Business World : Marcos seen having free hand to pursue Constitutional reforms

By Business World

LEADING presidential vote-getter Ferdinand R. Marcos, Jr. has no political debts that would tie his hands in pursuing Constitutional reforms, with a reversal of the current government’s policy direction seen as only the “worst-case scenario,” the Foundation for Economic Freedom (FEF) said.

“A BBM presidency is not invested in the 1987 Constitution and the CARP (Comprehensive Agrarian Reform Program) Law, and it has no leftists in its alliance,” FEF President Calixto V. Chikiamco said, referring to Mr. Marcos by the initials formed by his nickname “Bongbong.”

“It may be more open to amending them and continue the next stage of reforms. I am not saying it is inevitable, but based on politics and alliances, it may be possible for the BBM presidency to initiate (such) reforms,” he added.

Mr. Chikiamco was making a presentation at the Financial Executives Institute of the Philippines (FINEX) 5th General Membership Meeting.

“Of course, the worst-case scenario is that he will reverse all the reforms, or most of the reforms, that President Duterte did,” he added.

He said such a course of action would lead to “very low” growth, higher inflation and poverty levels, and more corruption.

Another “pessimistic” scenario is that Mr. Marcos Jr. neither rolls back nor introduces substantial reforms, with the current policies sufficient to keep growth momentum at 5% to 6% annually.

His optimistic scenario was robust growth of 8 to 10%, on the back of possible reforms to agriculture, labor markets, and the Constitution.

Mr. Calixto said in his presentation that Mr. Marcos inherits a “strong” economic foundation built around key economic reforms such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, the Rice Tariffication law, and the Build, Build, Build program.

He said the fundamentals remain solid due to the young workforce relative to the region’s ageing populations, as well as the potentially strong position held by the mining industry due to the growing importance of industrial metals which the Philippines has in abundance.

Overall, Mr. Calixto said he had a positive outlook for the next administration.

“Unlike most other economists, I am quite optimistic about the business environment for the next six years,” he said. “Especially with all these liberalization measures, and therefore would encourage you to invest in the Philippines.”

“An economy under a BBM presidency won’t be a disaster as some have predicted. The Philippines will become a good investment destination. Respond by investing, innovating, and competing,” Mr. Chikiamco said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said he concurs with the optimism over the economy being left to Mr. Marcos.

However, he cautioned that “there are challenges now such as the increased debt incurred by the government, especially during the pandemic, that needs to be tackled by the incoming administration.”

Ruben Carlo O. Asuncion, UnionBank of the Philippines, Inc. chief economist, was more cautious in his outlook.

“It is true that important reforms are already in place, but there are still the pandemic effects that we have to deal with. Moreover, the Ukraine-Russia conflict impact has yet to be fully felt as inflation is still unfolding.”

Mr. Asuncion said he does not expect Mr. Marcos to reverse or alter the current policy direction and sees a 5-6% growth to be likely.

“Nevertheless, I think that the [Philippine] economy can do so much more and can work more efficiently,” he added. — Tobias Jared Tomas