THE battle cry of the administration when President Duterte swept the elections in 2016 with 16.6 million votes was simple: genuine change.
The national government created a zero to 10-point socioeconomic agenda that guided the administration’s policies. The agenda is composed of “loose ends” which previous administrations have left untied, forgotten.
The agenda contained the following:
0 Peace, law and order, and zero (or minimal) corruption, smuggling, tax evasion, etc.
1 Maintain and improve on the strong macroeconomic fundamentals achieved by the previous administration through modest external debt and fiscal deficit, low inflation and interest rates, etc. (Achieving) good macroeconomic growth albeit poverty and inequality persist across households and subnational regions.
2 Reform the tax system to make it more equitable, progressive, and internationally competitive.
3 Deal with constitutional restrictions on FDIs (reduce the negative list); improve the ease of doing business by cutting red tape.
4 Accelerate infrastructure investment, with at least 5 percent of GDP spending target—huge infrastructure deficit inadequately addressed by past administration.
5 Develop the agriculture sector focusing on farm-level productivity, support services to small farmers, improving market access, and developing agricultural value chain through linkages with agribusiness firms; part of a broader rural development strategy that promotes tourism as well.
6 Address bottlenecks in agrarian reform and management systems, including security of land tenure to make projects bankable and attract more investments in rural areas.
7 Strengthen health care and basic education (K-12), focusing on math, logical thinking, analytical and communication skills; provide scholarships for tertiary education and address jobs-skills mismatches.
8 Promote science, technology and the creative arts to enhance innovation and creative capacity toward self-sustaining, inclusive development.
9 Improve social protection programs, including the government’s Conditional Cash Transfer program, to protect the poor against instability and economic shocks.
10 Strengthen implementation of the Responsible Parenthood and Reproductive Health Law to enable especially poor couples to make informed choices on financial and family planning.
The President’s economic team made progress as seen in the economy’s steady growth in the first four years of the Duterte administration, as well as key legislation enacted to meet the goals it set.
Unseen enemy
But then, tragedy struck.
The year 2020 was the country’s—and the world’s—annus horribilis. And it happened because of an unseen enemy, Covid-19.
Despite this and the many challenges encountered by the administration, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the country has achieved majority of these goals.
This was done, he said, through the passage of reform bills headlined by the Comprehensive Tax Reform Program (CTRP)—including the Tax Reform for Acceleration and Inclusion (TRAIN) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Other laws passed included the Rice Trade Liberalization (RTL); Ease of Doing Business Act; Philippine Innovation Act; and the Expanded Maternity Leave (EML).
The country’s chief economist said goals on social protection were supported by the National ID system, while the goal on human development was achieved with passage of the Universal Healthcare Act.
“We created a lot of fiscal space over the years to fund K-12, conditional cash transfers, the PhilHealth indigent program, and in our infrastructure program,” Chua earlier said.
Experts like De La Salle University economist Ma. Ella Oplas agreed with Chua and said the TRAIN and CREATE laws were important pieces of legislation that allowed the government to perform a “balancing act.”
The TRAIN, she told the BusinessMirror, rewarded Filipino taxpayers with higher disposable incomes and gave them the freedom to spend their hard-earned pesos to help fellow Filipinos.
Oplas also said that while the RTL will make competition in the rice sector more stiff, it will also serve as a wake-up call for “intermediaries that are the ones profiting from our farmers,” as well as the government to consider not only farmers but consumers in terms of policy making.
Implementation of policies such as the review of the closed mining sites shows the administration is seriously looking into the issue, she said. Oplas thinks the review also says the government “will not hesitate to have them permanently shut down.”
Continuing the “Build, Build, Build” program even amid the pandemic was a good policy that will be sustainable and will help once the economy opens up again, according to Oplas.
However, she noted, the vaccination effort is “really slow” and government must take steps to fast-tracking such. “Our border security to detect and make sure that no new variant or infected individual comes into the country is also a disappointment.”
’Pie in the sky’
For former Socioeconomic Planning Secretary Romulo L. Neri, “The administration would have done well economically had the pandemic not intervened. The high and sustained GDP growth would have given it sufficient fiscal and financial flexibility to undertake the needed measures to effect its social and economic plans. The 10-point agenda is basically doing more of the same better with some reforms here and there.”
However, Neri said in an e-mail, it would have been better if the administration had encouraged greater private-sector participation, especially for infrastructure projects. Turning to the private sector would have fast-tracked implementation of these projects.
He added that the AmBisyon Natin and the current Philippine Development Plan were “mostly pie-in-the-sky motherhood statements” and “full of inane verbiage.” These, Neri said, should be replaced with a more strategic development plan.
“I recommend we scrap the old framework used in the plan and come up with a more strategic approach focused on the critical and catalytic factors. We need an economic recovery plan recognizing fully the damage done to our economy and livelihoods and incorporating the paradigm shifts under a new normal,” Neri said.
Setting aside AmBisyon Natin was also part of the recommendations of the former dean of the University of the Philippines School of Labor and Industrial Relations, Rene E. Ofreneo. He said the next administration should come up with “a more inclusive and sustainable alternative development pathway.”
Ofreneo this is needed given that “trickle-down economics” did not happen under the current administration. A case in point, he said, is how the RTL “bludgeoned the rice farmers.” He added that the recommendation of imposing a 5-percent tariff on pork also steered the administration from treading an inclusive development path.
“In 2018-19, DA’s [Department of Agriculture] Undersecretary Fred Serrano and his boss then—Manny Piñol—were questioning this trickle-down approach because it fails to address deep-seated problems of inequality and failure of government to be more aggressive in coming up with institutional reforms, such as direct support to the farming community,” Ofreneo stressed.
He also lamented how the TRAIN and CREATE laws achieved the opposite of what they were meant to accomplish. The TRAIN law, he said, “punished ordinary people with more and higher indirect taxes,” while CREATE only gave “tax relief to the rich.”
Gaps in SDGs
Ofreneo sees limited progress on innovation and inclusive development, and, given the level of ayuda to those negatively affected by the Covid-19 lockdowns, social protection in the Philippines leaves much to be desired.
He added that the recent controversy on the World Bank report concerning the performance of Filipino children in the Program for International Student Assessment (PISA) spoke volumes about the level of human development in the country.
“Overall, the picture is not so good,” Ofreneo said. “On the 17 SDGs [Sustainable Development Goals], the government is on track to missing them all.”
Unfortunately, former Socioeconomic Planning Secretary Dante B. Canlas said the Duterte administration did not have sufficient time to make up for its missteps. This includes its goal of attaining Upper Middle Income Country (UMIC) status.
Canlas said the damage from the Covid-19 pandemic has reversed much of what the current administration achieved when it comes to its own targets before 2020. He said it did not help that the government’s response to the pandemic was “deemed inadequate.”
The problems it encountered, which it may pass on to the next administration, include declining bank lending and inadequate social safety net programs like food aid and unemployment benefits, according to Canlas.
“The war against dangerous and prohibited drugs has succumbed to charges of EJK and other human-rights violations. Public investments and some government agencies have been stained by corruption, such as PhilHealth and the Bureau of Immigration. Mistrust by the public in government has grown as a result,” Canlas added.
Canlas worries over the lack of confidence that has kept more foreign direct investments from Philippine shores, as well as the lack of a clear policy as to when schools can open again.
He said students are “forgoing a great deal of human capital” with alternative firms of delivering academic instruction, particularly during the pandemic. Canlas echoed the observation of slow vaccination making herd immunity “a bridge too far.”
He stressed, “There’s no more time for the administration—with preparations for the May 2022 election in high gear—to move forward in a profound way the elements of inclusive growth.”
Suffice it to say, the next administration would have a long laundry list. Foremost on that list is recovering from the pandemic. Economists agreed that this will take a lot more change, abandoning the old ways for the new.
“Life has a lot of surprises in store for us. The pandemic alone caused us all to challenge the old ways of doing things,” Oplas said.