Marcos enters last; The 5th SONA is to set the final agenda for the next two years

By Erika Mae P. Sinaking, A reporter
Pexcel John Bacon again Kaela Patricia B. Gabriel

PRESIDENT Ferdinand R. Marcos, Jr. will deliver his fifth State of the Nation Address (SONA) on Monday, entering the final two years of a six-year term under increasing pressure to demonstrate that his administration can turn economic gains into tangible improvements in living standards while strengthening governance, restoring public trust and addressing security challenges.

The annual speech before a joint session of Congress is expected to outline the administration’s legislative agenda through 2028 and show how Mr. How Marcos intends to protect his policy legacy as political attention slowly turns to the next presidential election.

“Two years is a long time,” said Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. BusinessWorld by phone. “The priority should be to lower prices, control inflation, improve our international relations and restore confidence to local and foreign investors.”

The speech comes after a year marked by slow but strong economic growth, renewed volatility in global oil markets after the Middle East war, continued maritime disputes with China and increased scrutiny of public spending after investigations into flood control projects.

Mr. Marcos is expected to outline priorities for food security, infrastructure, energy, digitization, defense modernization and investment promotion while assuring the public that his administration remains focused on delivering results despite the political turmoil.

Business groups will be looking for policy signals on tax, energy, infrastructure and regulatory reforms, while labor unions are expected to push for stronger measures to reduce the high cost of living after the implementation of the latest minimum wage hike in Metro Manila.

ECONOMY IN CONCENTRATION
Economists said the President should use his speech to explain how the government intends to strengthen the economy against external shocks while ensuring that growth is inclusive for everyone.

“The President must acknowledge the need for the economy to be able to withstand the internal and external challenges,” said Christopher James R. Cabuay, professor of economics at De La Salle University. BusinessWorld in response to questions by email.

Former Finance Secretary Cielo D. Magno said Mr. Marcos should explain how the government plans to protect families from economic instability while keeping public finances sustainable.

“We must ensure that government spending is truly strategic and beneficial to the economy and people,” he said via Viber, adding that debt management, workforce development, industrial policy and morale should always be prioritized.

The National Government’s outstanding debt stood at P18.55 trillion as of May, according to the Bureau of the Treasury.

Ms. Magno said Filipinos need to be assured that public funds are being used properly and that government programs can reduce households’ vulnerability to inflation.

He added that this year’s SONA should not only answer what the administration has achieved but also how they intend to prepare the country to face the changing economic conditions in the future.

The broader economic picture presents both opportunities and challenges.

The World Bank earlier this month classified the Philippines as a middle-income economy after its gross national income per capita reached a record $4,850, crossing the upper-income category threshold.

The administration also cited an average annual gross domestic product growth of 5.8% over the past five years, indicating economic recovery from the pandemic.

Inflation eased to 6.4% in June from 6.8% in May, according to the Philippine Statistics Authority, although the January to June average of 4.8% remained above the Bangko Sentral ng Pilipinas’ 2%-4% target.

Lower transport and fuel prices have helped lower inflation, but food prices continue to weigh on household budgets.

For many Filipinos, however, the benefits of macroeconomics no longer translate into simple daily living.

Mark Noel G. Nueva, a 27-year-old motorcycle delivery man from Quezon City, said the high fuel prices have reduced his wages.

“I changed jobs after the pandemic, I faced this issue of fuel costs,” he said in Filipino. “Ever since the war in the Middle East started and the prices went up, it’s been a big problem for commuters like me who just want to work.”

He said filling up his motorcycle now costs almost twice as much as it used to, reducing his daily income.

Mr. Cabuay said the administration will highlight the country’s middle-income status, but warned that many Filipinos do not automatically associate this position with better living conditions.

“Although this sounds good, I don’t think most of our citizens believe that this means a better life for everyone,” he said. “Sure, it’s good that there’s growth, but I don’t think it’s enough to raise everyone’s health.”

EXCEEDING PROMISES
Business groups say the administration’s last two years should focus on making changes instead of announcing more plans.

President of the Management Association of the Philippines Donald Patrick L. Lim said that this year’s SONA should mark an important change in the economy.

“Filipinos are feeling the pressure of high living costs, businesses are facing uncertainty, and many MSMEs (micro, small and medium enterprises) continue to struggle,” he said in a statement. “We must fight corruption and be strong, but we must not allow the fight against corruption to be a brake on economic growth.”

The Makati Business Club also urged the administration to push for governance reforms, including the Right to Information Act and the Anti-Political Monarchy Act, while strengthening tax administration and supporting the digital and green economy.

Mr. Cabuay said the administration’s issues, including the impeachment trial of Vice-President Sara Duterte-Carpio, also have economic consequences.

“Weakness in governance and law-making sends a signal inside and outside of the government’s inability to provide basic public needs,” he said.

Political Analysts and Strategists President Edmund S. Tayao said Mr. Marcos is likely to emphasize agriculture and national security during his remaining term.

He said agriculture remains closely linked to trade diversification as the Philippines seeks to reduce the risks posed by regional tensions.

The administration also expanded defense cooperation with countries including Britain, France, Germany and Japan while maintaining its alliance with the US.

Mr. Tayao explained Mr. Marcos as a “policy wonk” who is focused on creating programs but who may struggle with the “wheel drive” needed to move legislation through a fractured Congress.

“The lack of people they can trust has reduced the power of the administration,” he said BusinessWorld by phone. “He finds it difficult to deal with people he thinks he shouldn’t deal with.”

Exporters, on the other hand, are seeking strong government support following the recent US decision to impose tariffs on many Philippine exports due to forced labor issues.

British Chamber of Commerce of the Philippines Executive Vice Chairman Chris J. Nelson said expanding market access through trade agreements is of utmost importance.

“Trade and commercial agreements are very important,” he said. “It is very important for the Philippines to expand its trade space.”

Asian Consulting Group’s Senior Tax Advisor Raymond “Mon” A. Abrea said the administration still has enough time to make changes that may go beyond Mr. Marcos.

“Two years is enough to make institutional changes, even if it is not enough to solve all the structural challenges,” he said in an email.

University of the Philippines Manila professor Carl Marc L. Ramota said the President should use the speech to present a governance agenda that focuses on accountability and public trust.

“The upcoming SONA provides an opportunity to lay out a clear, citizen-focused roadmap that prioritizes solutions over conflict,” he said.

The President should use his SONA to confirm the Philippines’ position in the South China Sea while outlining concrete diplomatic and security plans to advance the country’s maritime rights without escalating tensions with China, analysts said.

“The President’s desire to restore peace must not be mistaken for a willingness to ignore the safety of our men or the sanctity of our seas,” said President of the International Development and Security Cooperation Chester B. Cabalza told BusinessWorld via Messenger. He said Mr. Marcos should pursue “a political solution instead of publicly insulting Beijing” while “not giving up any inch of our sovereignty.”

Hansley A. Juliano, a political science teacher at Ateneo de Manila University, said the government should combine international cooperation with an independent foreign policy by expanding relations outside the US, strengthening the navy, coast guard and air force, and building greater regional support for Manila’s maritime claims. He added that the Philippines should work for a unified position of the Association of Southeast Asian Nations on the South China Sea by obtaining a joint statement with regional and international partners. “The main strategy is to further isolate China and portray it as a bully and a bad neighbor,” he said. BusinessWorld via Messenger.