Two years onwards: Wins and near-misses

After two years of Ferdinand Marcos Jr.’s presidency in the Philippines, a clearer picture of his administration’s overall direction and plans for the nation has emerged. The year 2024 presented significant challenges for the administration across economic and foreign policies, testing its resilience and strategic vision.

As President Marcos prepares to deliver his third State of the Nation Address (SoNA) today, 22 July, the DAILY TRIBUNE reviews key achievements and areas where more could have been done in his second full year in office, focusing on economic performance, diplomatic advances, and future prospects.

Economic performance

One of the most notable achievements of Mr. Marcos’ second year was the country’s economic recovery, despite global uncertainties. The Philippines saw a rebound in gross domestic product (GDP) growth, with data from the Philippine Statistics Authority (PSA) showing a 5.7 percent increase in the first quarter of 2024, up from 5.5 percent in the previous quarter.

Although the government revised its growth targets downward from the initially set 6.5-7.5 percent range to 6-7 percent, this new target was slightly below most economists’ median forecast of 5.9 percent.

Government spending on the demand side increased by 1.7 percent in the first quarter of 2024, rebounding from a -1.0 percent contraction in the previous quarter. However, household spending slowed, growing by 4.6 percent compared to 5.3 percent in the previous quarter.

Investment saw a significant drop, contracting to 1.3 percent from 11.6 percent in the fourth quarter of 2023. Conversely, exports of goods and services grew by 7.5 percent, while imports increased at a more moderate rate of 2.3 percent. On the supply side, services grew by 6.9 percent, industry by 5.1 percent, and agriculture by 0.4 percent.

While the administration made strides in fostering economic prosperity, it faced challenges such as high government debt, inflation, and poverty. Inflation has strained household budgets, particularly for lower-income families.

The Philippine Statistics Authority reported that inflation for all income groups decreased to 3.7 percent as of June, but the bottom 30 percent of income households experienced a rise to 5.5 percent.

Rice prices remained high, reaching 22.5 percent in June, causing discontent among Filipino households. Additionally, the growing national debt raised concerns about fiscal sustainability. Data from the Bureau of Treasury showed that the national government’s total outstanding debt amounted to P15.347 trillion as of May 2024, up 8.4 percent from P14.154 trillion in May 2023.

Diplomatic advances

On the international front, Marcos made notable strides in strengthening the Philippines’ diplomatic relations. The Philippines has fully returned to the international stage, improving its alliance with the US and enhancing strategic partnerships with Japan and Australia.

The G7 leaders and foreign ministers have twice expressed serious concern over China’s aggressive actions towards Philippine vessels in the South China Sea, demonstrating strong support for Manila. The Philippines has entered into new arrangements, including trilateral cooperation with the US and Japan and emerging quadrilateral security cooperation involving the US, Japan and Australia.

However, rising tension in the West Philippine Sea challenges Marcos’ leadership. The China Coast Guard has intensified its maneuvers, including blocking, intimidating, ramming, and spraying water cannons at Philippine boats, resulting in injuries to Navy personnel.

The most violent altercation occurred on 17 June when the China Coast Guard boarded a Philippine Navy ship, wielding knives and machetes, puncturing inflatable boats, and seizing rifles. In the chaos, a Navy officer lost his thumb, and a mission to resupply troops on the BRP Sierra Madre at Ayungin Shoal failed. This physical assault was triggered by China’s new regulation, mandating its coast guard to detain foreign persons and vessels that trespass through the entire area it claims in the South China Sea.

Toward the future

If 2024 marked a year of achievements and setbacks for the Marcos administration, approaching 2025 and beyond requires renewed determination. The Marcos Jr. administration now finds itself at a pivotal juncture, needing to glean important insights from past mistakes to pave a more prosperous path for all Filipinos and the nation. With lessons learned, the administration must focus on sustainable economic growth, robust diplomatic strategies, and addressing internal challenges to ensure a better future.