Philippines Flotsam and Jetsam

A downward spiral trend regarding social welfare, economic development and stability, Philippines urged to abide by ‘provisional arrangement’, Marcos lists tackling inflation as priority

Jul 24, 2024

Marcos Jr: State of the Nation?

By Anna Rosario Malindog-Uy

WHAT's the true state of the nation? This question looms in the mind of every Filipino after President Ferdinand Marcos Jr.'s third State of the Nation Address (SONA). Indeed, Marcos’ third SONA on July 22, 2024, assessed his administration's performance over the past two years. Such evaluation delves into various sectors to determine where he has succeeded or fallen short.

Social welfare and economic stability

A downward spiral trend is taking place regarding social welfare, economic development and stability. The latest Pulse Asia survey, taken from June 17 to 24, revealed that as far as the most pressing issue, 72 percent of Filipinos clamored for the Marcos Jr. administration to control inflation or the rate of increase in the prices of goods and services. Unmitigated inflation remains the primary concern across all socioeconomic classes, particularly affecting essential commodities and services. At the same time, 44 percent of Filipinos identified low wages and demand to increase wages as another critical issue that underscores the public's concern about their purchasing power and living standards amid rising prices.

Moreover, the same survey says that 30 percent of Filipinos are concerned about job creation, and 35 percent are concerned about addressing the problem of involuntary hunger. More significantly, the survey revealed that only 4 percent of Filipinos believed the Marcos Jr. administration fulfilled its campaign promise of reducing rice prices to P20 per kilogram. This is quite telling.

Furthermore, the Pulse Asia survey further reveals that some of the pressing concerns of Filipinos under Marcos Jr. include fighting corruption in government at 22 percent, lack of support for farmers at 13 percent, peace and order at 13 percent, rising crimes at 11 percent and none or lack of equality before the law at 9 percent. All these indicate that there's also a downward trend when it comes to good governance under Marcos Jr.

What does this tell us? All these indicate that Filipinos demand economic stability and growth. Furthermore, this means that Filipinos are facing significant economic challenges. Note that inflation and wages are measures of the strength of the purchasing power of an individual and the quality of the standard of living of a populace. If there's an increasing trend in inflation and wages remain low or static, this leads to or means that the purchasing power of Filipinos is weakening by the day. This also tells us that the living standards of Filipinos are deteriorating, which also implies that the country's poverty index is rising. True enough, based on the latest Pulse Asia survey, the Marcos government's attempts at reducing poverty received the second-highest disapproval percentage; 51 percent and 32 percent of Filipinos feel that poverty is one of the most pressing concerns under the administration of Marcos Jr.

Hence, by implication, the Filipino people are urging the current government to reduce poverty by implementing effective poverty alleviation programs, not being tied down in transforming the whole country into an "ayuda capital" of the world.

Pitfalls of ayuda

Addressing poverty and economic hardships in the Philippines has been a persistent challenge for successive administrations. Under Marcos Jr., providing "ayuda" (financial aid) has been a prominent strategy to mitigate economic distress and poverty-related issues experienced by Filipinos. However, while ayuda offers immediate short-term relief, it is often criticized as a band-aid solution that fails to address the root causes of poverty. Such an approach is often inadequate or problematic in the long run. Why? Because these temporary measures do not contribute to sustainable economic stability or growth, recipients often return to the same precarious situation once the aid is exhausted. Also, reliance on ayuda without a long-term plan can foster dependency and not encourage self-sufficiency or economic resilience among beneficiaries. Hence, what is needed if the structural causes of economic hardships and the worsening poverty situation in the country are to be addressed?

The solution is not ayuda per se, for it does not create jobs or enhance employment opportunities. What is needed is sustainable job creation and skills development programs, which are essential to reducing poverty and economic hardships sustainably and permanently. However, the high unemployment rate remains a significant concern among Filipinos under the Marcos Jr. regime.

Also, long-term solutions to poverty include improving the education system and providing vocational training to increase employability and income levels. However, this remains a challenge under the current government. Likewise, ayuda does not stimulate broad-based economic growth. It is a redistributive measure rather than a productive investment. What is needed are policies that promote inclusive economic growth, support small and medium enterprises, and attract foreign investments, which are crucial for sustainable development.

Furthermore, while ayuda helps with immediate expenses, it does not address the underlying causes of inflation and the erosion of purchasing power. Persistent inflation can negate the benefits of financial aid. Economic policies that stabilize prices and enhance Filipinos' purchasing power are needed and essential to combating long-term economic hardships. Ayuda is also often ad-hoc and not part of a comprehensive social protection system. It lacks the framework to provide consistent and reliable support to those in need. Thus, establishing robust social safety nets, including unemployment insurance, health care and pension systems, would provide more comprehensive and reliable support.

Most importantly, the distribution of ayuda is sometimes inefficient and marred by corruption, leading to unequal distribution and exclusion of the most needy. Transparent and accountable systems for distributing aid are necessary to ensure that help reaches the intended beneficiaries effectively. However, this is problematic and very challenging under Marcos Jr.'s administration.

Conclusion

In retrospect, while ayuda provides necessary and immediate relief to those facing economic hardships, it is not a substitute for comprehensive, long-term strategies to combat poverty. The Marcos Jr. administration must balance short-term assistance with sustainable development policies that address the root causes of economic distress. This includes job creation, educational reforms, economic policies for inclusive growth, robust social protection systems and empowering initiatives that foster self-reliance. Only through such integrated and holistic approaches can the Philippines hope to achieve lasting economic stability and prosperity for all its citizens.

With the SONA just around the corner, Filipinos await Marcos Jr.'s plan and strategy for combating and controlling inflation, and what economic policies he will lay down in his SONA on Monday that will address price stability, the demand for higher wages and job creation, which indicates a need for robust labor policies and economic reforms to boost employment and improve living standards, and addressing poverty and corruption, which will require comprehensive social programs and stricter governance to rebuild public trust and ensure equitable growth. Indeed, it remains to be seen if Marcos will tackle all these issues in his SONA on Monday. He needs to address these critical issues if his administration is to maintain public support.

Philippines urged to abide by ‘provisional arrangement’

China shows goodwill, reiterates positions over Ren’ai Jiao

By Zhang Han

The Philippine illegally grounded warship BRP Sierra Madre at Ren'ai Jiao Photo: Courtesy of South China Sea Ecological Center of China's Ministry of Natural Resources.

Manila is being urged to abide by its promises after China and the Philippines reached a "provisional arrangement" on managing the situation at Ren'ai Jiao, or Ren'ai Reef in the South China Sea.

It remains to be seen how the arrangement is carried out, Chinese analysts said, warning against the Philippines' tendency, with US support, to invite more countries into the sensitive waters to give Manila greater bargaining chips.

Ren'ai Jiao is part of China's Nansha Qundao and China has sovereignty over Ren'ai Jiao and the rest of Nansha Qundao as well as their adjacent waters, according to a Foreign Ministry spokesperson's remarks released on Monday.

By keeping its warship grounded at Ren'ai Jiao for decades, the Philippines has been violating China's sovereignty and the Declaration on the Conduct of Parties in the South China Sea (DOC), especially Article 5, which stipulates that the parties should refrain from the action of inhabiting the uninhabited islands and reefs. China continues to demand that the Philippines tow away the warship and restore Ren'ai Jiao's state of hosting no personnel or facilities.

Aerial view of the contested Second Thomas Shoal in the South China Sea — An aerial view shows the BRP Sierra Madre on the contested Second Thomas Shoal, locally known as Ayungin, in the South China Sea, March 9, 2023

Between now and when the warship is towed away, should the Philippines need to send living necessities to the personnel living on the warship, China is willing to allow it in a humanitarian spirit if the Philippines informs China in advance and after on-site verification is conducted. China will monitor the entire resupply process.

If the Philippines were to send large amounts of construction materials to the warship and attempt to build fixed facilities or permanent outposts, China will absolutely not accept it and will resolutely stop it in accordance with the law and regulations to uphold China's sovereignty and the sanctity of the DOC.

Based on these three points, China recently had a series of consultations with the Philippines on managing the situation at Ren'ai Jiao and reached a provisional arrangement with the Philippines on humanitarian resupply of living necessities. The two sides agreed to jointly manage differences on maritime issues and work for de-escalation in the South China Sea.

Ding Duo, a deputy director of the Institute of Maritime Law and Policy at China's National Institute for South China Sea Studies, told the Global Times on Monday that the arrangement shows progress has been made by the two sides in managing frictions and avoiding crisis at sea, which can help reduce misunderstanding and misjudgment.

The next thing is to observe whether the Philippines will abide by the arrangement, or say one thing and do another, Ding said.

The Philippine Foreign Ministry on Monday rejected the idea that Manila will inform Beijing in advance and allow verification of deliveries, according to media reports.

Based on the principled position of China on dealing with the current situation at Ren'ai Jiao, China reached provisional arrangement with the Philippines on humanitarian resupply of living necessities, which reflects the goodwill of the Chinese side, Chinese Foreign Ministry spokesperson Mao Ning said at Monday's routine press briefing.

"We hope the Philippines will keep its word and work with the Chinese side to get the situation under control in a proper way," Mao said.

Those remarks suggested some differences remain between China and the Philippines over the issue, analysts said.

There were signs that suggested the Philippines is also introducing more non-regional countries to intervene in the issue. Television program 24 Oras on July 16 reported that the Philippines could involve units from other countries in its regular resupply missions. In such a scenario, ships and aircraft from countries such as the US, Japan, UK and Australia could conduct simultaneous patrols with Philippine forces in the South China Sea.

The Philippine military's spokesperson said in a separate statement on Sunday that Manila "will exhaust all means before seeking foreign intervention" in its resupply missions, according to a Reuters report.

The Philippines is looking to forge reciprocal troop access agreements with Canada, France, New Zealand, and other countries, and hopes the agreements will be signed next year, Reuters reported in another article on Monday.

With the US shadow clearly visible behind the Philippines' provocations, Ding believes Washington will not make major changes in its approach. It hopes the Philippines will continue to stir up troubles, while not causing consequences that go beyond its control.

The scenario of US-convened joint exercises, joint patrols and cooperation between coast guards is possible, and it will continue attempts to escalate the disputes into a security issue and back the Philippines in the diplomatic and legal realm, Ding said.

The moves are in line with the US' "Indo-Pacific Strategy," which advocates enhanced coordination between allies and partners, Ding said.

The two countries want to grasp the opportunity before the Philippines' midterm election in 2025 and the US' presidential election in November 2024 to consolidate the bilateral and multilateral "security" mechanisms, as there are varying opinions among different departments in the Philippines on how to view and handle the South China Sea issue, said the expert.

They also want to woo as many non-regional countries as possible into the South China Sea to complicate the situation and increase the Philippines' bargaining chips, Ding noted.

Manila wants to leverage the US' influence to maximize its interests in the South China Sea, but analysts warned it should be cautious of "US support." "The US is just using the Philippines and fooling Filipinos, telling them that they will support them. But we have seen in many cases that the US does not provide assistance and aid to its allies," Herman Tiu Laurel, founder of the think tank Philippine-BRICS Strategic Studies, told the Global Times.

Marcos lists tackling inflation as priority

By China Daily

"The hard lesson of this last year has made it very clear that whatever current data proudly bannering our country as among the best-performing in Asia, means nothing to a Filipino, who is confronted by the price of rice at 45 to 65 pesos ($0.77 to $1.11) per kilo," Marcos said in his State of the Nation Address delivered on Monday.

Rice is a staple food in the Philippines, and it became the world's largest rice importer in 2023. Marcos said the government will strive to curb food price increases by boosting production, and providing seeds and post-harvest facilities to farmers.

Marcos, who delivered the speech after the opening of the 19th Congress, also declared that "effective today, all POGOs (Philippine Offshore Gaming Operators) are banned". He instructed the Philippine Amusement and Gaming Corporation to wind down and cease all POGO operations by the end of the year.

Marcos said this was in response to the public clamor against POGO.He said that POGOs, "disguising as legitimate entities", have ventured into illicit areas such as financial scamming, money laundering, prostitution, human trafficking and murder.

"The grave abuse and disrespect to our system of laws must stop," he said.

This year's address was delivered in the third year of his six-year tenure and just a few months ahead of the crucial midterm elections in May 2025. The midterm polls are considered a referendum on the current administration.

Michael Ricafort, chief economist at Rizal Commercial Banking, said the government needs to strictly enforce price laws to ensure compliance in all commercial outlets so that the public can benefit from lower prices.

Anna Rosario Malindog-Uy, vice-president of the Manila-based think tank Asian Century Philippines Strategic Studies Institute, welcomed the banning as it "is a social menace and a milking cow for some people".

Reuben Mondejar, professor at the IESE Business School in Spain, said the Philippine government needs to do a balancing act because POGOs are "a source of local employment on the one hand but has high social and ethical costs".

Ricafort said the banning of POGO signals good governance, encouraging more investments in the country.

Marcos said his administration will work to reduce poverty rates by promoting investment-led growth.

"We have set in motion policies and programs to create an environment conducive for businesses to thrive, like reforms in the capital markets, and implementation of 'green lanes'," he said.

Marcos said the government has "green-lane certified" around a hundred projects with a total investment of about 3 trillion pesos across the sectors of renewable energy, digital infrastructure, food security, and manufacturing.

On foreign policy, Marcos said peace and community-building will remain the Philippines' clarion call, especially when the country serves as chair and the host of the ASEAN Summit in 2026.

ASEAN Chair

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