IT WAS A comprehensive accounting of the state of the nation, delivered in exactly 120 minutes and full of optimism for the future.
President Ferdinand Marcos Jr.’s State of the Nation Address on July 24, 2023 accurately summed up the current situation of the Philippines and its people, and relayed our aspirations and dreams to have a better quality of life by sustaining our economic momentum, building infrastructures and protecting our environment.
“Sound and improving” is how the President described the Philippine economic condition. This means we have a stable government and economy, yet we are looking forward to an even brighter future.
The numbers the President cited are solid—our gross domestic product expanded 7.6 percent in 2022, the highest growth rate in 46 years. This was followed by a 6.4-percent growth in the first quarter of 2023, one of the fastest in the region.
The Philippines, he said, is considered to be among the fastest-growing economies in the Asian region and in the world—a testament to our strong macroeconomic fundamentals.
Banks are strong and stable, while brick-and-mortar retail and e-commerce businesses are flourishing, with the digital economy contributing P2 trillion.
While consumer prices remain a challenge, the inflation rate has been on a downtrend from 8.7 percent in January 2023 to 5.4 percent in June, and is on track to ease further by the fourth quarter.
The President said the government is focusing on investing in infrastructure and in the Filipino people. About 70 percent of the 2023 government budget goes to economic and social services. This is why it is crucial to improve revenue and tax collection, and the President wants Congress to enact more fiscal reforms.
To make economic growth more inclusive and lift the income of the rural population, President Marcos underscored the need to boost local farm production through consolidation, modernization, mechanization and improvement of value chains. He also proposed revisions in the Fisheries Code to incorporate and strengthen science-based analysis and determination of fishing areas.
The President vowed to keep infrastructure spending at 5 percent to 6 percent of our GDP, which means it will remain a priority until 2028. Major infrastructure projects are ongoing—and many are expected to be completed under his term.
Along with transport infrastructure development, the President aims to ensure we have enough power to meet future demand. He noted the addition of 17 power plants in 2022 and 2023, increasing our energy production by 1,174 megawatts.
He promotes renewable energy in line with the goal to have a 35-percent share in the power mix by 2030 and 50 percent by 2040. Per the Department of Energy, the government awarded 126 renewable energy contracts with a potential capacity of 31,000 megawatts.
The President is committed to “decarbonization” and addressing the impact of climate change—a recognition that despite our little contribution to global warming, we are doing our part to mitigate its impact.
More importantly, the President stressed the improvement in employment rate to 95.7 percent in May 2023 from just 82.4 percent at the height of the pandemic. He said we should do more, so that the remaining 4.3 percent of our workforce and the 11.7 percent underemployed Filipinos could contribute to the economy.
The government is adopting an investment-friendly approach, evident in the several economic briefings and business missions held by the President and his Cabinet overseas. “Our independent foreign policy—a friend to all and enemy of none—has proven effective. We have formed strategic alliances with our traditional and newfound partners in the international community,” the President said.
The President looks at nurturing the growth of the services sector, particularly the information technology-business process management sector and the tourism industry. He said the Philippines welcomed nearly 3 million foreign visitors in the first half of 2023, representing 62 percent of the 4.8-million target for the whole year.
The President’s second SONA mostly focused on the economy—which is what a State of the Nation Address is all about. The end goal is to have a more prosperous nation where everyone has enough food on the table.
The Philippines continues to grow at a rapid pace, and more Filipinos will benefit if the growth becomes more inclusive. No less than the International Monetary Fund upgraded its 2023 growth forecast for the Philippines to 6.2 percent from 6 percent despite several global challenges.
President Marcos acknowledged that inflation remains a major challenge, along with the need to build more water infrastructures and power projects, making our agriculture sector more competitive to attain food security, boosting our exports and narrowing the trade deficit, preparing for the El Niño dry spell and handling the security issues in the West Philippine Sea.
Overall, I find the President’s SONA reassuring and inspiring at the same time. I do share his candid assessment that “the state of the nation is sound and improving.”
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This piece first came out in Business Mirror on Aug. 1, 2023 under the column “The Entrepreneur.” For comments/feedback e-mail to: 11bv.secretariat@gmail.com or visit www.mannyvillar.com.ph./PN
