National Economic and Development Authority, like the Department of Trade and Industry, has embraced industrial policy, on paper. After five decades of ignoring the central role of an activist state in the industrialization of a country, Neda is now trying to push the economy back to the industrial path of development.
The lifting of EO 39 ordering the price caps on rice does not end the conflict between the proponents of “free trade” or the all-out liberalization in the market for agricultural products and the farmer leaders who are demanding the government’s adoption of a “fair trade” policy to govern the sector, meaning a policy supportive of the Filipino farmers. The two sides denounced the EO for different reasons.
WE join Senators Koko Pimentel, Risa Hontiveros, Imee Marcos and Bato de la Rosa who expressed concern over the ballooning national debt and who are questioning the PBBM administration’s excessive reliance on borrowings to cover the country’s widening fiscal deficits. The economic team of DOF Secretary Ben Diokno revealed staggering debt numbers for 2024: total national debt to reach P15.8 trillion (or more than P3 trillion over the P12 trillion accumulated by the government by the end of 2021), with 11.6 percent (P670 billion) of the national budget going into interest payments.
IN his SONA and post-SONA speeches, President Bongbong Marcos has noticeably taken a more proactive posture on how to rebuild a broken agricultural sector. His marching order to his DA subalterns—“consolidation, modernization, mechanization and improvement of value chains.” Boosting agricultural production through the foregoing interrelated programs is “augmented by timely and calibrated importation, as needed,” added the President. In short, the overall agricultural revival formula is higher production at home balanced by importation of needed commodities that are in short supply in the market.
The Philippine Constitution expressly mandates the State to “promote a just and dynamic social order that will enable the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, rising standard of living, and an improved quality of life” (Section 9, Article II).
A coalition of over a hundred farmer and fisherfolk organizations (FFOs) managed to delay the ratification of Philippine membership in the Regional Comprehensive Economic Partnership for over a year, from late 2021 to early 2023. The main argument raised by the coalition is the country’s general lack of readiness to participate in a free-trade agreement dominated by China, Japan, South Korea and Australia-New Zealand. They cited the 2021 study of Dr. Rashmi Banga, a senior economist of UNCTAD, who wrote that the trade situation of the Philippines and several Asean members (Cambodia, Malaysia, Myanmar and Thailand) is likely to deteriorate under the RCEP’s free-trade arrangement.
The Filipino millennials (born 1982-1994) and post-millennials (born 1995 upward) may not be aware that the Philippine government has been relying on borrowing as the main instrument in managing the economy since the 1960s. The economy has become a debt-driven one for around six long decades. This is equivalent to three generations.
The other week, Laborem Exercens gave space to the collective statement of over 140 farmer, worker and small business organizations asking the Senators “to vote NO to RCEP.” Malacañang warned the senators that the Philippines “cannot afford to be left behind” in the imagined RCEP bandwagon in Asia. The country will miss the opportunity to export more and build a stronger economy under a regional free trade arrangement that is touted to be the biggest in the world. RCEP’s members include the East Asian dragons (China, Japan and South Korea), the countries down under (Australia and New Zealand), and the nine Asean members (with the Philippines, the 10th Asean member, still awaiting Senate ratification of RCEP).
Farmers, non-government organizations, and some members of the private sector said they oppose the ratification of the Regional Comprehensive Economic Partnership free trade agreement. Here’s the joint statement of 125 organizations and 25 personalities expressing their opposition to RCEP:
The present food and agricultural crisis haunting the nation is rooted in the failure of the government to implement fully the agrarian reform program as envisioned by the framers of the Constitution and the Comprehensive Agrarian Reform Law (CARL) of 1988. This failure is one major reason for the persistence of mass poverty in the countryside and the continuous expansion nationwide of the army of landless rural poor, meaning those without land rights (excluded from the coverage of land transfer) and without stable or secure jobs.
Per study by the UP School of Labor and Industrial Relations, more than 80 percent of the employed are informal workers. As pointed out in an earlier column, there are informals in the huge informal sector or informal economy (IS/IE). And there are also informals in the formal sector, referred to as the precariat or paid workers with non-regular or short-term tenures in the formal sector.
Can the Philippines achieve its annual GDP growth target of 6.5 percent to 8 percent between 2023 and 2028? Per calculations by our technocrats, such a pattern of economic growth will enable the PBBM administration to reduce poverty level to a single digit, return the debt-to-GDP ratio back to less than the 60 percent global threshold, and most importantly, elevate the country to the “upper middle-income status.”
An interesting policy debate on the work-from-home (WFH) arrangement is consuming the DTI, DOF and PEZA. The WFH was adopted by a number of the call center-BPO sector firms in response to the Covid-19 pandemic. It enabled these ecozone firms to avail themselves of PEZA fiscal incentives and maintain, even expand, business operations despite the government restrictions on workers’ mobility. PEZA and the IT and BPO Association want the “hybrid” WFH system retained. Per an earlier agreement with the DOF-led Fiscal Incentives Review Board (FIRB), CC/BPO firms are allowed to keep as much as 90 percent of their work force at WFH system until the end of March 2022.
Last year, American and European human resource managers noticed an unusual trend in the labor market—high “quit rates” in the labor market, meaning more workers leaving their jobs compared to the situation in earlier years. Accordingly, the rates exceeded the 2.5 percent maximum recorded in previous years. In Germany and in some American states, the rates went up to as high as 6 percent.