Jonathan Ravelas and Prof. Victor Andres ManhitProf. Victor Andres Manhit, founder and managing director of Stratbase Group and president of its policy think tank, the Albert del Rosario Institute for Strategic and International Studies, described the political situation of President Duterte’s government as “at the crossroads” as it is currently lodged “halfway in his term; half-full in terms of accomplishments; and at that juncture of defending his legacy and achievements while simultaneously carving out a future scenario free of legal compromises.”
At the annual economic and political briefing that starts the budget planning process for the Lopez Group, Manhit reminded key officers and staff members that Duterte is a “populist leader who projects to outrun the ‘past’ and break its traditional practices.”
According to him, Duterte continues to enjoy high approval ratings marked by the public’s perception of consistent exercise of political will, a deep personal connection with constituents and an ability to define key visions for the country.
“The President, who strategically uses social media to circumvent mainstream media outlets that he decries as biased and hostile, sustains broad sectoral support by exploiting popular frustration of the Filipino people with the traditional economic and political elite,” he said.
Duterte’s unorthodox style of leadership and populist policies are expected to persist throughout his term. “He has successfully identified himself as one of the marginalized and disenfranchised sectors… projecting an ‘anti-elite’ image,” said Manhit. The biggest challenge for the government is “reducing poverty and addressing inequality amidst economic growth.”
The President has gained headway on this objective as self-rated poverty went down in the First Quarter (March) 2019 Social Weather Survey by Social Weather Stations (SWS). The number of Filipino families that considered themselves poor fell to a record low of 38%, estimated at 9.5 million families. Self-rated poverty was recently highest at 52% in the Third Quarter (September) 2018 SWS survey and 50% in the Fourth Quarter (December) 2018 SWS survey.
In the same briefing, Jonathan Ravelas, first vice president and chief market strategist of BDO Unibank Inc., said the Philippine economy is expecting to grow by 6% this year and 6.5% next year in terms of gross domestic product (GDP), on the back of upbeat consumption and investments. He also expects inflation to average 3% in 2019 and 3.1% in 2020.
Due to the devaluation of the Chinese yuan in response to the trade war with the United States, he expects the peso to end the year at 52.50 against the dollar, and weaken further to 53.00 in 2020.
Despite global turbulence, the Philippines remains among the top 10 fastest growing economies in Asia. Ravelas underscored the country’s strengths and opportunities given its growth momentum, having had 14 quarters of above 6.0% GDP growth; a large young, working-age population, also called the demographic dividend; its skilled, English-speaking and trainable workforce; and engagement in digitalization.
PH weaknesses, strengths
At the same time, he recognized the country’s weaknesses and strengths, among them high unemployment and underemployment; poverty or income inequality; poor infrastructure; an imbalanced, services-led economy; the widening gap in education, which the K-12 program is addressing; and regional conflicts which may negatively impact on remittances.
Based on government’s requested budget, Ravelas counted 170 nationwide infrastructure projects that are ongoing or awaiting funding and 68 projects covering two or more regions. Due to increased infrastructure spending, he sees opportunities in the agribusiness, tourism, manufacturing, infrastructure and construction, power and energy, and business process outsourcing industries.
These industries further fuel the growth of the education, health care and community building or social services sectors because of the need to develop and increase the productivity of the country’s workforce. (Story/Photos by: Carla Paras-Sison)