Ferdinand Marcos Jr.’s ovewhelming victory in the 2022 election more or less, ends the saga of Aquino versus Marcos. Imagine how we wasted thirty-six years on that narrative. I was 20 years old when Marcos was ousted. I will be turning 56 next month. I represent that generation which waited it out that long.
So what’s next for the Philippines from 2022 to 2028?
From the beginning, our problems have always been structural. Maybe it would have been different had the Americans not bought the colony lock, stock and barrel from Spain in 1898. The Malolos Constitution put in place a parliamentary government. The other factor in this equation was how our leaders then would have ruled if they had the reins of power.
What effectively crippled the Philippines was the devastation in World War II which the Americans nevery paid for. The damage to the whole country was estimated at $8B. The Americans charged the Japanese only $800M. They also did not give enough aid to the Philippines for rebuilding. Not unlike Japan, which they strongly supported. Europe, had the Marshall Plan. We may have gained “independence” in 1946, but in truth and in fact, we were still a US colony. The only difference was it did not cost Uncle Sam as much to keep his bases in the country.
Our next masters were our own countrymen. The ilustrados, the elites who ruled the country together with the colonial masters. After the war, their focus was on rebuilding their lost fortunes. Not the country. And so it was not until 1965, when Marcos was elected President, that a long-term development plan was put in place and the real work of rebuilding began.
We all know what happened next. It would only be after thirty years that Cory and her cohorts would be out of power. Duterte has shown what can be done within the system with a President who uses his power wisely. An outsider and a provincial hillbilly at that, is what it took for Filipinos to realize that what we really need is less democracy and more action.
A Marcos is President again at the most inopportune time. There is still a pandemic and the proxy war in Europe and the race between the US, China and Russia as to who becomes the top hegemon has the world reeling from inflation, due to the disruption caused by the pandemic and the war between Russia and Ukraine.
High interest rates, inflation, a possible escalation of the war in Europe and continuing food supply shortage loom in the horizon, including the probability of the global economy going into a period of stagflation, because of the foregoing mitigating factors.
The peso broke the P54.00 mark against the dollar yesterday on account of the Fed rate hike of 75 basis points. If the pattern holds true, every 75 basis points rate hike by the Fed results in a P1.00 devaluation. This makes for another tenuous situation with increasing debt service and an additional burden on oil imports.
There is not much the country can do against external factors. Yesterday Marcos held a brief press conference to announce that agriculture is getting top priority in light of all these economic developments and he has decided to hold the post of Agriculture Secretary in a concurrent capacity when he takes office on June 30.
Unfortunately, the worst is not yet over. It remains to be seen how high itnerest rates need to go up for US inflation to go back down to a manageable level. There is no end in sight in the Russia-Ukraine conflict. Most of Europe is reviving their coal power plants as the gas from Russia stops flowing in the pipeline. The European Central Bank itself is in a quandary as the EU is more complicated to manager in terms of interest rates on public borrowings. There are member countries such as Spain, Italy and Greece whose economies need to be carefully managed given their current fiscal positions.
Marcos is taking the bull by the horns with his taking over the agriculture portfolio. At this point in time when Thailand and Vietnam are holding back rice exports, he needs to act decisively in order to stop the price from spiraling out of control. It remains to be seen if Marcos will make the rice cartel toe the line like FEM did during his time. This and improved rice production and increased agricultural productivity as a whole, is what the country needs in order to weather this serious economic storm.
Marcos is not listening to any of the politicians who are calling for a suspension of the excise tax on petroleum products. He said the government will provide subsidies to those directly affected. Suspension of the excise tax will not specifically benefit those the most in need and the government needs the revenues to keep flowing.
The bigger challenge of Marcos is getting the oligarchs to put their money where their mouths are and invest in the country instead of spriting it away abroad. Marcos made it clear during his presser that foreign direct investment will not come in until such time other reforms are in place such as the minimization of red tape and corruption and lower power costs.
Marcos is on the right track insofar as his statements are concerned. What remains to be seen is the implementation and execution of the strategy he and his Cabinet will come to. They have their work cut out for them and it is reassuring that the team he has assembled can hit the ground running on day one of his Presidency.
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