Philippines can’t afford to go back to the past

In 2016, Filipino voters picked a president who will be remembered for his crass pronouncements and a brutal war on drugs. On Monday, if polls would be correct, they are poised to elect the son of the late dictator Ferdinand Marcos. The return of the Marcos clan to the Malacañang Palace may appeal to Filipinos nostalgic for the era of one-family rule. But it doesn’t bode well for the country’s future.
Before the pandemic, the Philippines was one of the fastest-growing economies in Asia, managing to trend higher despite a narrow manufacturing base and messy politics, and to do so without treacherous borrowing. For all of President Rodrigo Duterte’s bombast, his administration did push through some important reforms. These included reducing corporate taxes, introducing incentives for tech investments, and passing legislation allowing full foreign ownership of sectors such as telecoms and airlines.
Ferdinand Marcos Jr, known as Bongbong, has said he’ll press on with Duterte’s “Build, Build, Build” infrastructure campaign and support small businesses and agriculture. But compared with his main opponent, the front-runner has provided little in the way of policy detail, avoiding in-depth interviews or debates. Nor has he acknowledged or apologised for his father’s excesses. Even if voters overlook those shortcomings and elect Marcos, the challenges facing the country will require him to do more than merely operate on autopilot.
While the economy has rebounded from the depths of the pandemic, the pace of growth is easing. Public debt stood at 61% of gross domestic product at the end of 2021 — not yet ringing alarm bells, but hardly a comfortable starting point, not least because Marcos has shown little appetite for fiscal restraint.
The next president will need to pick a credible replacement for Benjamin Diokno, the outgoing governor of the central bank. The government also needs to do more to prepare Filipinos for economic and environmental change. Human capital has been battered by the pandemic and will require investment in remedial schooling and training. Learning poverty, or the share of 10-year-old children who cannot read and understand a simple story, was already close to 70% in 2019 and has likely risen during the pandemic, the World Bank says. Given the country’s vulnerability to natural disasters, the Philippines also should increase investments to help communities and industries build resilience against extreme weather. Unless the country takes action to mitigate the impact of climate change, it could see economic output reduced by as much as 6% annually by the end of the century.
So far, Marcos has given few indications of how he intends to address these challenges. His tenure in parliament has been undistinguished, focused mostly on tinkering with festivals, naming roads, and redrawing city or provincial lines. Duterte’s daughter, Sara Duterte-Carpio, has campaigned with him and will likely be elected as vice president — a combination that promises to prolong the country’s dreary history of transactional, nepotistic politics. Meanwhile, Marcos’s open admiration for his father’s kleptocratic regime is hardly reassuring investors hopeful for a return to government transparency and the rule of law. It’s true that elections in the Philippines tend to focus on personalities, not details.

—Bloomberg