“We now go to what to expect from a Bongbong Marcos presidency.”
Marcos Jr. has seven major challenges:
• Jobs. 3 million a year.
• Food shortages
• Runaway inflation
• Debts. P12.6 trillion.
• Ukraine war effects
President Marcos Jr. needs to create 8,000 jobs a day to be able to produce three million jobs a year. Three million is the number of jobs an administration must create every year to prove that the president’s economic plan is working and that the economy is strong.
On its own, even if the president were a dog, the economy produces one million jobs a year. If the GDP growth is 7 percent or higher, the economy creates an additional one million to two million jobs.
At least 24.7 percent of the adult labor force were unemployed in December 2021, according to the national Social Weather Stations (SWS) survey. This translates into 11 million Filipinos without jobs.
Officially, the unemployment rate is only 6.4 percent as of February 2022. This translates into just three million jobless—just one-third of the jobless figure. My estimate of total joblessness is as large as 30 million—half of the voting population.
The Philippines is short of nearly every kind of food—rice, corn, fish, vegetables. Food is 50 percent of the consumer basket; 55 percent of the CPI of the poorest.
Officially, at least 22 percent and up to 29 percent of the food needs of Filipinos have to be imported. That is what is called the food dependency ratio.
In 2020, the Philippine Statistics Authority showed the following food dependencies (imports as percentage of total food requirements): Rice, at 14 percent; corn, 12 percent; pork, 14 percent; dressed chicken, 6 percent; beef, 39 percent; onions, 38 percent; garlic, 91 percent; coffee, 71 percent; and peanut, yes, peanuts, – 75 percent.
The Philippine population grows by 1.8 percent per year, or by two million Filipinos per year. Yet, food production grows at only 1.3 percent per year. So the average food shortage is about 27 percent of the food needs of the population.
A rampant food shortage is ironic.
The Philippines has one of Asia’s richest agricultural resources. Our coastline is twice that of the United States in length, and is the second longest in the world, after Indonesia’s. This means rich fisheries resources. Yet, even galunggong, we import today. And our people are hungry and malnourished.
In April, the rate of increase in prices, rose to 4.9 percent, the highest in the last four years, under the Duterte administration, thanks to rapid and sharp rises in the prices of energy products and food products, and of nearly everything in between, including the cost of dying and burial.
Inflation impoverishes you, because it reduces your purchasing power. Reduced purchasing power makes you hungry, and makes you poorer.
In the last 50 years, effective poverty in the Philippines has hovered at 50 percent of the population. Why? Because of the shortages of food and their high prices. Because of raging inflation. And because of mismanagement by our government.
Per the Philippine Statistics Authority (PSA), the poverty incidence among the population increased to 23.7 percent during the first half of 2021 from 21.1 percent in the same period of 2018. This translates to 3.9 million more Filipinos living in poverty. This is a lie.
Per the SWS, hunger afflicted in 2021, 11.8 percent of the 24 million families in the Philippines. That’s about three million families.
The national government’s outstanding debt burden swelled to a record high P12.68 trillion as of end-March 2022, or up by 17.7 percent from P10.77 trillion a year ago, according to the latest data released by the Bureau of the Treasury (BTr),
With P2.2 trillion in gross borrowings planned for 2022, of which three-fourths or P1.65 trillion will come from domestic creditors mainly through the issuance of treasury bills and bonds, the outstanding debt of the government is projected to hit record-high P13.42 trillion by end-2022 from P11.73 trillion in 2021, an increase of P1.69 trillion year-on-year.
Before the pandemic, the Philippine debt-to-GDP ratio was a comfortable 39.6 percent of GDP in 2019. The ratio has risen to 60.4 percent .
Now, we must reduce our debts, otherwise, we get credit ratings downgrades, our cost of borrowings goes up, and everything that costs money goes up in prices or rate.
To bring down debt to GDP to 39.6 percent means reducing the ratio by 20.8 percent age points. Assuming a GDP of P20 trillion, 20.8 percent means a reduction of P4.16 trillion. Our national budget is only P5 trillion a year. Does it mean we reduce government spending by P4 trillion or by 80 percent.
Obviously no. Because that could mean massive cost cutting, massive austerity, massive layoffs, massive economic downturn, and massive restiveness.
Well, we could ignore the ratio, borrow some more because saving lives and saving livelihoods are better that saving the asses and reputation of our creditors.
Besides, there is no shame in being a big borrower. Singapore, supposedly the most stable country in ASEAN, has a debt to GDP ratio of 139 percent 2.3 times our debt to GDP ratio.
Russia’s invasion of Ukraine war has doing more damage to the Philippines than two years of the COVID pandemic.
The World Bank has estimated 1.1 million Filipinos will be impoverished by the Ukraine war. That I think is a very conservative figure.
The Ukraine war has increased the price of Dubai crude by 75 percent from $64.41 per barrel in March 2021 to $113 per barrel by March 15, 2022.
If Dubai crude hits $120 per barrel, gasoline will be P79.39 per liter, diesel P73.76 per liter, kerosene P73.16 per liter, and LPG P106.38 per kilo. These prices have been exceeded in many gas stations in the country.
Since Russia and Ukraine are major wheat and corn producers, the war has also meant shortages and supply disruptions of these commodities. This can only mean higher, and higher, and higher food prices and of the prices of nearly everything.
We have had 3,687,320 infections and 60,439 coronavirus-related deaths reported in the country since the pandemic began.
To be more realistic, multiply those numbers by three—so 3.68 million times 3 is 11 million cases; 3 times 60,439 is 181,000 deaths.
Here let me quote a famous quote made by Noynoy Aquino when he confronted a Yolanda victims – “Buhay ka pa naman, d ba?”
To me, COVID isn’t much of a problem now than it used to. We have gotten used to it. And deaths daily have been nil, if not zero.
This is a big question mark.
We have had the best credit ratings and credit ratings upgrades.
We have invested the most in our infrastructure and economic development.
The one infrastructure we are failing in, is in education.
Globally, we have the most stupid teenagers in terms of skills in math, science and reading.