Duterte’s last year: Patience and luck

Patience and luck should be a few of the defining words that will allow the country to coast the last year of the Duterte administration without any major mishaps, and perhaps end the second half of 2022 with some solid economic gains.

As the pandemic continues to wreak uncertainty, even the best-laid and well-intentioned plans are no guarantee for smoother sailing, as many other governments can ascertain. Even the much-lauded controls that Australia, Japan, South Korea, and Thailand have put in place to avoid lockdowns have lately proven to be ineffective as new variants of the coronavirus sweep across their economic centers.

Tough lockdown measures on Metro Manila and its surrounding provinces, now entering its 17th month, have been painful for the country. Fitch Rating’s recent outlook downgrade to negative from stable says it all.

Once soaring above all other countries in Asia, including China, after managing to laboriously climb the economic ladder during the last two decades, the Philippines is now once again at the bottom of the heap.

The pandemic is not Duterte’s fault; it is how he has managed it. All that tough talk has certainly not kept the country from having chalked close to 1.5 million cases of, and over 26,000 deaths from the virus. More importantly, he brought millions of families to economic suffering because of lost jobs or diminished incomes.

When? What?

The question topmost in people’s mind is when, as in “When is this pandemic ending?” and not “When will Duterte step down?” The answer to the former is anybody’s guess; to the latter: definitely by end June 2022 as president, but don’t count him out as the next vice president, with his daughter Sara as president.

Thanks to an arsenal of vaccines secured for some 70 million Filipinos, including a possible third booster shot, all bought from borrowed money that generations of taxpayers will pay for, all the government’s focus will be on getting the vaccines in the arms of people.

With luck, the vaccines – and the anticipated passage of a Bayanihan 3 pandemic relief package – will pay for our current leaders’ immunity, i.e., giving them a fresh mandate to remain in power for the next six years.

Much of the ruling party’s election strategy has already been patiently pieced in during the pandemic months, guided by a “new normal” political thinking where the ultimate aim is the continuation of power to replace its botched pre-pandemic Federalism plan.

How bad has it been?

More Filipinos are experiencing involuntary hunger or the lack of food to eat at least once in the last three months, according to the latest survey of the Social Weather Station. This translates to 3.6 million families going moderately hungry and 674,000 suffering severe hunger.

With enough vaccines coming in, the promise of more people being able to return to work in the next few months is seen as a stop-gap to growing hunger statistics.

Socioeconomic Planning Secretary Karl Kendric Chua continues to wax optimistic about the Philippine economy, projecting growth at between six to seven percent this year, and between seven to nine percent next year. He has definitely replaced economist and columnist Bernie Villegas as the “Prophet of Boom.”

Chua, who heads the National Economic and Development Authority (NEDA), has managed without fail to overshoot GDP projections since he took over from his resigned predecessor, Ernesto Pernia, in April 2020. Blame it on an unfamiliar pandemic economics?

Nevertheless, a number of opportunities do exist that should call for some optimism – although a return to pre-pandemic robustness may likely not be possible this year; the economic shock over the last 16 months, which still lingers, will be difficult to shake off fast.

By nature, Filipinos like to take it slow and easy, and this holds true for the push to reopen businesses. The same holds true for vaccination, where hesitancy still plays a big role, although slowly being eroded as more people realize that the coronavirus vaccine seems to be just a super-flu shot.

Rocket fuel boost

As most economists point out, the Philippines still enjoys some basic fundamental strengths, and these will act like rocket fuel to boost economic growth at the right time, i.e., when pandemic risks are firmly pushed to the side.

Foremost of the Duterte administration’s initiatives is the Build Build Build program, a ramped-up infrastructure push that has opened government financing resources to the construction of badly needed roads, bridges, ports, and other essential utilities.

Duterte’s economic team has continued to keep a tight rein on fiscal and monetary policies, and while government debt has risen significantly, it remains within decent and manageable levels.

While the last packages in the team’s comprehensive tax reform program will not immediately raise more funds for the government, the establishment for a level playing field to encourage more businesses to invest in the country would provide a future boost to economic growth.

Not least, overseas remittances from Filipinos living and working abroad will continue to provide a basic source of income for their families and will act as a hedge to deal with deeper poverty.

In the President’s last State of the Nation address later this month, asking Filipinos to be patient could be a welcome change from the usual bully bluster. The virus, after all, is not his doing, and as more Filipinos now cling to the belief that Duterte has managed to do his best in preventing more deaths, that feeling of hunger once in three weeks does not seem too big of a sacrifice.

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