A (PRO) BUSINESS-AS-USUAL ROAD AHEAD

Reflections on Ferdinand Marcos Jr.’s First State of the Nation Address (SONA)

2022 July 28

 

By Focus on the Global South Philippines Team

 

Ferdinand R. Marcos Jr., son and namesake of the late dictator, ended his much anticipated inaugural SONA with his assessment that “the state of the nation is sound.” Those words cemented what was becoming crystal clear throughout his speech that lasted more than an hour: that Mr. Marcos Jr. was in fact addressing not the entire country, not even his supporters who voted for him—giving him a huge mandate to steer this country out of multiple crises—but the local and international business community, and the political and economic elites of this country.

Restoring the Marcos brand

Marcos Jr. walked towards the newly refurbished plenary hall of Batasang Pambansa Complex—the current seat of the House of Representatives of the Philippines constructed during the period of his father Marcos Sr. for the then-unicameral parliament—to the tune of “Pilipinas Kong Mahal,” (Philippines, My Philippines) an old patriotic hymn appropriated by the Marcos dictatorship, as if to trigger the hypnosis that was about to follow.

There were two main messages in Marcos Jr.’s SONA: One, a more direct message to the business community that economic fundamentals are strong and sound, and that with experts at the helm, the elites can weather the crisis. A second, more subtle, and somewhat subliminal political message was also conveyed: The Marcoses are back in power! While there were no direct references to his father’s reign in his SONA unlike in his inaugural speech at the National Museum last month, the policy prescriptions, the tone of his voice, the calibrated shifts from English to Tagalog at certain parts of the speech, the marching orders to his cabinet are all reminiscent of the father, and in keeping with the Marcos brand.

The challenge before the new administration is huge: Rising inflation, looming food crisis, ballooning debt, widening budget deficit, not to mention the climate emergency and the decline of democracy and human rights. While there was a recognition at the beginning  of the speech of the “difficult times” ahead due to “forces of our making and others beyond our control,” the proposed solutions he outlined in his SONA portend a business-as-usual response to these problems.

Economic (numb)ers and tired pre(script)ions

As expected, Marcos Jr. harped on the high growth projections shared earlier by Finance Secretary Benjamin Diokno: 6.5 to 7.5% real gross domestic product (GDP) growth in 2022; 6.5 to 8% real GDP growth annually between 2023 to 2028. According to Diokno, these figures represent the highest growth rates among all ASEAN+3 countries this year and next year. Propelled by high growth, poverty rates will finally drop to around 9% (single digit) by the end of his 6-year term. The Philippines is poised then to attain the long held aspiration of becoming an upper middle income country by 2024.

He laid down the target to limit national government debt-to-GDP ratio to less than 60% by 2025 but chose not to report that the previous administration of his ally Rodrigo Duterte, left office in May 2022 with a national debt amounting to ₱12.5 trillion, a 111% increase from when they took over in 2016.

While commitment towards fiscal consolidation was expressed, there was no mention of the budget deficit of ₱149.9 billion in June last year that widened to ₱215.5 billion in the same month this year that shows the extent of the problem. The new administration hopes to address the deficit by improving revenue collection, through tax reforms, an already existing program from the Duterte administration; and realigning expenditure priorities supposedly to address the impact of COVID-19 and to prepare for future shocks.

While the litany of economic data and jargon strove to convey his know-how and competence in facing up to the economic challenges, Marcos Jr. came off as someone who does not deeply understand the real issues and is detached from the realities on the ground. There was  no recognition of the impact that the economic downturn resulting from the pandemic has had on jobs and livelihoods and the strain on households from high commodity prices. There was no acknowledgement that the working classes continue to struggle to make both ends meet.

In his inaugural speech last June 30, Marcos Jr. talked about searching for promising approaches and better than the usual solutions, and he promised to outline “how he will get things done’ in his SONA. What we heard however are the same old prescriptions: re-opening the economy, broad economic liberalization, sustaining growth, more foreign investments, incentives for corporations, expansion of infrastructure development, public-private partnerships, and regressive tax reforms.

These policies need to be unpacked to see the impact on the lives of the poor and marginalized. For example, the latest Social Weather Stations (SWS) Survey on self-rated poverty showed that 43% of Filipinos, numbering around 10.9 million rated themselves as “poor” while 34% felt “borderline poor.” And yet, no comprehensive and coherent social development agenda was presented beyond the need to improve efforts to respond to crises and emergencies. 

Pandemic recovery and public health

Compared to other areas of social welfare and development, the administration’s proposals for the health sector are relatively more coherent. However, these do not favor strengthening public health (contrary to Marcos Jr.’s claims) but rather abide by the same neoliberal tenets that have decimated our healthcare system well before the pandemic. 

Although Marcos Jr. promised that his government “will exert all efforts to improve the welfare” of healthcare workers (HCWs) it is not clear how this will be done. First, he did not even mention the issues beleaguering HCWs, including low wages, insufficient and delayed benefits, overwork, and contractualization.

Second, his administration’s plan to “fully support ecozones to bring in strategic industries”—including those in health and medical care—contradicts Marcos Jr.’s promise to prioritize HCWs’ welfare. One of the primary incentives given to investors in economic zones is weaker labor regulations. As such, facilitating the entry of more private healthcare providers in ecozones will only aggravate the already unjust working conditions of HCWs.

Contrary to his campaign promise to create more jobs in the country, Marcos Jr. is now looking to reinforce the country’s labor export policy first implemented by his father. Filipino HCWs in particular are still in high demand abroad according to the Philippine Overseas Employment Administration (POEA). Coupled with poor domestic working conditions and the Marcos administration’s reinforcement of labor export, the high demand for HCWs overseas will further encourage more of them to leave, thereby worsening the problem of human resources’ drain in the health sector.

One other public health priority of the Marcos administration is ensuring sufficient supply and accessibility of medicines. To this end, his primary proposal is to keep markets open to encourage competition and lower medicine prices. However, opening markets alone will not necessarily make medicines more affordable. The prevalence of oligopoly in the pharmaceutical industry due to practices of concentration, consolidation, and horizontal integration done by big corporations will remain obstacles to achieving cheap medicines, unless addressed.

Furthermore, patents on pharmaceutical products and processes provide drug companies with monopolies over the production and marketing of medicines, allowing them to fix prices at high rates to maximize profits. Lastly, big pharma companies also have vast lobbying powers that can block regulatory measures and legislative reforms that seek to prioritize public welfare over their commercial interests. These are some of the structural barriers to lowering medicine prices. However, it is unlikely that Marcos Jr. will confront these head-on, seeing as he did not even recognize these issues.

Agriculture and agrarian reform

After much posturing for the business sector, Marcos Jr. shifted the SONA towards a laundry list of promises for rural development. Terms such as “financial assistance”, “debt condonation” and “production subsidies” were brought up as if these were the long-awaited solutions for the economic ills of the countryside. Despite its merits, a question lingers: how?

Would an increase in public investments for agriculture and agrarian reform re-energize the consistently underperforming sector? The ₱52 billion eyed by Marcos Jr. for debt/amortization condonation alone is five times the usual annual budget of the Department of Agrarian Reform (DAR) in recent years. From a fiscal point of view, unless the 2023 General Appropriations Act reflects significant increases in budgets of these key agencies, the solutions proposed by Marcos Jr. would remain hollow.  Low budgets have become a convenient scapegoat for poorly implemented programs that have ultimately stagnated the agriculture sector. Beyond budget increases however, Marcos also needs to contend with  the problem of paralysis in food and land governance that stem from ineffective program implementation on the one hand, and strong aversion  to increases in public spending due to the underperformance of the sector displayed in the past by economic managers. There is a strong possibility that government funds will be realigned away from agriculture and agrarian reform, to other programs more sound for investments.

Investing in programs based solely on purported economic gains undermines the need to address deep-seated social issues. A glaring example is the Rice Trade Liberalization (RTL) Law, which pushed farmers to indebtedness as cheap rice imports flooded the market. Though the country’s economic managers continue to discount its impacts, the RTL led to more profiteering as farmgate prices were driven down by traders and middlemen to alarming levels, disheartening farmers to pursue agricultural activities and forcing them to seek employment outside food production. The Rice Competitiveness Enhancement Fund, despite supposedly raising ₱10 billion per year from tariff revenues, did little to widen support to small-scale rice producers, benefitting mostly medium to large scale agriculture cooperatives and industries in terms of assistance and modernization. Marcos Jr. could have signaled to Congress his desire to repeal if not amend the RTL in light of his earlier statements to review its impacts, but he chose not to.

Efficiency is not always the solution. Enhancing production does not always lead to eradicating rural poverty. Instead of implementing top-down blanket programs designed to raise the economic gains of the agriculture sector, why not rights-based approaches for rural development such as agroecology and food sovereignty? In this light Marcos Jr.’s pronouncements to subsidize farm inputs, might lead to the continued proliferation of conventional agriculture. Despite increases in yield, over dependence on chemical fertilizers  have subjected farmers to a vicious cycle of indebtedness. Seed subsidies under conventional agriculture might also lead farmers down the path of dependence to hybrid or genetically modified variants that enables corporate capture of food systems.

Corporate capture on land has also seen an upsurge in recent years, besetting further the social justice goals of agrarian reform. Unbridled land financialization and privatization led to alarming increases in land-use conversions and corporate land grabbing for residential, commercial, industrial and tourism purposes. Lands dedicated to agriculture have decreased dramatically, and even irrigated areas are not spared from seizure. Despite Marcos’ rhetoric on the condonation of land amortization debts by farmer beneficiaries under the Comprehensive Agrarian Reform Program (CARP), he did not address the equally important aspect of acquisition and distribution targets that have been largely unmet,  due to heavy resistance from economic and political elites that thrive on land monopolies and feudal-tenurial relationships. A more strategic directive to Congress could have been a moratorium on land conversions, and other proposals to  strengthen the tenurial security of farmers. Instead, the narrative was shifted towards less politically conflicting terrain.

Systemic changes in food and land governance requires radical policy reforms. Marcos Jr. could have taken a stronger stance in the SONA to advance the policy discourse and tackle long-standing issues in  agriculture and agrarian reform, given the strong mandate from his election win.  Instead, his pronouncements alluded more to the same elite circles that have thrived on inequality in the countryside.

Waver and waiver

As he concluded his SONA, Marcos Jr. pushed for the passage of the National Land Use Act (NLUA)—a legislation that has been languishing in Congress for decades now—for the management and development of the country’s land and water resources. According to him, this is also to hold owners accountable for making these lands “productive” and “sustainable” notwithstanding the unresolved issues around land rights and ownership as well as contrasting perspectives on productivity and sustainability.

For Marcos Jr. and his economic team, the road to recovery would require the further opening up of the economy to cater to foreign interests and facilitate the transformation of the country into an investment destination. This contradicts his populist rhetoric and posturing on foreign policy that drew loud applause and cheers from an enthralled audience, “I will not preside over any process that will abandon even one square inch of territory of the Republic of the Philippines to any foreign power (…) we will not waver, we will stand firm in our independent foreign policy, with the national interest as our primordial guide.” At the heart of this is a nagging question: Exactly in whose interest would this be?

On national security, Marcos Jr. intends to restructure the Armed Forces of the Philippines (AFP) and revive the mandatory Reserve Officers’ Training Corps (ROTC) program for the youth. This penchant for militarist “nationalism”—a predilection of the previous Duterte administration and now sustained and promoted by Marcos Jr.’s VP and Education Secretary Sara Duterte—is supposedly to prepare the country for national defense and disaster preparedness as well as security threats to territorial integrity and national sovereignty. But precisely, where did militaristic solutions and myopic notions of nationalism lead us?

Marcos Jr. committed to maintaining good relations with the rest of the world, “a friend to all, an enemy to none.” This was also the proclaimed stance of his predecessor Rodrigo Duterte while directing profanity to those who had refused to bow down to his whims or take part in his hedging game. On the other hand, maintaining international standing and reputation is important for Marcos Jr., made more evident as he remarked about the messages of support and offers of help that his administration received from “many of our friends in the international community” and the necessity of strong bonds and collaboration “in the direst of times.”

Same old formula, same old dilemma

What was glaringly left unsaid was commitment to human rights, justice, accountability, and the rule of law, which are indispensable to be a respected member in the community of nations. In his one-hour speech, Marcos Jr. made no mention of (along with how he intends to address) critical human rights and justice issues that suffered an onslaught of attacks and demonization under Duterte, and that need urgent attention. These include the red- and terror-tagging of activists, attacks against human rights and environmental defenders, and the situation of indigenous peoples and continuing assaults on their rights amidst the state’s intensifying counterinsurgency campaign couched in peace, local development, and national security rhetoric.

Save for a passing mention of Duterte’s unfulfilled promise and unfunded Mindanao Railway, nothing was said about urgent concerns for Mindanao including the unfinished reconstruction of war-ravaged Marawi, the tenuous Bangsamoro transition, and the continuing struggle for just and lasting peace. Flagrantly left out as well in Marcos Jr.’s SONA is his position in rejoining and dealing with the ongoing International Criminal Court (ICC) probe into the Duterte regime’s crimes against humanity and human rights abuses, and exacting accountability for these.

The deafening silence on these pressing issues could only signify a callous indifference and worse, not only a continuation of the abuses, violence, and impunity but also a subtle, insidious throwback and embrace of the policies and atrocities of Marcosian dictatorship as part of the historical negationism and Grand Restoration. This also points to the fact that Marcos Jr. has no moral authority to lead and no moral high ground to stand on given the Marcoses’ dark history of dictatorial rule and the injustices committed that he has refused to acknowledge, express remorse over, let alone apologize for and make amends and reparations.

SO(paano)NA? (so, what now?)

Marcos Jr.’s first SONA has given us a glimpse of the possible character of the Marcos administration 2.0: Neoliberal Populist. Overall, the responses put forward by Marcos Jr. are “technocratic” pro-corporate solutions that are disconnected from or insensitive to the hardships faced by ordinary Filipinos. They also constitute a rehash of Marcos Sr.’s policies which they have repurposed to meet current challenges. His speech was also sprinkled with populist rhetoric, but these are mere concessions that do not address the systemic roots of our problems and only aim to pacify a nation caught in the middle of multiple crises.

Contrary to what neoliberal proponents would like us to believe, the economic crisis we are confronted with now are not simply a consequence of the pandemic or the war in Ukraine. Rather, this crisis has long existed, and it is the result of a development framework that deliberately undermines social justice and human rights in the name of profit for big corporations. Marcos Jr.’s inaugural SONA signifies that he will reinforce this kind of development.

As such, it is crucial for civil society and social movements to forge solidarities across different sectors and peoples to strengthen our pushback against this economic agenda that goes against the interests of ordinary people. We also need to be more vigilant as we know that the elites—in the interest of advancing their agenda—will continue and even intensify the systemic repression of our rights to deter our struggle. In the face of these challenges, we must continue to stand firm in our resolve to advance more just, humane, and sustainable alternatives.