黑料社

MANILA, Philippines鈥擨n over a month from now, President Rodrigo Duterte and his administration will pass the torch to the next administration. Among the things to be passed on is the country鈥檚 economy, which has suffered following the COVID-19 pandemic.

Presumptive president Ferdinand 鈥淏ongbong鈥� Marcos Jr.鈥攚ho remains the frontrunner in the 2022 presidential race with 31 million votes as of May 13 based on partial and unofficial results 鈥攊s expected to take over and lead the country as Duterte鈥檚 term as president ends on June 30.

READ: 鈥楩ilipinos have spoken鈥�: Marcos camp declares victory in presidential race

As the public awaits Marcos Jr.鈥檚 economic plans, experts have already shared their thoughts on the country鈥檚 economic situation鈥攚hich they believe is in a solid shape鈥攁s the outgoing administration prepared to step down.

READ: Investors keen to see Marcos鈥� agenda in first 100 days

Passing the torch: Sound PH economy

For Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas (BSP), the next administration is set to inherit a 鈥渕uch better economy鈥� from the outgoing administration.

鈥淭o me, the next administration will be inheriting a sound tax system, which we reformed many times under this administration,鈥� said Diokno in an interview over ANC last May 2.

鈥淚t will also be a recipient of many structural reforms like the amendments of the retail trade act, the foreign investment act, and public services act,鈥� Diokno said.

鈥淚n other words, this administration will inherit a much better economy than what we inherited from the previous one,鈥� he added.

When the late President Benigno Aquino III鈥檚 term ended, the country鈥檚 gross domestic product (GDP) for the first quarter of 2016 was 6.8 percent.

In the same period this year, under the Duterte administration, the GDP was at a higher 8.3 percent.

Diokno, however, noted that the next administration will also have to face and address an 鈥渋ncrease in public debt as a result of the pandemic.鈥�

In 2020, the Philippines suffered a 9.5 percent drop in gross domestic product (GDP)鈥攖he biggest since the government started recording yearly output in 1946 or after the Second World War.

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In 2021, however, the Philippine economy鈥檚 full-year growth bounced back and reached 5.6 percent following the easing of COVID-19 quarantine rules.

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鈥淏efore the pandemic the debt to GDP ratio of the Philippines was at the neighborhood of 39.6 percent. Now it rose to 60.5 (percent) because of the COVID-19 response and the accompanying drop in revenues,鈥� said Diokno.

鈥淏ut this level is pretty much manageable as long as we continue to grow at between 6 to 7 percent in the next few years,鈥� he continued.

What the Duterte admin will leave behind

Contrary to Diokno鈥檚 statement, however, ING senior Philippine economist Nicholas Antonio Mapa stressed that the 2022 economy that Marcos Jr. is inheriting 鈥渋s not the same鈥� as the fast-growing economy that Duterte inherited from Aquino in 2016.

鈥淭he 2022 Philippine economy that [Marcos] is inheriting is not the same as the 2016 Philippine economy that Duterte inherited,鈥� Mapa told the Inquirer.

鈥淭here have been reforms in terms of legislation but the macroeconomic story is not as rosy as it was,鈥� he added.

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Data from the Bureau of the Treasury (BTr) showed that from the outstanding debt amounting to P4.6 trillion in June 2010鈥攊nherited by the Aquino administration from its predecessor鈥攖he national government鈥檚 total debt grew to P5.9 trillion by the end of Aquino鈥檚 six-year term.

This means that the net addition to the country鈥檚 debt under Aquino鈥檚 administration, from July 2010 up to June 2016, stood at P1.4 trillion.

On the other hand, under the Duterte administration that inherited the previous administration鈥檚 P5.9 trillion outstanding debt, the running total ballooned to P11.7 trillion by end of 2021.

The government has increased its borrowings to finance its pandemic response. This includes the procurement of COVID vaccines, among others.

The national government鈥檚 outstanding obligations further climbed to a new high of P12.7 trillion in March, which was attributed to the P457.8 billion raised from five-year retail treasury bonds (RTBs) that month.

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The Duterte administration, compared to its predecessor, contributed a higher net addition to the country鈥檚 outstanding debt鈥擯5.8 trillion (based on outstanding debt by end-2021) and P6.8 trillion (based on end-March outstanding debt).

The country鈥檚 debt-to-GDP ratio meanwhile stood at 60.5 percent in 2021 and 60.9 percent in March, both of which were slightly higher than the 60 percent threshold considered manageable by multilateral lenders for developing countries.

Still, the BTr said last year that 鈥渢he current and projected debt levels of the Philippines are still sustainable, leaving some policy flexibility to absorb debt in case of further adverse shocks.鈥�

The country鈥檚 ballooning debt, however, might not be inherited by the next administration alone.

Ibon Foundation estimated that the country鈥檚 P11.7 trillion debt translates to P106,093 in debt for each of the 110.5 million Filipinos and P473,935 in debt for each of 24.7 million families in the Philippines in 2021.

The figures were higher than P58,252 in debt for each of the 102.1 million Filipinos and the P261,861 debt for each of 22.7 million families in 2016.

READ: Paying record-high PH debt: Duterte team sees higher, more taxes as way out

Labor force situation

Also included in the 鈥渕uch better economy鈥� to be inherited by the next administration will be the Philippine labor market, which, based on data, has started to show significant improvements after getting hit by the impact of the COVID-19 pandemic.

The National Economic and Development Authority (NEDA) on May 6 announced that the country has tallied a new record-low unemployment rate since the start of the pandemic.

Based on data from the Philippine Statistics Authority (PSA), the country鈥檚 unemployment rate was 5.8 percent in March. Meanwhile, the employment rate was 94.2 percent and the underemployment rate was 15.8 percent鈥攚hich showed that more employed workers expressed desire to have additional work.

More Filipinos have joined the labor force amid the increased mobility and the government鈥檚 effort to reopen the economy.

鈥淭he country鈥檚 labor force participation rate continued its uptrend from 63.8 percent in February to 65.4 percent in March 2022, which is also the highest since the pandemic began,鈥� NEDA said in a statement.

鈥淭he March labor force survey results reflect the gains from moving around 70 percent of the economy to alert level 1. As we continue to manage the risks, we reiterate our recommendation to shift the entire country to alert level 1 to generate more employment and strengthen the domestic economy against external shocks,鈥� said Socioeconomic Planning Secretary Karl Kendrick T. Chua.

Advice for the next administration

With the challenges that will be inherited by the new president, Diokno suggested that the new administration should present a 鈥渇iscal consolidation program鈥� to the people and to the international community鈥攚hich would explain what they will do in the next three years to reduce the deficit and debt-to-GDP ratio which has increased because of the pandemic.

鈥淭he framework should include timely and efficient implementation of the tax laws and the recent amendments鈥攖he retail trade act, foreign investment act and public service鈥攅fficient allocation of budgetary sources by continuing the Build, Build Build program and investment at human resources, then improving the tax spending mix of the local government units鈥攖his is very important because LGUs now have more resources鈥攁nd lastly, this is the elephant in the room, rationalizing the pension benefits of retired military personnel,鈥� said Diokno.

Meanwhile, the Economic Development Cluster (EDC) chaired by Finance Secretary Carlos Dominguez III said it hopes that the next administration will be able to address the 鈥渉eadwinds facing the economy鈥濃�攕uch as geopolitical uncertainties, inflation, and the lingering effects of the pandemic鈥攁s they replace the outgoing administration.

鈥淭he next administration must ensure that the debt accumulated is going to be a smaller part of our gross domestic product (GDP). To achieve that, the economy needs to grow at a rate higher than 6 percent as done by the Duterte administration,鈥� the EDC said.

鈥淭his objective has become more attainable with the important reforms in place such as the amendments on the Retail Trade Liberalization Act, the Foreign Investment Act, and the Public Service Act, as well as the infrastructure program,鈥� the EDC added, referring to 鈥淏uild, Build, Build鈥� aimed at ushering in a golden age of infrastructure after many years of neglect.

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