By Tony Lopez
On June 12, 2023, at the 125th anniversary of the Philippine declaration of independence, President Ferdinand “Bongbong” Romualdez Marcos Jr. pledged before the nation nearly impossible goals.
“We will strive to remove the unfreedoms. We will aim to feed the hungry, free the bound, and banish poverty,” the 64-year-old chief executive boldly told his countrymen.
Per United Nations data, every day, 95 children in the Philippines die from malnutrition. Twenty-seven out of 1,000 Filipino children do not get past their fifth birthday. A third of Filipino children are stunted, or short for their age. Stunting after 2 years of age can be permanent, irreversible and even fatal.”
Moderate hunger
Per the 2022 Global Hunger Index, Philippines ranks 69th out of the 121 countries with sufficient data to calculate 2022 GHI scores. With a score of 14.8, Philippines has a level of hunger that is moderate.
In the Philippines, 18.1% of the population lived below the national poverty line in 2021. For every 1,000 babies born in the Philippines in 2021, 26 died before their 5th birthday.
Poverty incidence to be halved
The Bongbong Marcos (BBM) administration aims to halve poverty incidence to 9%, or to even 8%, by the end of its term in June 2028. That means up to 12 million Filipinos will be rescued from poverty by the President. Instead of having 23.94 million Filipinos earning below $2 a day in 2021, the very poor, we should have only 12 million Filipino poor—9% of an expected population of 135.6 million by 2028.
Ultimate emancipation
For an emerging economy like the Philippines, freedom from malnutrition, hunger and poverty is the ultimate emancipation. No president before Marcos Jr. had done it. Yet, he is promising it.
Why the confidence? Marcos Jr. thinks he can mobilize the resources to give his countrymen the ultimate in freedom.
By freeing them from hunger, malnutrition and poverty, the President shall have given Filipinos the ultimate freedom –the freedom of choice. Free to choose their leaders, free to choose options to fight obstacles and adversities, and free to live where they want to enjoy life’s blessings.
Diaspora
Today, more than 12 million Filipinos live abroad, a remarkable diaspora of the unrich and the unfree, victims of unfreedoms.
A third of 24 million households in the Philippines have single parents. The other parent is gone, abroad, because he or she has no freedom of choice in the Philippines, to choose a decent, well-paying job, to choose the food they want to eat, to choose the education their children must have, and to choose a lifestyle that is comfortable, safe, and secure.
“Through wise policies, we will foster a highly conducive and enabling environment in which the exercise of true human compassion shall allow for the full development of the Filipino,” Marcos Jr. said June 12 at the Luneta.
“We have laid down the Philippine Development Plan (PDP) for the next six years. We will implement such with vigor and with consistency,” the President promised.
With remarkable bravado, Marcos Jr. vowed: “I have said it before, I shall say it once more: I will be with you on that long and uphill road to achieve our dream of freedom – freedom from hunger, freedom from neglect, freedom from fear.”
The freedom goals
In the PDP, the main goals are:
Maintain annual economic growth rate between 6.0 to 7.0% in 2023 and between 6.5 to 8.0% from 2024 to 2028.
Sustained high levels of growth is a necessary condition to meet the AmBisyon Natin 2040.
Create more, better, and more resilient jobs.
By 2028, the unemployment rate shall be within 4.0 to 5.0%, and the percentage of wage and salary workers in private establishments to total employed shall be within 53 to 55%.
Keep food and overall prices low and stable.
Expanding the opportunities available to Filipinos must be complemented by efforts to protect people’s purchasing power. Food and overall inflation will be kept to within 2.5 to 4.5% in 2023 and within 2.0 to 4.0% from 2024 to 2028.
Transform the production sectors through innovation.
The Philippines aims to continue its progress among the innovation achievers of the region by ranking higher and within the top 33% of the Global Competitiveness Index by 2028.
Maharlika Fund to the rescue
Albay Second District Rep. Joey Sarte Salceda says the main development goals are achievable or do-able. “The Maharlika Investment Fund is the super power tool of development, a weapon of massive development,” he asserts.
He reckons that with just P44 billion of start-up fund, the MIF can parlay up to P7 trillion of investment funds.
That kind of initial money is enough to buy up energy assets –generation plants, transmission systems, retail outlets to help reduce the electricity shortage; other assets that can remedy many of the shortages afflicting the country today, and production assets that can make the Philippines again an export powerhouse. And also, bring the Philippines instantly, into the digital age, the ultimate in inclusion.
High electricity rates
The Philippine electricity rate is one of the highest in the world. Power is up to 20% of production cost; labor is 15%. High power cost and high wages make the country uncompetitive as a production hub of multinationals.
Because of the severe shortage after then President Corazon Aquino mothballed the $2 billion 1,200-megawatt Bataan nuclear plant in 1986, the Philippines missed three major waves of foreign investments that flowed into Southeast Asia in the last 30 years.
Missing the FDI boat meant the Philippines being left behind, dismally, in development by Thailand, Singapore, Malaysia, Vietnam, and Indonesia. Til year 1970, Philippine exports, at $300 million year, were 10 times those of South Korea, Taiwan, Hong Kong and Singapore.
PH once led in reserves
Philippine foreign reserves, at $230 million in 1970-1973, were more than that of China, $70 million; Korean $80 million; Thailand $80 million; Malaysia $180 million; and Indonesia $170 million. Only Singapore was bigger, $360 million.
Reserves are a country’s checking account against which are charged the importation of items like food, raw materials, machinery and equipment to feed the hungry and keep factories humming. They are also used to service debts, remit foreign profits, and finance travel and overseas investment.
Today, China has $3.4 trillion reserves, South Korea $423 billion, Singapore $289 billion, Thailand $225 billion, Indonesia $140 billion, Malaysia $114 billion, and the Philippines, $101 billion.
Filipinos used to be the richest in ASEAN
In the 1960s, Filipinos were the richest ASEAN nationals. Today, in per capita income measured by purchasing power parity or what the US dollar can buy in local goods, Singaporeans are the richest, with $116,487 per capita PPP income.
Thais, who we taught how to plant rice, have per capita PPP of $19,209; and the Indonesians, whose literacy is half ours, have $13,099. Filipinos? They have $9,175.
Vehicle for economic growth
Meanwhile, in a joint statement, the economic managers of President Marcos Jr. called the Maharlika Investment Fund (MIF) or the Maharlika Investment Corp. (MIC) “the vehicle for economic growth”.
The economic managers are: Finance Secretary Benjamin Diokno, Budget Secretary Amenah Pagandaman, Economic Planning Secretary Arsi Balisacan, and Bangko Sentral Governor Felipe Medalla.
Among their reasons:
1.The MIF is aligned with the Medium-Term Fiscal Framework (MTFF) and the 8-Point Socio-economic Agenda. It also operationalizes the Philippine Development Plan 2023 – 2028.
PDP calls for strategies to “diversify and explore alternative sources of financing…. New instrument formats will also be explored to reach new markets and investors.”
Senate Bill 2020’s legal framework (adopted by the House)—follows fundamental principles of economic policy and financial market participation for the ultimate benefit of the Philippine economy and the Filipino people.
3. The Maharlika Investment Corporation (MIC) and the MIF aim to execute and sustain high-impact infrastructure and development projects, ease fiscal constraints, and maximize expected returns for our country’s investments.
The objectives are clear: to invest funds available in government instrumentalities and utilize “to promote economic growth and social development.”
Investments
MIC’s investments must generate high returns so that national wealth is expanded and profitable socio-economic projects are financed and implemented.
These include investments in financial instruments, real property, and both physical and digital infrastructure.
MIF, along with reform of the military and police pension fund, “will allow our nation to move away from reliance on foreign and domestic loans to fund our annual budgetary requirements and will move us closer to self-sustainability in sourcing financial requirements.”
NDC role
The economic managers said “while other development institutions such as the National Development Company have the mandate of pursuing commercial, industrial, and agricultural mining ventures to assist the private sector in undertaking vital projects, the MIC is created for the optimization of government financial assets and the promotion of intergenerational wealth, through investments and other wealth creation measures.”
“The MIF is expected to widen the fiscal space in the near- to medium -term as it reduces heavy reliance on local funds and development assistance as the main financing mechanisms for infrastructure projects. By providing an alternative source to public infrastructure spending, there would be a bigger budgetary allowance for other priority expenditures,” the managers said.
Investing in the MIC will allow GFIs (government banks) to possibly obtain medium- to long-term returns that are higher than their 10-year average return.