Philippines to hit upper middle-income nation status? Why the next 6 years under Marcos Jr will be crucial

1 of 18

FRESH START: Over the last 3 decades, the country has had a relatively clean governance, though poverty, inequality and unemployment remain widespread. Based on the upper middle-income poverty rate of $5.5 (Php 286, Dh20) per day, poverty incidence in the Philippines would average 46 per cent in 2022; 43.4 per cent in 2023; and 40.9 per cent in 2024. That poses a huge challenge to new leaders under President Ferdinand Marcos Jr., whose six-year term starts on Friday (July 1, 2022). There’s some silver lining in the post-COVID scene. The country’s GDP posted 8.3 per cent spike in the first quarter of 2022, the highest in the Asean. President Bongbong Marcos Jr accompanied by his wife Louise (left) and son Congressman Sandro Marcos (2nd L) arrive at the presidential palace on Thursday, June 30, 2022. Image Credit: AFP

2 of 18

6-YEAR, SINGLE-TERM LIMIT: Under the 1987 Constitution, the single-term limit of six years for both president and vice president, as well as safeguards against the imposition of military rule are proving to be a big plus for the country’s long-term stability. Six years are short for a leader who delivers, and long for one who just muddles through somehow. Filipinos are passionate about good governance, impatient to reach their potential which they see now in their well-off neighbours. They richly reward perceived do-gooders with their votes. File photo shows the young Ferdinand Marcos Jr with his father, Marcos Sr., who stayed in power for 21 years, of which 14 years were under a military rule, or "Martial Law”. The latter was ousted by a civilian-backed military coup. Image Credit: Malacanang Museum and Library

3 of 18

ASPIRATIONAL: Marcos Jr.’s battlecry at campaign rallies is unity, which resonated with voters. If Filipinos wish their tomorrow to be where Singaporeans and South Koreans are today, a social pact is needed, where people and leaders commit to work together. The Philippines, with 110 million people, has the world’s 25th-largest economy, with a $373-billion GDP in 2021, while per capita GDP reached $3,160 in end-2021. It's projected to trend around $3,300 in 2022, according to Trading Economics. What would it take to get where its richer neighbours are? Efficiency, for one. For starters, it takes approximately 29 days to register a corporation in the Philippines vs one to two days in Singapore. Image Credit: Pexels | Elaine Bernadine Castro

4 of 18

SOCIAL MEASURES: Over the past 3 decades, a raft of social measures had been enacted. The expanded “Solo Parent Act” — known as Act 11861, which lapsed into law recently — provides for a Php1,000 monthly ($20) cash subsidy for solo parents earning minimum wage, and a 10% discount on certain medicines and food supplements purchased by low-income solo parents who have children six years and below. This, alongside free access to state colleges and universities, and a massive nationwide technical and vocational training scheme through TESDA are long-term investments to make the national workforce more competitive and confident. Image Credit: BSP | File

5 of 18

BREAKTHROUGH: Will the country’s economy hit a "breakthrough" status, post-Duterte? There are signs that two big challenges — a five-decade-old armed communist insurgency and the Moro separatism — are on the way towards potential lasting resolution, possibly leading to an accelerated investment and development, especially in the countrysides. Marcos Jr. also promised that his decisions, especially on the use of nuclear power to curb high electricity rates, will be based on science, not politics. Image Credit: World Bank

6 of 18

YOUNG PEOPLE: There are 30 million young people between the ages of 10-24, accounting for 28 percent of the Philippine population. The Philippines has an active campaign to welcome retirees from other countries more than young people that would help build its economy. Remittances from Filipino overseas workers is a big part of the economy. There’s a massive infrastructure buildup — scaled up under former President Rodrigo Duterte — while household debt that is among the lowest in Asia. Image Credit: Furdi De Rivera

7 of 18

CHALLENGES: According to the Social Weather Stations, a respected polling agency, there were 10.9 million “self-rated” poor families in April 2022 and 10.7 million in December 2021. Policy tweaks are being done to address these. For example, financial support and conditional cash transfer (also known as 4Ps) to keep children from the poor households in school are uplifting the lives of millions — and proving to be key economic enablers long term. Image Credit: Pexels | Rica

8 of 18

REMITTANCES | OUTSOURCING: The Philippines earns more than $60 billion from services — about $30 billion from the business-process outsourcing (BPO) industry, and another $32 billion from overseas workers. This is primarily owing to its young, English-speaking workforce. Image Credit: Gulf News

9 of 18

DOLLAR EARNERS: The Philippines is a country of professional care-givers, too, and is one of the world’s biggest suppliers of nurses to richer countries. Post-pandemic, the country’s rich natural wonders offer unmatched potential for earning tourism dollars. Image Credit: Pexels | Ferdie Drone

10 of 18

INNOVATION: For the Philippine to reach the status of its richer neighbours, both citizens and leaders must buy into a national innovation strategy — a document that will be followed down the line with unbroken commitment, no matter who is in charge at the top. Inventing and innovating are two keys to development. The Philippines is no exception. It’s only through improvements in processes that society develops as a whole. Image Credit: Reuters

11 of 18

INTELLECTUAL PROPERTY: It’s not enough to have laws to protect and encourage innovators. The Philippines passed the Intellectual Property Code in 1998 — 24 yeas ago. It has improved its patents and copyrights regime. To usher in the next revolution, a critical mass of innovators and capital markets working together is needed so researchers and industries can bring new products/services to market quicker. The Philippines needs an ecosystem and worldview where industry, capital and continuous research and development upbuild and reinforce each other. A Filipino inventor demonstrates his "flying car" in Batangas. Image Credit: Reuters

12 of 18

YOUNG INNOVATOR: In 2018, the “Air Disc” air-conditioner without refrigerant that uses 90% less power was invented by a young Filipina Angel Palma. She racked up international innovation awards. AirDisc’s heart is a centrifugal compressor that uses rotating concentric air tanks with air inlets that continuously take in enough air molecules from a room for compression, which then causes the air to cool. In 2016, about 100 million units of air conditioners were produced globally. Will the Air Disc help curb global electricity consumption and help alleviate global warming? Image Credit: Screengrab

13 of 18

AC WITHOUT REFRIGERANT: The young Filipina inventor's AirDisc hasn’t come to market yet until today. https://gulfnews.com/1.2263116) Image Credit: DOST

14 of 18

TARGET SETTING: South Koreans had been using nuclear power for more than 40 years and are today building nuclear power plants for other countries. Safety record is unmatched in the region. As a result, the cost of electricity is less than $0.50 in South Korea for every $1 that Filipinos currently pay for power. Singaporeans are the richest in Asean, with the highest saving rates. This is thanks to long periods of peace and a national savings consciousness to which everyone contributes, and benefits from — with safeguards so that no one can steal. Image Credit: PNRI | DOST

15 of 18

HARNESSING YOUNG TALENT: When a country harnesses the energy and talents of its young people, a virtuous cycle of development is created, thereby uplifting society as a whole. When talent is encouraged, innovation is rewarded and enterprise is protected, the relatively young population becomes a catalyst for progress. Individuals and teams are incentivised to push boundaries, experiment with novel approaches, and develop groundbreaking technologies. This culture of innovation becomes a driving force for economic and social advancement. Image Credit: Gulf News

16 of 18

UPPER-MIDDLE INCOME INCOME COUNTRY BY 2023? The last two decades were big drivers in achieving a high middle-income status. Up until the year 2000, the economy has grown at a modest clip. In the last two decades, the economy has seen significant growth, from an average of 4.6% between 2000 and 2009, it soared to 6.4% between 2010 and 2019. This has moved the country from a lower middle-income nation with a gross national income per capita of under $1,000 prior to the year 2000 to $3,160 in 2021. A boost in electronics manufacturing and service export revenue could keep the country approach. Economists expect further rises. Image Credit: Reuters

17 of 18

GETTING BACK ON TRACK: With post-COVID recovery and reform efforts, the Philippines is seen getting back on track on its way from a lower middle-income country (with a gross national income per capita of $3,430 in 2020) to an upper middle-income country (per capita income range of $4,096–$12,695) in the short term, according to the World Bank. Image Credit: World Bank

18 of 18

ALL THE PHILIPPINE PRESIDENTS: Under the (1987) Constitution, the president (Filipino: pangulo ng Pilipinas) is both the head of state and the head of government, and serves as the commander-in-chief of the country's armed forces. The president is directly elected by qualified voters to a six-year term and must be "a natural-born citizen of the Philippines, a registered voter, able to read and write, at least 40 years of age on the day of the election, and a resident of the Philippines for at least 10 years immediately preceding such election". Any person who has served as president for more than six years is barred from eligibility. Upon resignation, or removal from office, the vice president assumes the post. Image Credit: File

Asia Philippines

Philippines to hit upper middle-income nation status? Why the next 6 years under Marcos Jr will be crucial

More From Asia

Philippines: Typhoon Marce (Yinxing) threatens north with 150 km/h winds

Photos: Jubilant Trump, supporters on election victory

Look: US election rivals race to photo finish

Philippines: Supertyphoon destroys old church, houses, infrastructure

GULFNEWS SECTIONS

Trending

Philippines to hit upper middle-income nation status? Why the next 6 years under Marcos Jr will be crucial

More From Asia

Philippines: Typhoon Marce (Yinxing) threatens north with 150 km/h winds

Photos: Jubilant Trump, supporters on election victory

Look: US election rivals race to photo finish

Philippines: Supertyphoon destroys old church, houses, infrastructure

GULFNEWS SECTIONS