Marcos Pitches ‘New Philippines’ Plan With Nod to Father’s Rule

Andreo Calonzo and Ditas Lopez
Sat, July 22, 2023

(Bloomberg) -- Philippine President Ferdinand Marcos Jr. will lay down his priorities for the coming months on Monday, closing out his first year in power marked with policies throwing back to his father’s two-decade rule.

Marcos has said he plans to use his second State of the Nation Address before Congress to present a performance report to the public. Days before his speech, his administration set the tone with a slogan: “New Philippines.”

The president has to steer one of Asia’s best-performing economies amid a bleak global outlook and domestic challenges that include off-target inflation and elevated borrowing costs. Marcos has consistently retained wide support from Congress and the public, giving him leeway to push his agenda.

“Marcos’s main reason seems to be trying to restore the name of his father,” said Ateneo de Manila University economics professor Leonardo Lanzona. “He’s saying that a lot of the programs of his father were not accomplished, so he’s trying to bring them back.”

Several of the Philippine leader’s choices and programs echo those of his father, the late dictator Ferdinand Marcos. For one, his secretaries for the agrarian reform and migrant workers are scions of the elder Marcos’s ministers.

Marcos has also taken a page from his father’s playbook as agriculture chief. One of his flagship programs called Kadiwa — where the state helps sell farm products directly to consumers — was first implemented in the 1980s when Marcos Sr. was in power. Also being revived are rice production and food stamp programs.

Last week, President Marcos signed a law creating a sovereign wealth fund that’s a throwback to the strongman. Its name “Maharlika,” the local word often attributed to nobility, is reminiscent of a guerilla unit that the Marcos Sr. supposedly led — a claim historians have since debunked.

Prices, Pension

Still, the president will need to address current challenges including the risk of El Nino rekindling inflation, said Domini Velasquez, chief economist at China Banking Corp.

“Short-term, addressing inflation concerns should still be top priority,” Velasquez said, adding the risk of prices going up remains. The government should also accelerate its infrastructure push to improve logistics, reduce costs and lower constraints to businesses, she said.

Reforming the military’s pension system is another priority for Marcos, Defense Secretary Gilberto Teodoro said. The nation risks a “fiscal collapse” if the state continues to fully fund soldiers’ pensions, finance chief Benjamin Diokno earlier warned.

This reform is among the 20 measures the administration is targeting to pass in Congress. Other legislative priorities include taxing internet transactions, improving the ease of paying taxes, and amending the bank secrecy law to strengthen checks against tax evasion and money laundering.

A mention of military pension reform, along with measures addressing inflation, in Marcos’s speech “could provide a signal to the markets that the macroeconomic fundamentals of the Philippines economy may improve,” HSBC Holdings Plc economist Aris Dacanay said.