MANILA - President Ferdinand Marcos Jr should consider cutting back on foreign trips and focus more on solving the country’s problems, especially in agriculture, a former socioeconomic planning secretary said on Thursday.
Former National Economic and Development Authority Secretary Ernesto Pernia said some of Marcos’ trips abroad could have been put off considering the multitude of local problems.
“There are just too many problems that need to be attended to. Maybe a couple of trips are fine, three trips at the most in his first semester of being President. Then show as an exemplar, attending to agriculture, which he deliberately decided to head himself, because it is a very critical department and food is really the, one of the problems we are facing now," Pernia said during a forum of economists.
Marcos is now in Japan, his 10th foreign trip since assuming power. Malacacanang said the President has gathered pledges from investors during these trips.
Pernia however said he believes fixing the country’s problems would eventually do more to boost investor confidence and boost investment.
INFLATION AND GROWTH
High prices of food items, like onions, pushed up inflation to a 14-year high of 8.7 percent in January, which was above even the central bank’s forecast range.
Jonathan Ravelas, managing director at eManagement for Business and Marketing Services, said inflation can weigh down consumption, which is a key growth driver.
Alvin Ang, chair of the Ateneo de Manila Economics Department said inflation is also exacerbating inequality.
“You really don’t want growth to be inequitable. We want people to catch up. The disposable income of the rich is actually 14x the lowest decile. That is a huge difference and that inequality is being felt by the majority,” Ang said.
He noted that recent jobs data from the Philippine Statistics Authority presents some troubling trends. Jobs are being created in services and industry, but agriculture is losing jobs.
The Development Budget Coordination Committee targets a growth rate of 6 to 7 percent for 2023, while putting the inflation outlook at 2.5 to 4.5 percent. These forecasts were released in December 2022.
Ravelas said the economy may grow by between 5.5 and 6.75 percent this year, while Ang said 7 percent growth is still possible.
The key will be slowing down inflation, the two economists said. Both also warned that the Bangko Sentral ng Pilipinas may be forced to raise rates further to keep inflation expectations in check, and to prevent any negative impact on the Philippine peso from further Federal Reserve tightening.
Former BSP Deputy Governor Diwa Guinigndo meanwhile lauded the recently unveiled Philippine Development Plan, but warned that the Marcos administration may be getting distracted by other matters, including the proposed sovereign wealth fund.
“Good governance should be maintained. Any semblance of departure from good governance will be costly. I submit that perhaps the MIF [Maharlika Investment Fund] should be given a fine toothed comb before this is passed in Congress. Many indications show it is untimely because we have no surplus fund to invest,” Guinigundo said.
The former central banker said proposals to fund the MIF through contributions from the government-owned and controlled corporations was “self-defeating.”
“Anything taken from GOCCs or government-owned and controlled corporations, GFIs, Government Financial Institutions, and the Bangko Sentral ng Pilipinas or BSP deprives the government of funding the budget deficit. Either the NG borrows more, or imposes higher taxes, or does both. To me that is not going to be optimal. Let me just say that we have an excellent development plan, but there are wild cards, and those are some of the wildcards."
Marcos has also rejected a proposal to use a portion of the annual income of GOCCs as seed capital to jumpstart the proposed Maharlika Sovereign Fund.