President Marcos’ first State of the Nation Address (SONA) tomorrow is a much-awaited event especially since it will put an end to speculations about the new President’s specific priorities during his six-year term.
The 31 million Filipinos who voted for him in the May election, made him the first majority president since the 1986 People Power revolution, and put their faith in him to solve the country’s seemingly insurmountable economic problem, would specifically want to hear how he intends to do that.
With an inflation rate of 6.1 percent as of June which is the highest level since October 2018, soaring prices of basic commodities, a foreign exchange rate of P56.35 to $1 as of July 21, an unemployment rate of six percent in May or 2.93 million jobless Filipinos, unaffordable fuel prices, heavy reliance on agricultural imports, a bloated trade deficit, a high government debt-to-GDP ratio, among other economic and social problems, Congress will definitely have to play a huge role in enacting new laws or amending existing ones to help the country climb out of this deep hole.
Many of these problems are not our own doing. Unfortunately, they are interrelated, which makes solving them or at least cushioning their effects, difficult.
The weakening of the peso’s value vis-à-vis the US dollar, for instance, is driven by several factors, one of which is the strengthening of the dollar. To curb inflation which has increased to its highest level in nearly 41 years, the US Federal Reserve has responded by steeply raising its benchmark interest rates.
A stronger dollar increases the peso equivalent of remittances by overseas Filipino workers, benefitting their families. But this is negated by inflation or the higher prices of goods and lower purchasing power of the peso.
Meanwhile, the depreciation of the peso also discourages imports, which would have been great had these products been available locally and at competitive prices. Unfortunately, many local businesses source their materials from abroad. If they have to spend more peso for every dollar that they need to purchase those materials, their cost to produce increases. This means they will either have to stop producing or at least produce less, lay off workers, or pass on the higher cost to the consumers. If they cannot increase their prices because of stiff competition in the market but they have to produce anyway, then they will have to find a way to lower cost.
So it is not surprising that our pandesal which is made from flour, which comes from imported wheat, is either getting smaller or is now more costly.
Just last week, I bought my fried siopao, whose price has remained but whose size is now half of what it used to be.
The crude oil that our local petroleum industry needs now requires more pesos to be brought into the country.
The Philippines is a net agricultural importer. In 2021, the country brought in more foreign agricultural products than it sold to the world market, translating to an agricultural trade deficit of $8.92 billion, or 39 percent higher than the $6.37 billion in 2020.
In 2021, total agricultural import was valued at $15.7 billion, or 13.3 percent of the country’s total imports, increasing by 24.9 percent compared with $12.58 billion in 2020.
Cereals had the biggest share of agricultural imports, accounting for 20 percent of the total. From $2.55 billion in 2020, the country’s cereal imports went up to $3.15 billion. Meats and edible meat offal was fourth at $1.69 billion, compared to only $954.8 million in the previous year.
We import 100 percent of our cereal, 99.9 percent of our dairy, 92.9 percent of our garlic, 70 percent of our peanuts, 73.2 percent of our coffee, 52.6 percent of mongo, 41.4 percent of beef, 30.6 percent of carabeef, 27.6 percent of onions, 27.1 percent of tuna, 15 percent of rice, 9 percent, 8.6 percent of corn, 7.1 percent of dressed chicken, 3.7 percent of shrimps and prawns, 0.3 percent of duck, and 0.1 percent of milkfish and oysters.
Except for wheat which we do not produce, many of these imported agricultural products are produced locally, although not enough to meet demand.
It is not surprising that the Philippines ranked only 64th out of 113 countries in the 2021 Global Food Security index developed by UK-based Economist Impact.
By reducing our agricultural imports, not only will our country save on much-needed foreign exchange, it will also spare our country from the volatile supply and prices in the world market, not to mention make our farmers more profitable.
A number of countries have placed restrictions on their exports of food and food-related goods, mainly to ensure that they have enough for their own needs brought about largely by the uncertainties of the Russia-Ukraine conflict, making food self-sufficiency more urgent.
Among those that have imposed a ban on exports are Afghanistan (wheat), Pakistan (sugar), Malaysia (chicken products), India (sugar and wheat), Argentina (beef meat), Indonesia (palm oil and palm kernel), Russia (wheat and other products), Ukraine (wheat, of which it is the world’s third biggest supplier). There is also a global fertilizer supply crunch, not to mention a 234 percent increase in average prices compared to 2018, which is a big blow to us considering that we import 95 percent of our fertilizer needs. China, Russia, Ukraine, and Kyrgystan have already banned fertilizer exporters.
Of all sectors of the economy, Marcos has chosen to head the agriculture department to make it clear that agriculture is a high priority under his administration. For starters, he may want to allocate more for agriculture, which only has a 1.5 percent share of the national budget compared to Vietnam’s 6.5 percent, Thailand’s 3.6 percent, Indonesia’s 3.4 percent, and Malaysia’s 2.3 percent.
Only the beginning
Resorts World Manila (RWM) is now Newport World Resorts.
But more than just a change of name, the rebranding also signifies a new beginning.
In 2009, RWM pioneered the integrated resort concept in the Philippines by establishing a casino within the Newport City complex in Pasay City, right across the NAIA Terminal 3, making it a gateway leisure destination.
More than casinos, RWM’s president and CEO Kingson Sian shifted focus from a single-value offering to an all-inclusive leisure and entertainment destination for the whole family.
He not only elevated patron’s expectation of what a casino should look like with the upscale gaming area, that same year, he created the award-winning Newport Performing Arts Theater which has since staged numerous awe-inspiring musicals and iconic concerts. The integrated resort became known as a premier entertainment destination.
Within a few years, international hotel brands rose in the property - Marriott Hotel Manila, Holiday Inn Express Manila - Newport City, Hilton Manila, Sheraton Hotel, and Hotel Okura Manila, further establishing RWM as a tourism haven.
The RWM brand has gone far beyond what it strived to achieve from the beginning which is to become a fully integrated resort. After opening a second wing, it knows it can push its own boundaries even further. The new name signifies this evolution and greater things to come.
For comments, e-mail at mareyes@philstarmedia.com