By Erika Mae P. Sinaking, Reporter
Pexcel John Bacon and Kaela Patricia B. Gabriel
PRESIDENT Ferdinand R. Marcos, Jr. will deliver his fifth State of the Nation Address (SONA) on Monday, entering the final two years of his six-year term under growing pressure to show that his administration can convert economic gains into tangible improvements in living standards while strengthening governance, restoring public trust and addressing security challenges.
The annual address before a joint session of Congress is expected to lay out the administration’s legislative agenda through 2028 and signal how Mr. Marcos intends to secure his policy legacy as political attention gradually shifts toward the next presidential election.
“Two years is a long time,” Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. told BusinessWorld by phone. “The priorities should be lowering the prices of goods, controlling inflation, improving our geopolitical relationships and restoring the confidence of local and foreign investors.”
The speech comes after a year marked by slowing but resilient economic growth, renewed volatility in global oil markets following the Middle East war, continued maritime tensions with China and heightened scrutiny over public spending after investigations into anomalous flood control projects.
Mr. Marcos is expected to outline priorities on food security, infrastructure, energy, digitalization, defense modernization and investment promotion while reassuring the public that his administration remains focused on delivering results despite political distractions.
Business groups will be watching for policy signals on taxation, energy, infrastructure and regulatory reforms, while labor organizations are expected to push for stronger measures to cushion households from higher living costs following the implementation of Metro Manila’s latest minimum wage increase.
ECONOMY IN FOCUS
Economists said the President should use his address to explain how the government intends to strengthen the economy against external shocks while ensuring growth becomes more inclusive.
“The President must acknowledge the need for the economy to be resilient to looming crises both internal and external,” Christopher James R. Cabuay, a De La Salle University economics associate professor, told BusinessWorld in an e-mailed reply to questions.
Former Finance Undersecretary Cielo D. Magno said Mr. Marcos should explain how the government plans to shield households from economic uncertainty while keeping public finances sustainable.
“We have to make sure that government spending is really strategic and beneficial to the economy and the people,” she said via Viber, adding that debt management, human capital development, industrial policy and spending discipline should remain priorities.
The National Government’s outstanding debt stood at P18.55 trillion as of May, according to the Bureau of the Treasury.
Ms. Magno said Filipinos need assurance that public funds are being spent efficiently and that government programs could reduce households’ vulnerability to rising prices.
She added that this year’s SONA should answer not only what the administration has accomplished but also how it intends to prepare the country for future economic shocks.
The broader economic picture offers both opportunities and challenges.
The World Bank earlier this month classified the Philippines as an upper-middle income economy after gross national income per capita reached a record $4,850, exceeding the threshold for the income category.
The administration has also cited average annual gross domestic product growth of 5.8% over the past five years, reflecting the economy’s recovery from the pandemic.
Inflation eased to 6.4% in June from 6.8% in May, according to the Philippine Statistics Authority, although the January-to-June average of 4.8% remained above the Bangko Sentral ng Pilipinas’ 2%-4% target.
Lower transport and fuel prices helped slow inflation, but food prices continued to weigh on household budgets.
For many Filipinos, however, macroeconomic gains have yet to translate into easier daily living.
Mark Noel G. Nueva, a 27-year-old motorcycle delivery rider from Quezon City, said higher fuel prices have sharply reduced his earnings.
“I switched jobs after the pandemic, only to face this issue of high fuel costs,” he said in Filipino. “Ever since the war in the Middle East started and drove up prices, it has been a massive problem for riders like me who just want to work.”
He said filling up his motorcycle now costs nearly twice as much as before, reducing the income he brings home each day.
Mr. Cabuay said the administration would likely highlight the country’s upper-middle income status, but warned that many Filipinos do not automatically associate the designation with better living conditions.
“While this sounds great, I do not think that many of our citizens believe that this in fact means a better life for everyone,” he said. “Sure, it is good that there is growth, but I do not think it is enough to uplift the life of every person.”
EXECUTION OVER PROMISES
Business groups said the administration’s final two years should focus on implementing reforms rather than announcing additional programs.
Management Association of the Philippines President Donald Patrick L. Lim said this year’s SONA should mark a decisive shift toward economic execution.
“Filipinos are feeling the pressure of high living costs, businesses are facing uncertainty, and many MSMEs (micro, small and medium enterprises) continue to struggle,” he said in a statement. “We must fight corruption decisively, but we should not let the fight against corruption become a brake on economic growth.”
The Makati Business Club likewise urged the administration to push governance reforms, including the Right to Information Act and an Anti-Political Dynasty law, while strengthening tax administration and supporting the digital and green economy.
Mr. Cabuay said governance issues, including the impeachment trial of Vice-President Sara Duterte-Carpio, also have economic consequences.
“Weaknesses in governance and legislation send a signal domestically and internationally of the inability of the state to provide basic public services,” he said.
Political Economic Elemental Researchers and Strategists President Edmund S. Tayao said Mr. Marcos is likely to emphasize agriculture and national security during the remainder of his term.
He said agriculture remains closely linked to trade diversification as the Philippines seeks to reduce vulnerabilities created by geopolitical tensions.
The administration has also expanded defense cooperation with countries including Britain, France, Germany and Japan while maintaining its alliance with the US.
Mr. Tayao described Mr. Marcos as a “policy wonk” who focuses on formulating programs but might struggle with the “wheeling and dealing” required to move legislation through a fractured Congress.
“The lack of people that he could trust has weakened the capacity for governance,” he told BusinessWorld by phone. “He finds it difficult to deal with people he thinks he should not be dealing with.”
Exporters, meanwhile, are seeking stronger government support following the recent US decision to impose tariffs on most Philippine exports over forced labor concerns.
British Chamber of Commerce of the Philippines Executive Vice-Chairman Chris J. Nelson said expanding market access through trade agreements has become increasingly important.
“Trade and trade agreements are even more important,” he said. “It’s very important for the Philippines to expand its trade area.”
Asian Consulting Group Chief Tax Adviser Raymond “Mon” A. Abrea said the administration still has sufficient time to institutionalize reforms that could outlast Mr. Marcos’ presidency.
“Two years is sufficient to institutionalize reforms, even if it is not enough to solve every structural challenge,” he said in an e-mail.
University of the Philippines Manila professor Carl Marc L. Ramota said the President should use the address to present a governance agenda focused on accountability and public trust.
“The upcoming SONA presents an opportunity to outline a clear, citizen-centered roadmap prioritizing solutions over conflicts,” he said.
The President should use his SONA to reaffirm the Philippines’ position on the South China Sea while outlining concrete diplomatic and security initiatives to boost the country’s maritime rights without escalating tensions with China, analysts said.
“The President’s desire for a peaceful reset must not be mistaken for a willingness to overlook the safety of our men or the sanctity of our seas,” International Development and Security Cooperation President Chester B. Cabalza told BusinessWorld via Messenger. He said Mr. Marcos should pursue “diplomatic resolution instead of public insult to Beijing” while “not sacrificing any inch of our sovereignty.”
Hansley A. Juliano, a political science lecturer at the Ateneo de Manila University, said the government should pair diplomatic engagement with a more independent foreign policy by expanding partnerships beyond the US, strengthening its navy, coast guard and air force, and building greater regional support for Manila’s maritime claims. He added that the Philippines should work toward a unified Association of Southeast Asian Nations position on the South China Sea by securing a joint statement with regional and international partners. “The ultimate tactic is to isolate China further and continuously portray them as the bully and bad neighbor,” he told BusinessWorld via Messenger.
