Prof. Dindo Manhit, President, Stratbase ADR Institute
President-elect Ferdinand “Bongbong” Marcos Jr. identified the Philippine economy as his number one priority. Specifically, this includes increasing public-private partnerships, continuing President Duterte’s flagship “Build, build, build” infrastructure program, improving the Philippine power sector to boost the country’s industrialization, ensuring the proper collection of taxes and duties, and strengthening partnerships with other countries to achieve recovery post-pandemic. He has also stated that he will welcome more investments from the United States.
A few weeks after his landslide victory, Marcos Jr. announced that he would look into the 2023 national budget to fund a proposed stimulus measure for his administration’s plans. In particular, he intends to move some public expenditures to more investment-led expenditures to retool the economy.
Incoming budget secretary Amenah Pangandaman said Marcos Jr. recently tasked her to ensure that the following sectors will be prioritized in next year’s national budget, which will be passed under his administration: agricultural and food security, climate change adaptation, economic recovery, improved health care and education, enhanced infrastructure projects including digital infrastructure, utilization of renewable energy sources, strengthened tourism, jobs creation, and sustainable development.
Indeed, public and private investments in various sectors—ranging from infrastructure and transportation to health and other social services—are the way to move forward.
Marcos Jr. is set to inherit economic reforms that were passed into law during the term of Mr. Duterte. These include the Corporate Recovery and Tax Incentives for Enterprises Act—the second package of the Duterte administration’s Comprehensive Tax Reform Program that seeks to improve the country’s competitiveness and ability to attract highly desirable investments—as well as the amendments to the Retail Trade Liberalization Act, Foreign Investments Act, and Public Service Act, which were intended to liberalize the Philippine economy by easing foreign investment rules.
Benjamin Diokno, the outgoing Bangko Sentral ng Pilipinas governor who will soon take the reins as finance chief, described these as “game-changing reforms that would make the Philippines a preferred investment destination by investors.” These investment-friendly pieces of legislation, coupled with the country’s strategic location and young working population, would make it easier for foreign investors to conduct business in the Philippines.
Investments in infrastructure could exponentially boost greater fund inflows in the years to come. According to the Asian Development Bank (ADB) in its report in 2005, “Investments are naturally attracted to areas with adequate roads, ports, and other essential infrastructure.” In 2019, the ADB also said that “Raising investment, particularly in infrastructure, would allow the country to reap the dividends of its young and growing population.”
Further, investing in the population’s social welfare—particularly in terms of health and education—can ensure a healthy, skilled, and competent workforce.
At this point, positive developments have been observed in the Philippine economy as the unemployment rate continues to fall, GDP numbers have remained far from the grueling contractions at the height of the pandemic, COVID-19 infections have been controlled, and pandemic-induced industry and movement restrictions have been significantly eased.
Sustaining these gains requires extraordinary measures that even future generations will enjoy and benefit from.
As one of the prime drivers of sustainable economic growth and development, investments could be pursued through heightened collaboration between the government and the private sector.
The passage of market-friendly policies—alongside meaningful industry partnerships, good governance, and a clear direction from the country’s top leadership—is crucial.
This article was originally published in the Philippine Daily Inquirer Commentary.