimed there is good news as inflation is supposedly “moving in the right direction.” He said: “From 8.7 percent in January, our inflation has continued to ease up in all regions, settling at 5.4 percent this June… We are stabilizing the prices of all critical commodities.”

Prices “stabilized” not due to substantial government intervention but because global oil prices have decreased. Gasoline and diesel prices, as the President cited in his SONA, have declined by 18 percent and 29 percent, respectively, since last year. Slower inflation in the past several months is more of a result of speculation amid global uncertainties and not because Marcos Jr. is “transforming the economy,” as he claimed. Overall, prices remain unpredictable and at the mercy of global market forces amid a severe lack of government control over the economy and consumer prices under the neoliberal regime.

Marcos Jr. credited his 7,000 KADIWA stores as a “big help” in lowering prices, benefiting 1.8 million households nationwide. But the figure is insignificant when measured against the country’s poverty extent. Around 12.5 million Filipino families consider themselves poor and can hardly afford basic needs, including food, based on the June 2023 survey of the Social Weather Stations (SWS). Almost two million more families consider themselves poor since Marcos Jr. took over last year compared to previous surveys.

Read: Marcos Jr.’s SONA far from the real state of the nation, sectors assert
Read: A year into office, Marcos Jr. shows no love for the Philippines

Still the highest inflation rate in Southeast Asia. (Infographics by Dawn Cecilia Peña/Bulatlat)

Slower inflation does not necessarily mean lower consumer prices. It may indicate a reduced rate of price increases, but prices can still rise. Given the record-high inflation rates the country has been posting since last year, prices of essential commodities today remain oppressively expensive and unaffordable for many Filipinos. The Philippines continues to have the worst inflation rate in the region, with a second-quarter average of six percent, as compared to Singapore (5.4 percent), Indonesia (3.9 percent), Malaysia (3 percent), and Thailand (1.1 percent). High inflation negates Marcos Jr.’s claim of the fastest-growing economy in the world.

One of the meaningful interventions that the government could have done to address the chronic problem of inflation and high prices is to mandate a substantial wage hike. Such a policy could have increased the buying capacity of millions of households. Marcos Jr. could only offer a paltry P40-hike ($0.73) in the National Capital Region’s (NCR) daily minimum wage. The family living wage (FLW) in NCR, which approximates the cost of decent living, is already at P1,163 ($21) based on IBON Foundation’s estimates, compared to the current P610 ($11) minimum wage. The situation is much worse in the country’s poorest regions – in Bangsamoro, the minimum wage is only 17 percent of the family living wage

Food prices remain out of reach for many households. For instance, the minimum wage in NCR could only cover an ordinary family’s ideal food expenses of about P608 ($11) daily. Instead of regulating consumer prices and mandating a substantial wage hike to address this, Marcos Jr. said in his SONA: “We introduced the pilot Food Stamp Program (FSP), which seeks to supply the nutrition needs of the million most food-poor Filipinos.” The program leaves behind the great majority of the food poor, which according to SWS, could reach as high as 9.2 million families in June 2023.

Jobs and livelihood

Marcos Jr.’s SONA would lead one to believe that almost all Filipinos have productive jobs: “As of May this year, our employment rate rose to 95.7 percent, clear proof of the improvement from the severe unemployment that we experienced during the height of the pandemic.” But when asked by SWS in their first quarter survey, 19 percent of the labor force considers themselves jobless, equivalent to about 8.7 million workers.

Official employment figures have long been criticized as problematic, using flawed definitions to hide the true extent of joblessness. Nonetheless, even Marcos Jr.’s jobs data would not hide that of the 48.26 million employed, 5.66 million are underemployed (i.e., looking for an additional job or a new job with longer working hours). Additionally, 13.56 million are self-employed without any paid employee, while 4.43 million engage in unpaid family work. Those in wage and salary work have to contend with meager pay equivalent to 17 percent to 52 percent of the cost of living. Contractualization and job insecurity continue to plague millions of Filipino workers.

Like his plans for driving economic growth and managing inflation, Marcos Jr. binds his employment strategy to unreliable and unaccountable external forces. The regime has no job creation program anchored on robust domestic industrialization and rural development plans. Even under Marcos Jr. ‘s banner of a fast-growing economy, job generation is hinged on foreign investment promotion and facilitation, such as the many presidential foreign trips he claimed in his SONA can potentially generate 175,000 jobs.

Building on his late dictator father’s legacy of labor export, Marcos Jr. vowed to create more jobs through the international labor market. “Several countries have signified interest to explore bilateral labor cooperation with the Philippines in the areas of healthcare, tourism, hospitality, engineering, construction, and information technology,” he said in his SONA while noting that the reopening of the world economy has increased overseas Filipino deployment by 62 percent last year.

With the President as concurrent agriculture secretary, the sector received prominence in the SONA. For this, Marcos Jr. boasted of KADIWA again, declaring that the program has improved farmers’ incomes and generated almost P7 million ($128,000) in sales while creating livelihoods for members of around 3,000 cooperatives and organizations.

But again, KADIWA becomes insignificant when put against the overall magnitude of the sector’s problems. While agriculture accounts for just 24 percent of the employed as of May 2023, it comprises 48 percent of the underemployed. Agriculture employment increased by 1.6 million between May 2022 and May 2023, but underemployment accounted for more than half (834,000) of that increase. The latest official data shows that poverty among farmers and fishers is almost thrice that of urban residents. Overall rural poverty is more than double of urban poverty.

Read: SONA 2023 | Agrarian reform beneficiaries await the fruits of their struggle

“I know that the state of the nation is sound and is improving,” Marcos Jr. proudly proclaimed.

But the real state of the people shows otherwise, and the vision for economic development that the late dictator’s son has offered in his SONA gives no reason for optimism. (JJE, RVO) (https://www.bulatlat.org)

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