President-elect Ferdinand “Bambang” Marcos Jr. has announced the names of the people who will lead his economic party. They are technocrats whose skills and credibility have a demonstrated track record.
Notable among them is Dr. for the National Economic and Development Authority (NEDA). Arseno Balisakan and Dr. for the Department of Finance (DOF). Benjamin Diocono. They previously served as top economic managers during the administration of Marcos Jr.’s predecessors and are expected to steer the country’s economy in the next six years.
There has been some improvement in the Philippine economy. The Philippine Statistics Authority (PSA) recently reported that the unemployment rate fell to 5.7% in April – which translates to 2.76 million unemployed Filipinos – while the low employment rate fell to 14%, equivalent to 6.40 million Filipinos.
Moreover, according to a recent consumer expectations survey by Bangko Sentral ng Pilipinas (BSP), consumer outlook on the economy in the first quarter of 2022 has become less pessimistic as the overall confidence index has risen from -24% to -15.1%. Quarterly this feeling was attributed to the expectation of consumers for more job availability and sustainable employment, additional and higher incomes, and effective government policies and programs in the areas of quarantine restrictions, COVID-19 vaccines and financial assistance.
Despite this, the new administration faces a huge challenge to carry a record-high national debt of P12.76 trillion by the end of April. Finally fiIn the first quarter of this year, the national debt amounted to P12.70 trillion, equivalent to 63.5% of the country’s GDP. This is far from the 39.6% pre-epidemic debt to GDP ratio in 2019.
Mr Marcos Jr., of the Department of Budget and Management (DBM), urged current BSP Assistant Governor Amenah F. Pandaman to focus on the following areas in the 2023 National Expenditure Program (NEP): agriculture and food security; Climate change adaptation; Economic recovery; Improved healthcare and education; Advanced infrastructure projects, including digital infrastructure; Use of renewable energy sources; Strong tourism and job creation; And sustainable development.
Last month our institute launched the book titled Beyond the Crisis: A Strategic Agenda for the Next PresidentIt contains important recommendations on economics, governance, climate change, and foreign policy.
In a paper titled “Philippines: An Investment-led, More Sustainable Economic Growth”, former BSP deputy governor Diwa Guinigundo emphasized that “post-epidemic unemployment and inequality could threaten the long-term prospects of the economy.” Therefore, he called on the new government to shift from consumer and service-driven growth to investment-led growth.
Guinigundo emphasized that this can be achieved by promoting an interrelated set of policy responses in the following areas: the role of good private and public institutions, the need for good physical, health and digital infrastructure, green sustainable Finance, and appropriate legal measures to attract the right kind of investment.
“Increasing investment through improving the country’s investment environment can help the Philippine economy recover from the epidemic, mitigate the effects of its scars, and lay the groundwork for a healthier and more sustainable post-epidemic situation,” he wrote.
Ginigundo added, “It makes a lot of sense to attract the right kind of investment that has the highest potential for high growth and sustainability.”
Meanwhile, Philippine Institute for Development Studies (PIDS) Research Fellow Dr. Charlotte Justin Diocono-Scatat noted in her research paper that “strategies need to be better to return to inclusive growth with innovative public sector governance.” fiScale consolidation while balancing economic recovery through investment in infrastructure and human capital to stimulate inclusive growth.
Dr. Scat has given primary importance to the implementation of institutional and governance innovations across the public sector, such as investing in digitalisation.
Indeed, there is a significant difference between the incoming administration of Rodrigo Duterte in 2016 and the incoming administration of Ferdinand Marcos Jr. in 2022. In 2016, the country did not recover from the epidemic and the economy was at its best in health with a strong economy, low inflation, high employment and low national debt. This is exactly the opposite in 2022, which makes it challenging for the incoming administration of Mr. Marcos Jr.
The new administration will need all the support it can get by the end of this year and in subsequent years.
The country needs to pursue and attract more investment in order to create employment and livelihood opportunities, provide income, increase productivity and make a profit.fiT future generations.
The war between Russia and Ukraine has resulted in tightening of oil supplies and, with all external pressures fiThe scale of the global impact of the epidemic, among others, will be crucial for the recovery of all Filipinos and our country over the next six years. All sectors of society should actively participate, hold our new leaders accountable for their decisions, and focus on our all-encompassing goal of inclusive and sustainable economic recovery.
Victor Andres “Dindo” c. Manhit is the founder and CEO of Stratbase Group