President Ferdinand Marcos Jr. has largely met my expectations for this year’s State of the Nation Address (SONA): an elaborate attempt to window-dress the economy, to make it appear rosier than it actually is.

About 63% of Filipinos said in a recent survey that inflation is the most pressing social issue.

Marcos acknowledged this in his SONA, and gave assurances that the “Inflation rate is moving in the right direction.” Indeed, inflation has gone down from a peak of 8.7% in January 2023, to 5.4% in May.

But one must ask: why did inflation have to skyrocket to a 14-year high in the first place? Marcos omitted explaining this.

He boasted that the reintroduced Kadiwa stores (first introduced by his father during Martial Law) helped a lot to reduce food prices. In addition, Kadiwa supposedly helped 1.8 million families so far. A weird flex, since that’s just less than 7% of all households in the Philippines.

Only a select few enjoyed Kadiwa, and some food items sold there are still quite expensive. Yet the President plans to expand this patently Band-Aid solution.

Then he said one blatant lie: “In the past months, we saw the reduction of prices in different sectors.” In fact, prices of all goods and services have increased since last year – save for those related to transportation and financial services.

Marcos said he’ll go after food smugglers and hoarders. But if they’re so angry with smugglers, why did the government sell smuggled sugar in Kadiwa stores?

Note that there was also literally no mention of his concrete campaign promise of bringing down rice prices to P20 per kilogram. (READ: No, Mr. President, malayo pa tayo sa P20/kilo ng bigas)

Growth figures

Marcos also painted a rosy picture when it comes to growth.

He said that the 7.6% output growth in 2022 was “our highest growth rate in 46 years” (correct) and that “We are still considered to be among the fastest-growing economies in the Asian region and the world” (correct again).

But as I explained in previous pieces, there’s missing context. These relatively high growth rates of late mask the permanent scars left behind by the pandemic. Also, we will need more than 9% annual growth if we are to go back to our economy’s pre-pandemic trajectory by 2028.

The 6.4% growth in the first quarter of 2023, while rightly “within our target of 6 to 7 percent for 2023” as claimed by Marcos, is also the lowest in nearly two years.

One reason could be that sky-high prices discouraged spending by households. Growth could have been higher if only the Marcos government abated inflation early on.

Marcos also boasted that “revenue generation has improved this past year.” But this is a no-brainer, a by-product of the country’s (inadequate) post-pandemic recovery.

Then he said that tourism is “headed for a great rebound.” Quite a contrast with the lofty claims of tourism secretary Christina Frasco, who recently cherry-picked official statistics to show that “the Philippines is back.” (READ: How the Marcos gov’t lies with statistics)

Maharlika fund and investments

Quite predictably, Marcos mentioned something about the recently enacted Maharlika Investment Fund law.

After all, for months they have been touting Maharlika as an economic cure-all, one that can boost infrastructure spending and even generate jobs.

Surprisingly, though, the President devoted just six sentences to Maharlika, repeating some of the lies and inaccuracies he blurted right after signing the law on July 18.

Most notably, he said, “A group of internationally recognized economic managers shall oversee the operations of the Fund, guided by principles of transparency and accountability.” He added, “This guarantees that investment decisions will be based on financial considerations alone, absent any political influence.”

But this is exactly what economists and other analysts have been worrying about. (READ: Economists vs Maharlika: Some key points)

For instance, all members of the Maharlika Investment Corporation’s board of directors will be presidential appointees. The lack of independence from political figures will almost certainly taint the Maharlika fund, making it susceptible to interference and abuse – just like what had happened to Malaysia’s 1MDB.

In other parts of the SONA, Marcos said his government is “aggressive in [their] investment and business promotions and facilitations.” Also, his multiple foreign trips (also known as “economic missions”) have “yielded an estimated total investment value of 71 billion US dollars, or 3.9 trillion pesos, with a potential to generate 175,000 jobs.”

Wait a minute. All those are investment pledges. None of that has yet arrived.

More importantly, absent any effort to fix many long-standing barriers to foreign investments (red tape, myriad permits, high cost of power), we will continue to have a huge investment gap, and investors won’t flock to the country.

The President’s refusal to abide by the international legal order (based, say, on his stance of cutting ties with the International Criminal Court), could also leave a bad taste in the mouths of prospective investors. Who will want to invest in a country where the government can’t commit to the “rules-based international order”? (A phrase which, ironically, found its way into the President’s SONA.)

Authoritarian nostalgia

Unlike the inauguration speech and the first SONA, the second SONA featured little by way of rekindling Martial Law nostalgia.

There was some mention about Kadiwa stores (as a stopgap measure against inflation) and the grand finale was “Bagong Pilipinas” or New Philippines (reminiscent of Marcos Sr.’s “Bagong Lipunan” or New Society).

On the one hand, I think this is a function of the fact that the economy has evolved a lot over the decades, and is a far cry from the economy during Marcos Sr.’s time. There was a lot of mention about renewable energy, the IT-BPO sector, internet speeds, and the “circular economy.” Modern times call for modern programs and policies. There’s a limit to the extent he can hark back to his father’s regime.

Then again, maybe this is also Marcos Jr.’s way of making a name for himself, a way to distinguish his administration from his father’s.

Sadly, though, the second SONA ended up being more of a list of activities, rather than a sincere discussion of the real state of the nation, or an evaluation of where we are vis-à-vis targets.

The SONA also sorely lacked strategies to address the multiple crises we’re currently facing in sectors like education, agriculture, and energy.

There’s also no mention at all about the situation in the West Philippine Sea, the brewing war over nearby Taiwan, human rights, and press freedom. He did mention the drug war: “The campaign against illegal drugs continues – but it has taken on a new face.” But is this a renunciation of the Duterte-era bloody drug war? Note that drug killings have not ceased.

Non sequitur

Most of all, the SONA lacked vision and inspiration. There’s no spark that’s supposed to rally Congress and the rest of the nation into action.

Near the end, Marcos said, “The state of the nation is sound, and is improving.” But he already said last year: “The state of the nation is sound.” Ho-hum.

Then the very end was, “Dumating na po ang Bagong Pilipinas” (The New Philippines is here). Is this supposed to be the money shot? It sounded more like a non sequitur. – Rappler.com

JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. JC’s views are independent of his affiliations. Follow him on Twitter (@jcpunongbayan) and Usapang Econ Podcast.