Economic growth with growing ‘opposition’

The US-Israel war against Iran seems to be bringing back the doubts of Filipinos that are almost as bad as during the COVID-19 pandemic. The Duterte government failed in political execution, although the economic design was correct at the time.

There’s a Keynesian stimulus that we saw in legislative acts regarding Bayanihan packages. But is it right for economists who follow in the footsteps and models of John Maynard Keynes to rejoice in this?

Two things: First, the country’s direct fiscal stimulus was small compared to its neighbors in Southeast Asia and, second, most of the stimulus packages were in loans and guarantees, so how can that be considered direct spending?

In 2020, the (positive) +5-6% growth in our Gross Domestic Product (GDP) was not sustained but immediately plunged to (negative) -9.6%. (The recovery occurred in the last 1 1/2 years of then-President Duterte, and it continued gently in the first three years of President Marcos Jr.’s tenure at an average of +5.2%. 

Of course, it’s only right for the State to be active in spending in dealing with the pandemic. But despite the Keynesian elements, the effect of the stimulus on the economy was not enough. What should have been immediate aid through the distribution of the Social Amelioration Program (SAP) took too much delay or inabot ng siyam-siyam. Oh, we still remember the equally delayed declaration of bawal maglabas-pasok that later led to our being known as one of the countries with the longest COVID-19 lockdowns in the world. Assistance to those in dire need in the form of cash transfers and wage subsidies was also slow. 

It was quite fast in business support; there was a big boost to households and firms to keep demand from collapsing and have aggregate demand. Ultimately, the aggressiveness of Keynesian stimulus was lacking. 

Making the matters worse were issues of bureaucratic inefficiency and corruption (i.e., overpriced PPE, procurement controversies, and mismanaged public spending). But again, these were problems of governance which were not economic theory-related.

Balik-Duterte means Balik-ICC, Drilon tells Marcos Jr.

“Being Frank: A Memoir” author, long-time legislator, and former Senate President Franklin Drilon respectfully calls on the current president to lead the government in rejoining the International Criminal Court.

It need not have Senate approval, Drilon argues, as the 2011 ratification of Senate Resolution No. 57 still has force and effect. He adds it was the previous administration of “a Duterte” that decided to withdraw, so there’s no new Senate concurrence needed, but a mere executive action to be led by Marcos Jr. himself.

A Duterte comeback will need the Philippines’ return to the Rome Statute, Drilon says. But the main reason is that it is our best way to battle impunity, with the ICC acting as a court of last resort when our justice system fails.

2028 leader: ‘Somebody who understands economics’

In a chat with ASEAN Editors and Economic Opinion Leaders Forum, Marcos Jr. says: “(Very) soon after COVID, the discussion around ASEAN was that we have to learn from the lessons of COVID. One of the great lessons that we had to do was to make supply chains more robust. And that’s what we were going about… our supply chains to our trade partners around the world. And with all the things that have happened, the effort to make those supply chains more robust and stronger have really run into great obstacles. And so there has been a joint understanding between member states, let’s do it ourselves first. And so, the supply chains within ASEAN should be strengthened. The way we do business with one another should be strengthened. I came upon a statistic where the business, the commerce, the trade that ASEAN does is only 23 percent. I think that’s the number, about 23 percent intra-trade. The rest of the 77 percent is outside of ASEAN, countries going outside of ASEAN.”

Talking about the Philippines’ “dynamic growth story,” he’s asked who should succeed him. Marcos Jr. hints: “Well… Number one, somebody who understands economics… That’s the first thing. That’s the life of the person who understands how to create jobs, who understands how to keep the inflation rate down, who understands how to make food supply a given, something that you can assume. So… somebody who thinks about productivity, because growth is about productivity.

“How do you make your working population more productive? How do you support them so they work better? How do you fix the education system so they’re better trained? How do you make sure that they’re healthier? How do you make sure that they don’t worry about food? Those are the kind of people that (we) need… people who actually are thinking about not politics, but how to make the country better.”

He also listens to the pre-recorded address of ASEAN Secretary-General Kao Kim Hourn, who highlights the importance of building an informed and forward-looking media ecosystem that will support regional development and unity.

Hourn encourages the media to spread the story of development and cooperation in the Southeast Asian Nations, so that people can better understand the benefits of economic and regional integration.

What’s really urgent? That real opposition

“The government must act swiftly to protect the public from the global oil crisis. If left unaddressed, inflation becomes more than an economic statistic, it becomes the real opposition to the status quo, further eroding people’s patience, security, and trust,” reads Ronald Llmas’ post on social media.

The Marcos Jr. administration also needs to ensure a clear plan to prevent inflation from eventually causing public distrust, and this plan has to be from short-term relief for the people to long-term energy reforms.