Africa also raised concerns about the country’s overreliance on external flows such as remittances and foreign investment, which are weakening amid the ongoing oil price shock.
IBON Foundation executive director Sonny Africa believes that the economic situation started to worsen in 2017. The slide accelerated under President Ferdinand Marcos Jr.’s watch.
PHOTOGRAPHS courtesy of Ibon Foundation
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When the Philippines’ so-called “active economic policy is not economic policy,” the tendency favors regression instead of progress.
IBON Foundation executive director Sonny Africa, during Wednesday’s episode of DAILY TRIBUNE’s Straight Talk, dived deep into the pressing issues surrounding today’s socio-political and economic landscape under the current administration.
Structural economic pressures and weak industrial policy are the main features of the current dispensation.
With the glaring 7.2 percent inflation rate, Africa noted that it was not an abrupt development but part of a gradual trend that began under the previous administration. He pointed out that inflation had peaked at 7.1 percent in 2017, indicating that the country was economically vulnerable even before the pandemic.
The decline of manufacturing and agriculture is also evident, with the manufacturing sector now accounting for only about 17 to 18 percent of the Gross Domestic Product (GDP), its smallest share since 1949, while agriculture contributes only about nine percent.
Africa also raised concerns about the country’s overreliance on external flows such as remittances and foreign investment, which are weakening amid the ongoing oil price shock.
“It’s crazy,” he said, noting that the 7.2 percent inflation rate was not even caused primarily by tensions in the Middle East. Compared with other countries in the region, particularly Myanmar, which remains at war.
The Philippines has experienced one of the largest downturns due to a lack of sustainable local economic drivers.
The confluence of governance failures, regulatory issues, and corruption is hurting growth prospects.
According to Africa, the Philippines remains far from the “good governance” Filipinos have long hoped for, as the government has failed to intervene and regulate effectively amid the crisis.
Voicing what many Filipinos are feeling, Africa noted that despite declaring a state of national energy emergency, the government is “acting as if there is no emergency. It’s not taking over oil pricing. It is not cutting oil taxes. It is not actually implementing a price freeze.”
Crisis mismanaged
He pointed out that neighboring countries such as Vietnam, Laos, Myanmar and Cambodia had already suspended taxes in March when the conflict escalated at the end of February.
“The biggest policy failure of the Marcos administration right now is this huge mismanagement of the oil shock. But on a long-term basis, it is weak industrial policy,” Africa stressed, citing decades of reliance on outdated liberalization, privatization and deregulation policies.”
“The Marcos administration is just sort of repeating the sins of the past,” he added.
Highlighting the country’s long-standing political issues, Africa said anti-corruption efforts remain selective, while elite and oligarchic influence continues to shape policymaking.
“The current budget still has so much pork barrel and traditional corruption folded into it. These anti-corruption drives are more episodic than part of a systematic reform movement,” Africa said.
“I don’t think it’s a coincidence that three of the five biggest political parties in the country consistently hold maybe a third to 40 percent of the Senate, the House, and the governors,” he added.
Poverty, hunger and social risks impact ordinary Filipinos.
Africa pointed to the alarming realities faced by ordinary Filipinos, including rising poverty and food insecurity, the prevalence of informal and low-paying jobs, and weak government support systems that continue to burden people experiencing poverty.
“When we talk about the poorest Filipinos, we’re not talking about just the absurd official poor of about 10 to 12 percent of families. I mean, they use this crazy P92 per person per day benchmark,” Africa explained.
IBON Foundation places the real number at around “20 million Filipino families who are not even earning the family living wage because seven to eight out of 10 jobs are actually informal work, and about 40 to 50 percent of wage earners are at minimum wage or below.”
Citing a United Nations Food and Agriculture Organization (FAO) study last year, he highlighted that “50 percent of Filipinos are moderately or severely food insecure.”
Amid the challenging cost of living, Africa noted that around 80 to 85 percent of low-income families spend most of their income on essentials such as rent, utilities, water, electricity, transportation and communication.
Even a small increase in inflation, he said, can mean losing access to a basic necessity.
“Things are more expensive, fewer people are working, and wages are not going up,” Africa noted.
Despite the country’s rich natural resources and geographic advantages, the figure reflects a system that prioritizes the interests of select groups and individuals entrenched in politics, all under the banner of “democracy.”
