The state of the nation is sound, according to President Marcos

President Marcos Jr., the 17th president of the country, delivered Monday his first SONA (State of the Nation Address) before a joint session of the Congress.

The constitution requires the President to deliver an annual SONA to enable him to articulate before the nation on his vision of government. The occasion provides him an opportunity to present his assessment of the state of economy and society during his term in office. The SONA can also serve as pulpit from which to lead and to plea.

At the conclusion of the address, the new President assumed an air of confidence that the problems of the nation could be solved, that the nation will endure and that, therefore, the state of the nation is sound.

The Marcos SONA in gist. The President began his SONA by asserting: “We live in difficult times brought about by some forces of our own making, but certainly, also by forces that are beyond our control.”

Then he continued: “But we have, and we will continue to find solutions.”

The “solutions” to the problems ailing us are the elements of the economic program that the President outlined in his first SONA.

I take the liberty of selectively highlighting some key passages in his introduction of the SONA:

(1) In terms of the economy, we will implement a sound fiscal management. (2) Tax administration reforms will be in place to increase revenue collection. (3) Public expenditure priorities will be realigned, and spending efficiency will be improved to immediately address the economic scarring arising from the effects of COVID-19, and also to prepare for future shocks. (4) Productivity-enhancing investments will be promoted. (5) Our country must become an investment destination, capitalizing on the Corporate Recovery and Tax Incentives for Enterprises or the CREATE Law and the economic liberalization laws such as the Public Service Act and the Foreign Investments Act. (6) Ecozones will be fully supported to bring in strategic industries, such as those engaged in high-tech manufacturing, health and medical care, and all emerging technologies. (7) This is also seen to facilitate economic growth outside of Metro Manila. (8) Our tax system will be adjusted in order to catch up with the rapid developments of the digital economy, including the imposition of value-added tax on digital service providers.

The six-year budget and development plan. The President further explained that the fiscal plan is based on a medium-term fiscal strategy spread over the six years of his presidency. This fiscal plan will be used as basis for the multi-year budgetary goals of the national government. It will be submitted to Congress for adoption through a concurrent joint resolution to be adopted by the House and Senate. Hence, it becomes the basis of the President’s economic plan for 2023 to 2028.

Last week’s column, “Economic prospects for the next six years,” (Philstar, July 20) actually discussed this fiscal program. Though many uncertainties can affect future developments, the assumptions underlying the resources projections are realistic and credible and, therefore, realizable.

This is one of the most comprehensively elaborated SONAs that covers mainly economic and development issues. Most delivered SONAs cover a wide range of topics sometimes dominated by political matters but also include also economic and social issues.

This one is different in its single minded approach to the economy and related social issues.

Sectoral components. The sector of the economy that attracted much attention is agriculture. The President’s message on agriculture is that it has long been neglected and deserves more because of its importance in national food security.

An important objective is to strengthen the value chain in the development of agricultural industries across activities. The farmers need to get their fair share of cheaper inputs of seeds, fertilizers, irrigation, credit and other subsidies.

The plan for agricultural growth is both immediate and long term. For the short-term, the President directs that attention be given so that farmers get the technical and financial support so that they can avail of modernizing inputs of seeds, fertilizer, irrigation, credit and technical assistance.

In the long run, the agricultural sector needs to maximize the creation of the value chain out of its production. Also, the sector needs to expand its commercial production from the potentials of the whole sector.

Among the sectors that have strong potential to improve employment and income are tourism and the creative industries, which need further development.

Major attention is given to the reform of the education sector. The preparation of the youth for the labor market is of great consequence. Therefore, a review of the educational reforms involving the K-12 reform and positioning the country to remain anchored in the use of English in public instruction is significant for the country. The country must improve its performance in STEM tests (science, technology, engineering, and math) in order for it to reap the benefits from the 4th Industrial Revolution.

In the public health sector, the announcement was that regional hospitals will be increased in the nation. I took this to mean that new publicly supported hospitals will have departments that deal with the diseases of the lung, heart, and kidney.

Another public health measure that was highly applauded was the announcement that there would be “no more lockdowns.” Instead, the health authorities will use different levels of “alert” to guide public behavior during the pandemic.

A major component of the SONA deals with public infrastructures, including the discussion of investments in energy.

This is a large topic for which more space is needed.

In transport infrastructure, there is a program to complete ongoing projects composed of ports, roadways, ports, airports, and railways that were started during the Duterte administration. The new president promises to Build Better and More, too.

To attract more investments in the economy, the supply of energy needs to expand from a wide set of sources. Diversification to a wide source of non-traditional and renewable sources must include not only the use of wind- and solar-energy, but could include nuclear power.

For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/