SoNA checklist: Winning economic tug of war

The Philippines will become a trillion-dollar economy by 2033 and surpass France to become the 14th largest economy globally by 2075

The Philippines is at a pivotal moment as President Ferdinand Marcos Jr. celebrates his second year in office, with ambitious economic goals setting a dynamic path forward.

While challenges like inflation and poverty remain, these issues highlight the complex landscape Marcos is navigating, with promising strides on the horizon.

In a recent economic forum, a Department of Finance (DoF) official shared an optimistic outlook for the country’s future.

The Philippines is poised to reach “uppermiddle income status by 2025, reduce poverty for 14 million Filipinos by 2028, and emerge as the 13th largest consumer market in the world by 2030.”

Looking even further ahead, the official projected that the Philippines will become a trillion-dollar economy by 2033 and surpass France to become the 14th largest economy globally by 2075.

While the scale of these targets reflects the administration’s economic idealism, their impracticality about everyday Filipino life points not just towards an unsettling narrative — they speak largely about a rather revealing tale of Philippine economic discontent.

High inflation

Inflation has been one of Marcos’ first economic issues since he became the President.

Prices of goods flared up as inflation stayed above the 2 to 4 percent target range for 20 months following his inauguration. However, Marcos’ economic managers were able to tame the headline inflation and returned to the target range in December 2023.

As of June 2024, headline inflation for all income groups eased year-on-year to 3.7 percent from 5.4 percent in June 2023. In June 2022, inflation settled at 6.1 percent.

For the Magistrado family, the impact of inflation are all too real. Khariz Magistrado, a 35-year-old mother of two who works as an accountant in one of the firms in Bonifacio Global City (BGC), noted how the soaring prices of goods affected their finances.

“Prices for basic goods have gone up so much. We used to manage our funds on both my husband’s main income and my full-time salary alone. Now, prices have gone up so much that we found ourselves struggling to pay for essentials like food and medicine,” Magistrado told DAILY TRIBUNE in a Viber call.

Despite the financial struggles due to inflation, Magistrado noted how economic managers have tamed the country’s inflation.

As an accountant with a macroeconomy background, Magistrado said she understood the concept of “sticky inflation.”

Sticky inflation is where consumer prices and wages do not respond immediately or fully to changes in supply and demand in the economy.

In a speech during the Vin d’honneur at Malacañang on 12 June, Marcos praised his economic team for a ‘good job’ in taming inflation.

“Nonetheless, I think that we have done a good job,” he added. “It is a very large improvement from what we were under — the situation that we were under maybe a year ago.”

Marcos said that a small economy like the Philippines could not influence global price trends, which was the cause of the excessive inflation.

Affordable shelter

Housing affordability is another major issue under the Marcos’ administration. A study from the Philippine Institute for Development Studies (PIDS) showed that many Filipinos desire suitable homes near their workplaces but cannot afford the monthly mortgage payments.

Data from the Bangko Sentral ng Pilipinas released on 28 June showed that the prices for housing units surged by 6.1 percent in the first quarter.

Duplex houses saw a staggering 36.2 percent price jump, while condominium units rose by 10.2 percent, pushing home ownership further out of reach for many Filipinos.

“We have been looking for a home for over a year now, but the prices keep going up and the available options are either too far from our work or too expensive. It feels like the dream of owning a home is slipping away,”

Roberto Garcia, a 42-year-old office worker, told DAILY TRIBUNE in a call.

Housing units “will become more affordable” as a result of Marcos’ decision to inventory public lands that may be used for the government’s flagship housing initiative, according to Secretary Jose Rizalino Acuzar of the Department of Human Settlements and Urban Development (DHSUD).

With the issuance of Administrative Order 21, on 30 April, an inter-agency coordinating committee was established with the responsibility of compiling a master inventory of government lands that are idle, abandoned, or otherwise suitable for development into housing communities for recipients of the Pambansang Pabahay para sa Pilipino (4PH) program.

For the Marcos administration, using government-owned land as locations for the socialized housing program is one way to address the primary concern that could undermine the project’s viability, which is cost.

Kadiwa stores

In response to the economic challenges, the Marcos administration has revived the Kadiwa ng Pangulo program, which aims to provide affordable goods directly to consumers.

Originally launched during Marcos Sr.’s era in the 1970s, the reincarnated program has been introduced with the hope of alleviating some of the economic pressures faced by Filipinos today.

While Kadiwa offers some relief, some Filipinos said it is not a panacea for the nation’s broader economic issues.