There is a growing consensus among economists and analysts that a potential Marcos presidency will significantly hurt the Philippine economy.
This is driven by the fact that Marcos has an unclear economic platform based on generic motherhood statements and a poor track record as an elected official. When pushed to clarify his policy stances, Marcos either shies away or falls back on low-hanging populist rhetoric.
“We will convince investors,” claims Marcos Jr., and yet his ostensible policy direction simply contradicts this. Marcos Jr. has banked on campaign promises to spend, spend, spend, and yet he has also said that he is “not very partial” to creating new taxes to fund this spending. These are obviously contradictory and unsustainable policy pronouncements.
The result of these populist but contradictory policies will be persistently high government deficits which will worsen our already growing debt. The Marcoses’ legacy of unfettered cronyism and unchecked corruption will only make matters worse, as his irresponsible spending will not increase the economy’s productive capacity. Instead, his plans will push demand beyond what resources can accommodate, and he is likely to rely on the metaphorical printing of money to fuel this spending binge. The direct impact on Filipino households will be felt through rising inflation – higher food prices, higher costs of living, lower purchasing power, and lower value of savings.
The risks under a Marcos regime extend beyond inflation, however. There is also a risk of stagflation (the combination of slow growth, high inflation, and high unemployment) under his presidency. In a policy note dated April 28, Romeo Bernardo of the New York-based think tank Global Source warned that policy missteps in the next administration might cause stagflation.
“Resorting to blunt instruments, e.g., suspending oil taxes, returning to government monopoly of rice imports, would have deleterious impact on government’s fiscal position and further constrain fiscal resources needed to support longer term economic growth,” he added. These “blunt instruments” are what we anticipate in a Marcos presidency, based on his previous statements.
Dr. Cielito Habito noted in a May 3 Inquirer column that Marcos is out of touch with realities on the ground, has complete disregard for fiscal responsibility and proclivity for massive borrowing to finance ambitious promises, and lacks understanding of basic economics. While Marcos Jr. might like to position himself as continuing the Duterte administration’s policy agenda of Build, Build, Build, Duterte actually had the common sense to pursue a tax reform agenda which included raising excise taxes to fund infrastructure projects. Marcos Jr.’s flimsy ideas and false promises might garner votes, but they certainly do not secure voters’ best interests. Contrary to what his voters wish that prices would go down, expect prices to soar.