Marcos Year 2

[In This Economy] Marcos Year 2: Missed targets, missing reforms

JC Punongbayan

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[In This Economy] Marcos Year 2: Missed targets, missing reforms
Apart from record inflation, we can safely say that anemic growth is a hallmark of the economy during Marcos’ first two years

We’re past the two-year mark of the administration of President Ferdinand Marcos Jr. But so far, it’s been…underwhelming.

Nothing substantial is happening by way of economic recovery and reforms. Funnily, Marcos is also making little to no progress on his avowed priorities.

For starters, the price of rice averages P51 to P56 per kilo, more than double the P20 per kilo Marcos promised in the 2022 campaign trail.

Even though inflation has gone down from a peak of 8.7% in January 2023 to 3.7% in June 2024, rice turns out to be the single biggest culprit explaining why inflation is still quite high – accounting for nearly three-fourths of food inflation.

If only Marcos had done a better job at tempering rice prices, overall inflation today would be much, much lower.

It’s not as if the government has been doing nothing. Most recently, the economic managers pushed for a reduction of rice tariffs from 35% to 15%. The Department of Agriculture is also launching “Program 29,” which entails selling rice at P29 per kilo in select areas.

But let’s face it: these are all stopgap measures to hide the fact that they’ve failed miserably to deliver on the original campaign promise of P20 per kilo.

Not much is happening as well with Marcos’ pet project, the Maharlika Investment Fund. Its head, Rafael Consing Jr., was appointed in November 2023. But until now, Maharlika is still just composed of its board of directors.

Reportedly, Maharlika is still requesting approval for its proposed organizational structure. Until they can get such approval from the Department of Finance and the Governance Commission for GOCCs, they won’t be able to push through with any of the investments promised to spur economic growth and development.

Another priority that seems to have stalled is economic charter change. From saying that it’s “not a priority” in 2022, Marcos put charter change high on his 2024 agenda.

Congress managed to railroad a resolution pushing for the liberalization of three specific sectors (higher education, advertising, and public services). But this effort seems to have been successfully blocked by the Senate, whose very existence is threatened by the planned modalities of pursuing charter change (the issue of voting separately or jointly).

But even without the Senate’s intervention, Marcos himself doesn’t seem to care too much about economic charter change these days.

All said, he seems to be taking it easy – which is not at all out of character for him.

Off the mark

Maybe Marcos’ inaction on his pet projects is a blessing in disguise: we’re spared from the ill effects of Maharlika and economic charter change, as warned by economists (including us at the UP School of Economics) and other analysts in the past two years.

But we should be more alarmed that the economy has permanently failed to get back to its pre-pandemic trajectory.

From 7.7% when Marcos took office, economic growth has dropped to 5.7% in the first quarter of 2024. That’s lower than the 6-7% target they’re aiming for this year.

I’ll never tire of saying this: for us to get back to our pre-pandemic growth trajectory by the end of Marcos’ term, we will need no less than 10.3% growth yearly from 2024 to 2028. That’s impossible at the rate we’re going. So the chances of a full recovery are now nil.

The reasons for anemic growth? A slowdown of just about all major spending categories in our economy. Even the government is having a hard time spending (believe it or not).

Of course, another reason is that the Bangko Sentral ng Pilipinas (BSP) has raised its policy interest rate significantly since 2022. You see, higher interest rates discourage spending. But who can blame the BSP for pursuing this policy? Higher rates are their standard response to a steep acceleration of prices.

What this means is that if only the Marcos administration did a better job in managing inflation, maybe the BSP need not have increased their policy rate so much. And maybe our economy won’t be growing as slowly as it is now.

Everything boils down to urgent and decisive (economic) governance – something that Marcos failed to deliver in his first two years.

Marcos also missed the mark when it comes to the promise of attaining upper-middle income country (UMIC) status. On July 2, the World Bank released its updated classification of countries based on income status. Alas, we’re still deemed a lower-middle income country – we’ve been like that since 1987, when the World Bank first made such a classification. We’re stuck in a rut.

Just last year, Indonesia made the fateful crossing to UMIC status. Vietnam, much poorer than us just a few decades ago, is also set to transition soon.

When Marcos took office, Secretary Arsenio Balisacan of the National Economic and Development Authority projected that we might achieve UMIC by 2024. That didn’t come true.

Then in 2023, he said we might achieve UMIC by 2025. Most recently, on July 27, he again revised his projection, saying now that UMIC might come true “towards the latter part of 2025 or early 2026.” This echoes the latest estimate of the World Bank itself.

Hence, apart from record inflation, you can safely say that anemic growth is a hallmark of the economy during Marcos’ first two years.

At least on the investment issue, Marcos has tried his darndest to attract investors with his globetrotting: bringing him across the world, from an F1 race in Singapore to as far as the Czech Republic.

Said the Department of Trade and Industry, Marcos’ wanderlust yielded $61.3 billion worth of foreign investment pledges as of June 2024, and nearly a third of that ($19 billion) has allegedly pushed through. But nobody has released the investment list for vetting. For its part, the Labor Department said that those investments will likely generate about 200,000 jobs.

The problem is that for all we know, they could be pulling numbers from thin air!

Even supposing the investment figures are accurate, why aren’t they reflected in the official statistics? In fact, foreign direct investments have been constantly dropping since 2021!

Still no big reforms

So Marcos has broken big promises, and the economy in his two years is just coasting along.

But perhaps the most frustrating thing is that Marcos is not leveraging his substantial political capital to push for much-needed, game-changing reforms.

For instance, he appointed Vice President Sara Duterte as education secretary, who delivered close to nothing because she also knew nothing about education to begin with. (Her stint was most memorable perhaps for her unusual request for confidential funds for the Department of Education or DepEd.)

With Duterte leaving DepEd recently – good riddance! – Marcos appointed another politician, Senator Sonny Angara, who for context couldn’t run again for the Senate in 2025. He’s an improvement for sure, but do we really need another politician leading DepEd? And will he come anywhere close to reducing the dire 90% learning poverty rate of the country? This remains to be seen.

Marcos could also be using his clout to abate the fiscal crisis staring us in the face because of ballooning military and uniformed personnel (MUP) pensions. But this seems to be low on (if not totally absent from) Marcos’ priority list.

Many other issues demand the President’s attention: the looming depletion of Malampaya’s natural gas reserves, the planned construction of more destructive expressways (like those along the Pasig River and Laguna de Bay’s lakeshore), climate change, the crime-ridden POGO hubs, shenanigans in the national budget, continuing discrimination against the LGBTQ+ community, and much, much more.

What, instead, is Marcos focused on? The whitewashing and rehabilitation of his family’s murderous and corrupt name. And he seems to be succeeding: fewer and fewer people seem willing to hold accountable the Marcoses for the atrocities dealt by their dictator-patriarch, Ferdinand E. Marcos.

If there’s one thing to be lauded, though, it would be Marcos’ stance on the West Philippine Sea. Sure, it’s a vast improvement. But never forget that his predecessor, Rodrigo Duterte, set the bar pitifully low.

As we enter Marcos’ third year in office, his clout and influence as president are diminishing faster than he might realize. The space for meaningful and earth-shaking reforms is also fast dwindling.

Best to pursue these reforms now, before politics distracts and gobbles up everyone starting next year. –

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. In 2024, he received The Outstanding Young Men (TOYM) Award for economics. JC’s views are independent of his affiliations. Follow him on Twitter/X (@jcpunongbayan) and Usapang Econ Podcast.

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  1. ET

    I greatly appreciate Prof. JC Punongbayan for providing an accurate and realistic description of the Philippine economy during the first two years of President Marcos Jr.’s administration. He pointed out that the economy was experiencing inflation and was sluggish. Additionally, he cautioned that although the Presidential Wanderlust may seem to have attracted real investments and created jobs, these statistics are likely not credible. Finally, it wouldn’t be surprising if President Marcos Jr. fails to pursue reforms that benefit society, as his true intention appears to be protecting his family’s interests.

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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.