“Much is expected of the next leader.”
Ferdinand “Bongbong” Marcos Jr. (BBM, for short) if he wins the presidency on May 9, 2022, will be a lucky chief executive.
BBM looks to me a sure bet for 2022.
An average of 16 major surveys, from October 2021 (SWS, BBM 47 percent; Leni 18 percent) to April 20-22, 2022 (Manila Bulletin-Tangere: BBM 51.54 percent; Leni 18.25 percent) yields 56.41 percent for Marcos and only 18.14 percent for Robredo after seven months. That’s a margin of 38.27 points, or 22.96 million votes assuming 60 million voters. No presidential candidate in history has piled up so huge an advantage—about 23 million votes. BBM will garner 33.84 million votes; Leni will be miserable with less than 11 million votes.
Even if BBM gives away half of his 23-million-vote advantage, or 11.5 million votes and these are added to Leni’s, the widow will get only 22.5 million votes—still 11.34 million less than Marcos Jr’s.
President BBM inherits from President Duterte a robust economy with strong fundamentals. Some of these fundamentals:
• Historic-high investment grade retained amid the pandemic (PH’s peers were downgraded);
• Record-high foreign investments which amounted to $10.5 billion in 2021, up 54.2 percent and exceeding the previous high of $10.3 billion in 2017, Duterte’s first full year;
• A large and growing market of 110 million people that is middle class with per person income of $3,300 a year;
• A modern infrastructure, thanks to “Build, Build, Build” that increased infra investment to 5 percent of GDP (2.7 times the 1.8 percent average of the previous 24 years) and created at least six million new jobs;
• Strong dollar income, thanks to remittances which amounted to $31.5 billion in 2021, up 5.1 percent;
–Declining unemployment which hit 6.4 percent in 2021, after hitting an unheard of 17.6 percent in April 2020, the height of the pandemic.
With an expected 6 percent GDP growth for 2022, Duterte will register average economic growth of 4.53 percent in six years—6.9 percent in 2017, 6.3 in 2018, 6.1 in 2019, -9.6 in 2020, and 5.6 percent in 2021.
Without the pandemic induced economic slump of -9.6 percent in 2020—a postwar record low. Duterte was going to score 6.2 percent average GDP growth in six years. Marvelous for someone who does not understand economics.
Assessing recent risks, Bangko Sentral Governor Ben Diokno said: “With its robust external sector and strong and steady dollar inflows, the country is well-equipped to manage risks. Armed with recent structural reforms and strong macroeconomic fundamentals, the Philippines is more than ready to be the world’s investment destination of choice.”
For his part, Carlos “Sonny” Dominguez is the most fulfilled economic czar and finance secretary in history.
“The election season will not be an issue. We have a long history of orderly and peaceful transfers of power.
“The next administration will inherit many hard-won reforms. They will enter the office with the basic groundwork for rapid growth already in place.
“Together, we have to create an economy that can provide sufficient taxes so the government can provide the necessary public goods for the continued prosperity of the Filipino people.
“Our fiscal consolidation plan will help us achieve this.
“We will continue working hard until the last hour of our mandate to contribute all we can to our economic resurgence.
“We have sailed through fine and rough weather. But President Duterte has proven to be a strong and steady captain of the ship.
“The waves may be high, but the ship of state has been masterfully steered.”
Meanwhile, the Manila-based Asian Development Bank has this risk assessment for 2022:
• The Russian invasion of Ukraine has heightened uncertainty and unsettled commodity markets.
• The pandemic persists, fueled by the Omicron variant. Milder health impacts and vaccination progress have allowed economies to remain more open than in previous waves.
• GDP in Asia will expand by 5.2 percent in 2022 and 5.3 percent in 2023, on continued recovery in domestic demand and solid exports. Inflation will rise to 3.7 percent in 2022 and 3.1 percent in 2023.
• ADB sees Philippine GDP growth of 6 percent in 2022 and 6.3 percent in 2023—the second highest growth rate in Asia, next to Vietnam’s 6.5 percent in 2022 and 6.7 percent in 2023..
• Risks include escalation of Russia’s invasion of Ukraine, financial instability triggered by the Fed’s aggressive tightening, emergence of more lethal COVID-19 variants, and disruptions associated with the People’s Republic of China’s (PRC’s) current outbreaks.
ADB sees several downside risks cloud the horizon:
• Escalating global geopolitical tensions arising from the Russian invasion of Ukraine could spill over to the region through sharper-than-expected increases in energy and other commodity prices.
• Aggressive tightening by the US Fed could trigger financial market volatility, capital outflows, and currency depreciations; raising financial stability risks in the region.
• The emergence of more deadly COVID-19 variants and the PRC’s current Omicron outbreak could jeopardize regional growth and supply chains.
• Learning losses from continued school closures threaten to further exacerbate economic inequality.
The Fed funds rate is to increase faster than the baseline:
• 1.9 percent by December 2022 vs. 1.1 percent in baseline.
• Up to 2.8 percent in 2023 vs. 2.1 percent in baseline.
This Fed rate increase, ADB says, may imply weaker global economic recovery and slower growth in developing Asia. “Policy choices will become more complex in the region,” the regional lender frets.
• Inflation could accelerate, as exchange rates depreciate along with capital outflows.
• Raising interest rates to stem capital outflows is an option but may choke domestic demand and slow the recovery.
At bottom, with a huge and unprecedented mandate, a President Marcos Jr will have plenty of political capital and goodwill of his people to face any storms– economic, political and security. Much is expected of President Bongbong. The Philippines is his to fail.