In its yearend report, the National Economic and Development Authority (NEDA) described the Philippine economy as remarkably resilient. It outpaced the growth of major regional economies despite severe weather-related disruptions and has put us, the economic managers claimed, in a good position to become an upper-middle-income country (UMIC) by 2025.

The gross domestic product (GDP) grew by 5.8% in the first three quarters of 2024, faster than Malaysia (5.2%), China (4.8%), and Singapore (3.8%). If we achieve the GDP growth target last year and in 2025, the country’s gross national income or GNI (GDP plus net income from abroad of Filipinos) per capita could breach the USD 4,466 threshold that the World Bank has set for UMIC status.

Deteriorating social conditions

The problem with these macroeconomic indicators is that they only show the aggregate value of economic production at a particular time but do not measure the extent of social development, much less the state and quality of the population’s well-being. The GDP will grow by 6 to 7.5% in 2024 and 2025, as targeted by the Marcos administration, and will not put US$4,466 or some P258,000 into the pockets of each Filipino and make all of us upper-middle-income. The Philippines may have a faster GDP growth in 2024 than China, Singapore, and Malaysia, but these countries are far ahead in terms of the overall living conditions of their citizens.

Marcos and his economic managers do not tell us this. Still, the common folk already know that the economy is not responding to their needs and that social conditions are rapidly deteriorating. Based on Social Weather Stations (SWS) surveys, the number of families that consider themselves poor has ballooned to an average of 15.1 million in the first three quarters of 2024 compared to the 12.2 million full-year average in 2022. That means around 2.9 million more families or 14.5 million more Filipinos have considered themselves poor since Marcos took over. The number of families who reported they experienced hunger jumped by 2 million – from 3 million in 2022 to 5 million in 2024. Around 10 million more Filipinos have become hungry under Marcos.

Based on these indicators that used people’s perceptions of their well-being, we can argue that the Marcos regime is even worse than the COVID-19 pandemic in terms of socioeconomic impacts. In 2020, during the height of the pandemic, when most economic activities froze, there were, on average, fewer poor families (12 million) and about the same number of hungry families (5.3 million).

Contributing to and aggravating poverty and hunger are high prices, which have continued to burden millions of Filipino households under Marcos despite claims that the government has effectively managed inflation last year. Inflation slowed to 3.2% in January to November 2024 from 6.2% during the same period in 2023. However, food prices, especially rice, have remained high. From January to November last year, rice inflation averaged 17.8% compared to 7% in 2023, even though it decelerated in the fourth quarter of 2024.

As of December 2024, the national average retail price of well-milled rice is pegged at P54.66 a kilo, essentially keeping its elevated level of P54.68 posted in December 2023. Similarly, the retail price of regular-milled rice did not practically change and remained inflated at PHP 49.10 per kilo in December 2024 compared to P49.38 a year ago.

Biggest calamity

Agriculture was the worst-performing major economic sector in 2024, and the Marcos regime conveniently pinned the blame on the typhoons and El Niño that hit the country. To be sure, the weather disturbances did wreak havoc on domestic agriculture, with estimates of loss and damage at more than P12 billion due to typhoons and drought last year. Agriculture’s share of the domestic economy further shrank to an average of 7.8% in the first three quarters of 2024 – an all-time low, and it also lost almost 396,000 jobs between October 2023 and October 2024.

The biggest calamity that devastated the sector in 2024, however, was not the typhoons and El Niño but the Marcos regime’s neoliberal program, which aggravated the decline of agriculture, further decimated its capacity to impact economic development positively, and further compounded the woes of Filipino farmers amid the climate crisis.

To supposedly bring down the price of rice to P29 per kilo, for instance, Marcos issued Executive Order (EO) 62 in June 2024 that reduced rice tariffs from 35% to an all-time low of 15% until 2028. However, as noted, the retail price of rice remained exorbitant at the expense of consumers. The further liberalization of rice importation drowned the livelihood of local rice farmers who saw the farmgate price of palay (dry) go down from an average of P21.95 per kilo in November 2023 to P20.03 in November 2024.

Liberalization, combined with the monopoly of private rice importers and traders, oppressed poor consumers with artificially bloated retail prices and small farmers with artificially depressed farmgate prices. Agriculture officials expect Philippine rice imports to reach a record high of 4.7 million metric tons (MMT) in 2024, leading to the greater destruction of domestic agriculture.

With import liberalization, small rice millers also lose out in competition with big rice millers. The increased importation of rice intensified competition in the milling industry, enabling large rice millers to dictate buying prices and secure a larger share of locally produced rice, disadvantaging smaller mills. Even before EO 62 and the further reduction in rice tariffs under Marcos, small-scale rice and corn millers in over 1,000 barangays nationwide shut down in the past decade as the country’s rice import dependency ratio almost tripled from 8% to 23%. The situation is bound to worsen in the coming years.

It’s not only the small and poor farmers who cannot afford the increasing prices of food and overall cost of living but also those who work in the cities and receive wages. Amid rapid inflation, the Marcos administration rejected calls for a substantial wage hike and gave paltry adjustments. In Metro Manila, for example, the daily minimum wage was adjusted by P35 last July 2024, which brought the new rates to P645. This amount is equivalent to just 53% of the estimated daily cost of living of P1,205 in the capital region as of November 2024, based on the socioeconomic think tank IBON Foundation’s rough calculation.

Marcos’s refusal to effect a meaningful increase in the minimum wage is part of the longstanding low-wage policy of successive Philippine regimes that favor big business and foreign investors.

Taking care of business

Aside from ensuring that workers’ pay remain depressed, the Marcos administration took several measures in 2024 to protect and attract more foreign capital. It issued, for example, the Implementing Rules and Regulations of the Public-Private Partnership (PPP) Code and new guidelines to fast-track the approval of PPP projects. These led to several major PPP deals awarded last year, including the PHP 170.6-billion privatization of the Ninoy Aquino International Airport (NAIA) bagged by San Miguel Corporation (SMC) and its South Korean partner in what is considered the fastest privatization process in the country’s history.

The regime’s Build Better More (BBM) infrastructure development program through privatization and foreign debt is designed to give more profit-making opportunities for compradors supportive of the Marcos regime. The billionaires who accompanied Marcos at the World Economic Forum (WEF) in 2023 have been bagging hundreds of billions of pesos in infrastructure deals with the regime. Aside from Ramon Ang’s SMC, the Ayala and Aboitiz groups also cornered major PPP contracts under the BBM program last year.

Handing out privatization contracts to favored oligarchs in an accelerated fashion was just one of the initiatives Marcos implemented in 2024 to create an even more conducive environment for big business profit-making. Last November, Marcos signed the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act. The CREATE MORE Act, shaped by inputs from foreign investors through Marcos’s numerous trips abroad, reduced the corporate income tax from 25% to 20%, doubled the deductions on businesses’ power expenses, and almost tripled the period for corporations to enjoy some fiscal incentives, among others. All these while ordinary consumers and small local entrepreneurs continue to suffer from high and regressive taxes and exorbitant electricity rates.

Additionally, Marcos’s allies in the House of Representatives approved last December a bill extending the land lease for foreign investors to up to 99 years from the current 50 years (renewable once for another 25 years). A priority legislation of the Marcos regime, the proposal also allows foreign businesses to lease land for agricultural use – a reprehensible irony in a country where, according to peasant groups, seven out of 10 farmers remain landless.

Economic production may continue to expand, but it will only grow corporate profits under the Marcos regime’s unabashedly pro-business development program. A great majority of the people will remain destitute and starving amid the upper-middle-income delusion of the regime. (RVO)