Philippine economy

[In This Economy] Marcosian ‘delulunomics’

JC Punongbayan

This is AI generated summarization, which may have errors. For context, always refer to the full article.

[In This Economy] Marcosian ‘delulunomics’


At the rate growth dipped from 2022 to 2023, 8% growth is a moonshot. This is peak delulu. If we settle at 5.6% from now on, we will never ever get back to the pre-pandemic trajectory.

It almost goes without saying that it’s crucial for our country’s leaders to have a firm grasp of economic issues. But what happens when the president himself doesn’t have this knowledge?

That’s exactly what I asked myself when I watched a recent Bloomberg interview of President Ferdinand Marcos Jr. The first half focused on West Philippine Sea issues, the second touched on the economy.

The interviewer, Haslinda Amin, asked Marcos whether the growth of the Philippine economy is sustainable. Amin noted that Marcos is “sitting on one of the fastest-growing countries in Asia.”

In reply, Marcos said, “I think so. Much of the policies that we have taken on are really to spur growth. That’s the most important part because it is only growth that will pull us out of the morass that was left after the pandemic.”

Contrary to this, however, growth seems to be sputtering of late. In 2023, growth dipped to 5.6% from 7.6% in 2022. That’s a huge drop.

I already wrote before that for us to go back to the pre-pandemic trajectory by 2028, we need growth to be as high as 10.3% yearly until 2028. If we settle at 5.6% from now on, we will never ever get back to the pre-pandemic trajectory.

Clearly, we’re lacking in terms of the growth-spurring policies Marcos was talking about.

This brings me to the next question of Amin. She asked Marcos whether it’s possible at all to reach 8% growth within Marcos’ term.

After a few seconds, Marcos replied confidently, “Sure! Why not? We always plan for the ideal. We don’t plan for a mediocre result. We plan for a very good result. And as I said we just need to adjust along the way as we continue to transform the economy. But I think it is doable.”

I’m sorry but this made me laugh out loud. At the rate growth dipped from 2022 to 2023, 8% is a moonshot. As an economist friend remarked on Twitter/X, “6% nga hirap na, 8% pa kaya. 😂” (Already having a tough time at 6%, how much more for 8%.) This is peak delulu.

But we must ask: why is growth slowing down anyway?

For one, consumption spending has faltered, largely because of the runaway inflation from 2022 to 2023 – inflation that Marcos failed to rein in. And Marcos, as concurrent agriculture secretary, was in an ideal situation because nearly half of inflation then was due to food prices.

Because of high inflation, the Bangko Sentral ng Pilipinas was forced to hike interest rates – a move that further slowed down some sectors of the economy, especially when it came to investments.

If Marcos had controlled inflation, the Bangko Sentral wouldn’t have had any reason to hike its policy interest too high and for too long. Consequently, the economy need not have suffered too much.

Put another way, if there’s one person to blame for anemic economic growth, Marcos need only bring out a mirror.

Curiously, in the interview, Marcos said in response to a question about whether interest rates might soon come down, “We’re still battling inflation. Inflation is still our biggest problem. When you separate core inflation to inflation that involves agri products for example, you can see that the core inflation, we’re doing rather well in terms of controlling it. But again it’s the shocks that keep coming in.”

This contrasts with reality, because as of February 2024, inflation has in fact come down to just 3.4%. That’s already well within the government target of 2-4%.

Sure, 3.4% inflation is still quite high, and it could be a lot lower if not for rice inflation which, at 24% is at its highest in 15 years. But overall inflation is much less of a problem now, at least compared to January 2023 when it reached a 14-year high. I wonder why Marcos left out this positive development.

The core inflation that he mentioned is also not quite right; core inflation refers to inflation sans food and energy prices. And I wonder why he had to distinguish it from overall (“headline”) inflation, when the graph below shows that both are almost at the same level anyway.

More importantly, Marcos’ statement can be translated into this: inflation is going down a lot if not for food and energy prices. But when you break down the data, rice is the one causing a real uptick in inflation.

Again, what did Marcos do, if any, to abate rice prices and prevent excessive rice inflation due to El Niño? I hope the next journalists interviewing Marcos get to ask ask about how Marcos sat on El Niño, which is currently stoking rice prices. I hope they can get the chance as well to follow up on the infamous campaign promise of P20 per kilo of rice – another impossible dream.

When asked if it’s time for the Bangko Sentral to finally lower interest rates, Marcos puffed up his cheeks, exhaled sharply through his mouth, and said, “We look at it almost every week to see if it’s time to bring down the rates, we’re not yet there.”

If by “it” he was referring to inflation, it would be weird because inflation is published monthly, and there’s no new inflation data every week. At any rate, it’s the Bangko Sentral, particularly its highest policymaking body (called the Monetary Board), that should be deciding whether or not to change interest rates.

Finally, Marcos was asked whether he’s “comfortable” about the peso reaching a three-month high against the US dollar.

Reflexively, Marcos said, “Yes, because it is an indication of the strength of the economy.” He said he takes it as an “affirmation that the economy has grown stronger,” and that it has “gained strength.”

But basic economics tells us that’s untrue.

For one thing, if the peso is strong, that might hurt our export industry, reducing the competitiveness of Philippine export products in the international markets.

Second, the peso might be strong for now not because the peso is strong but because the dollar is weak. He might want to take a cue from his son Sandro, who once controversially said in 2022, “The peso is not weak because the peso is weak. The peso is weak because the dollar is strong.”

And why is the dollar weak? With the US Federal Reserve (their central bank) saying recently that they are eyeing three interest rate cuts this year, US assets are not too hot these days, and investors will want to invest elsewhere. This will temper demand for US dollars, weakening its value vis-à-vis other currencies, including the Philippine peso.

Marcos further said (weirdly) that because the exchange rate is a “relative measure…the dollar has not depreciated. So if the value of the peso is increasing, then that is a good indication that, again, the economy has gained strength.”

But if the peso appreciated (or strengthened) against the US dollar, then the dollar necessarily depreciated against the peso! They’re two sides of the same coin. This is basic economics.

Of course, Marcos had a hard time with economics when he was much younger. At Oxford, he initially failed Politics and Economics. He passed Economics only after he was tutored by the esteemed economist Winnie Monsod. Alas, having failed Politics again, he never graduated from Oxford and was only given a “special diploma.”

Marcos will do more interviews with foreign journalists, and I hope (for his sake) that the economic advisers do a better job of briefing him on economic issues and concepts.

More importantly, I hope that Filipinos see through Marcos’ calm and confident delivery the fact that, until now, he doesn’t have a firm grasp of economics. This reminds me of the aphorism, “Fake it till you make it.” In the future, let’s demand more from our leaders.

Watch the full interview here. –

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.

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  1. ET

    I appreciate Prof. JC Punongbayan’s insight when he said, “I hope that Filipinos see through Marcos’ calm and confident delivery the fact that, until now, he doesn’t have a firm grasp of economics.” That is true, but how many Filipinos can see it? Given President Marcos Jr.’s mastery of disinformation and the disinformation machinery of the Marcos-Romualdez political dynasty, that kind of Filipino will always be a few. Secondly, I like the aphorism: “Fake it till you make it.” How about: “Fake it more if you do not make it, but you want to deceive the people that you make it.”

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JC Punongbayan

Jan Carlo “JC” Punongbayan, PhD is an assistant professor at the University of the Philippines School of Economics (UPSE). His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for He is also co-founder of and co-host of Usapang Econ Podcast.