By Jessica Fenol, May 12, 2022; ABS-CBN News
MANILA – Socioeconomic Planning Secretary Karl Chua on Thursday said the best way to address lingering investor fears is for the next administration to bare its detailed economic plans.
In a briefing announcing the Philippine economic growth for the first quarter, Chua was asked about uncertainties surrounding the would-be administration of presidential frontrunner Ferdinand “Bongbong” Marcos Jr.
Marcos Jr. avoided debates during the campaign period unlike other candidates who were able to give details about their economic agenda.
“Any change, of course, will create concerns, whether on a national level, your personal level or community level,” Chua said.
A J.P. Morgan report released prior to the May 9 polls, said investors were concerned about Marcos’ stance on private firms and families due to past alignments or positions in the earlier Marcos regime. Investors were also concerned about his absence of a meaningful track record as a government official.
A Bloomberg report in March meanwhile placed Marcos Jr. at the bottom of a list on who could best lead the recovery of the country’s economy.
“I think the best way to address some of these concerns which investors and other analysts have mentioned is for the new administration to lay out its agenda,” Chua said.
Although Chua mentioned that Marcos’ camp has said it would focus on jobs, prices and support the small businesses, details need to be threshed out to fully educate investors and the public, he said.
Meanwhile, Fitch Solutions said that a Marcos administration also means a higher chance of policy continuation since the next chief executive is likely to continue reforms started by President Rodrigo Duterte.
The Duterte administration and his economic team have “generally performed well” after passing key economic reforms to entice foreign investors, keeping inflation in check despite surging prices globally and in helping the economy rebound faster from the pandemic-driven recession in 2020, analyst and COL Financial Head of Research April Lee Tan said.
With global issues such as the war in Ukraine and the aggressive rate hike by the US Federal Reserve, it would be unfair to say that a market is where it’s at just because of its president, Tan said.
The economy grew 5.7 percent in 2021, overshooting targets but more needs to be done to keep its recovery pace, Chua said.
Although the National Economic and Development Authority (NEDA) has yet to meet with the transition team, Chua said the priority includes keeping a “prudent and responsible fiscal policy” and policy continuity.
“We are firm on several messages, first is to maintain our macro-fiscal prudence, second is our policy continuity, especially all the reforms passed under the Duterte administration,” he said.
There is also pending legislation that could help mitigate rising inflation such as a bill meant to increase productivity in the livestock sector, Chua said.
A good model for addressing supply-side risks to inflation is the rice tarrification law which has helped lessen rice’s contribution to inflation by increasing supply as well as raise farmer productivity with the income generated by the law, he said.
“We stand ready to have a dialogue with the transition team with the new administration to discuss the details,” he said.
When asked if he’s open if an offer comes in from the next administration, Chua said “I haven’t received any offer. I think there’s a time for everything and my time is called somewhere else.”
Marcos will inherit a strong and recovering economy with its gross domestic product growing 8.3 percent in the first quarter, which is significantly better than the 3.8 percent contraction last year.
However, the government is also facing a record of over P12 trillion in national debt due to the heavy borrowings during the pandemic and the Build, Build, Build program prior to COVID-19.