Food shortages, joblessness and West Philippine Sea tension

Filipinos are in the grip of three major crises: a food shortage, joblessness and the West Philippine Sea tension.

To cope with the first two, President Ferdinand Marcos Jr. has deployed technocrats to handle the economy – Ralph Recto, 60, as Finance secretary and Frederick D. Go, 54, as secretary for Investment and Economic Affairs.

Ralph and Deck have spent 30 years each in their fields to reach the top and make an indelible mark.

Ralph was the youngest congressman when he joined the House of Representatives where he served for 11 years, rising to No. 2 as a deputy speaker. He was senator for 18 years (rising to No. 2 as Senate president pro tempore). Ralph was also president Gloria Arroyo’s economic planning secretary for one year.

“No other legislator, past or present, has spent more years in Congress legislating tax laws than Secretary Recto. He knows what is proper in principle and pragmatic in practice,” says Albay Rep. Joey Salceda.

Ralph knows the boldness of legislation in its fine print. He knows crisis when he sees one. When he entered Congress, he recalls, “in many places, when you opened the taps, there was no water. You tried to catch a plane, there was none. You lifted the phone, you got a busy signal. You switched on the lights, there was no power.”  He helped solve those problems.

In 31 years, Frederick built from scratch 54 shopping malls, 31 office buildings, 28 hotels and resorts, six industrial facilities and 19 mixed-use developments.

In response to the WPS issue, BBM has tapped 1989 Bar topnotcher and Harvard-educated (Master of Laws) lawyer Gilberto C. Teodoro Jr. as secretary of Defense. He is also a technocrat. Gibo’s strategy so far is to be belligerent towards China, the intruder into the South China Sea territorial and sovereign rights claims of the Philippines, and to boost the country’s naval weaponry.

The Manila Overseas Press Club hosts Secretary Gibo as speaker during the MOPC Defense Night on Jan. 23, 2024 at the Fairmont Hotel Ballroom.  Those who want to hear him, please contact MOPC’s Miss Dena, 0920-204-9229 or email this columnist.

The underlying problem with the food shortage, joblessness and the WPS tension is lack of investments – in adequate food production, in business infrastructure (roads and IT connectivity) and in our defense infrastructure (gunboats and tracking technology). That lack is exacerbated by another serious lack – lack of enough money.

When you are in government, the lack of money is called inadequate taxation. Or not enough tax collection. Recto’s job No. 1 then is collect more taxes. In this country, tax avoidance (which is legal) and tax evasion (illegal) have become an art.

The Philippine tax effort as a percent of the Gross Domestic Product (GDP) is 14.1 percent. The ideal should be 20 percent, the average tax-to-GDP ratio of our more prosperous neighbors. Our tax deficit is thus 6 percent of GDP. If GDP is P22 trillion, 6 percent is P1.32 trillion.  That’s big money – enough to meet our total rice shortage over the next ten years, or build twice the number of road kms we need to build in a year. Or buy 16 Robinsons Land companies. RLC has market cap of P79 billion.

For Frederick Go, lack of money is not enough investments, local and foreign (foreign direct investments or FDI). That lack is blamed on two things  – a restrictive economy (hence, the need to open it up through Charter change) and red tape (hence, the need to simplify doing business rules).

In 2022 alone, among the major countries of ASEAN, the Philippines received the smallest FDI, $9.36 billion.  Singapore got the lion’s share, $141.18 billion; far behind, Indonesia $22.22 billion; Vietnam $17.89 billion; Malaysia $17.06 billion and Thailand, $11.2 billion.

A quarter of our food needs cannot be met by local production. The response has been massive food importation – through legal imports and through smuggling. In rice alone, the Philippines needs to import 3.5 million tons yearly. At $600 per ton, 3.5 million tons is $2.28 billion. That’s conservative.

World rice supplies are tightening for two reasons – one, India, the world’s biggest rice exporter, has restricted exports; and two, El Niño, which means drought. Philippine rice production is dependent on water – from irrigation and rainfall. Rainfall is equivalent to one harvest season, or up to a third of a farmer’s palay output.

The government claims the lowest unemployment rate – 3.6 percent in November 2023, or an unbelievable only 1.8 million people jobless. Government defines an employed person as an adult (above 15) and one who has worked for at least one hour in the past three weeks when government conducted the survey.

So if you have no work and your mom sends you on an errand, to be paid with a tip, to buy patis or vinegar or detergent or a kilo of rice at a nearby store and it took you one hour because of traffic, you are considered employed.  You have lowered unemployment.

On the other hand, you are not considered unemployed even if you have no job – if you are not looking for a job. Like housewives. Or you have stopped looking for work because you got exasperated because the job you want is simply not available.  Government counts you as not part of the labor force. Government’s problem is solved. Your problem of no work?  That remains your problem.

Actually, 70 percent of 115 million Filipinos are 15 and above. That’s 80 million. That is our labor force.  Government, however, counts only 64 percent of 115 million as the actual labor force, or 73.6 million. And of that, only less than two million are jobless. Amazing.

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