THE Marcos administration is revisiting the country’s AmBisyon Natin 2040 roadmap as the long-term scars of the pandemic continue to weigh on the economy, while fresh global shocks threaten to further derail the country’s development trajectory, according to Socioeconomic Planning Secretary Arsenio M. Balisacan.
‘We are now revisiting the AmBisyon Natin 2040 to examine what we have done best, what we could have done better, and what needs to be fixed. Obviously, there were many developments that were not anticipated and that would need to be corrected,’ said Balisacan, who led the crafting of AmBisyon 2040 during his stint as chief economist under the Aquino III administration.
Meanwhile, President Ferdinand Marcos Jr. on Tuesday expressed confidence the economic growth will rebound as early as the second quarter of year, as the government ramps up spending on public services, which includes cushioning the socioeconomic impact of the Middle East crisis and controlling inflation.
The chief executive attributed the ‘lackluster’ 2.8-percent gross domestic product (GDP) from January to March to delays in public spending in that period.
The Department of Budget and Management (DBM) reported that infrastructure spending dropped by 43.5 percent to P147.8 billion in the first quarter of the year from P261.8 billion year-on-year due to the stringent verification process conducted by the Department of Public Works and Highways (DPWH) amid the government crackdown on anomalous flood control projects, which started last year.
Marcos said they were able to remedy this when they started implementing the Middle East response, which includes repatriation of Filipinos from the Middle East, as well as providing fuel subsidies, contract servicing, and cash aid to public utility vehicle drivers and operators.
The government reported it spent at least P4 billion for its Middle East responses.
The President also led the nationwide distribution of Local Government Support Fund (LGSF) to local government units for their procurement and rice subsidy programs. The government also started tapping its Socio-Civic Projects Fund (SCPF) to provide scholarships to qualified students.
He noted the initiatives, particularly on rice and fuel subsidies, are expected to help keep inflation in check, which accelerated to 7.2 percent last April, as the Middle East conflict disrupted global supply chains leading to higher fuel prices. ‘We cannot allow people to go hungry because they are waiting for the new policies of the government to come down and be felt. So that is the nature of the public spending that we are increasing,’ Marcos said in a press briefing with the Japanese press in Malacañang on Monday.
‘With all the spending that we are doing for providing benefits for people who need assistance, for providing subsidies, for providing discounts, the fuel discounts, we have tried very, very hard,’ he added.
The measures, he said, is expected to help prevent the ‘stagflation’ or the simultaneous slowdown in economic growth, high inflation, and high unemployment. ‘It’s [stagflation] a deep hole if you fall into it. It’s very, very hard to come back out. So we said let’s just keep the machine, the economic machine running,’ Marcos said.
The President said the government will also provide support to micro, small, and medium enterprises (MSME) since they generate much of the country’s economic activity.
‘Because MSMEs comprise 95 percent of our businesses in the Philippines and about 63 percent of our employment. So if we keep those sectors strong, I’m confident that although we will feel the effects of the oil crisis, I think that we will be able to mitigate many of the effects,’ Marcos said. The Marcos administration is currently financing its ‘accelerated spending’ by cutting the Maintenance and Other Operating Expenses (MOOE) of its offices by 10 percent.
It is also pushing for the passage of the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) Bill, which will give it greater flexibility in using savings as well as unreleased and unobligated appropriations amid its growing funding needs.
AmBisyon’s origins
Adopted in 2016, AmBisyon Natin 2040 serves as the country’s long-term development blueprint aimed at approximately tripling per capita income and transforming the Philippines into a predominantly middle-class society where poverty is eradicated and economic growth translates into a better quality of life for ordinary Filipinos.
Balisacan said the development vision was crafted during a period of strong economic performance under the Aquino administration, when the economy expanded by an average of 6.3 percent annually while inflation and the fiscal deficit remained manageable.
At the time, economic managers believed the country could sustain growth of 6 percent to 7 percent-or even as high as 8 percent-over the long term.
However, Balisacan said the Covid-19 pandemic significantly disrupted the country’s development path after the economy contracted by 9.5 percent in 2020, the worst postwar downturn on record.
‘It took us another two years just to recover the GDP per capita. So we practically lost three years,’ he said.
He added that the pandemic left scars across both the economy and human capital, with thousands of micro, small and medium enterprises (MSMEs) either shutting down or falling heavily into debt after prolonged lockdowns.
Balisacan also pointed to the long-term impact of school closures, warning that learning losses suffered during the pandemic could translate into weaker productivity and lower incomes over the coming years.
The chief economist acknowledged that the Philippines once had strong potential to catch up with its regional peers, recalling a period when ‘people with competence [were] joining the government.’
However, Balisacan said ‘so many combinations of things happened’ that caused the country to ‘miss the boats’ on key growth opportunities.
He warned that fresh external shocks, including the ongoing Middle East crisis, are now creating new risks for the domestic economy through elevated oil prices, inflationary pressures, and slower growth.
‘Now, again, we have another problem…all these shocks. So we would need to recalibrate the AmBisyon Natin in 2040,’ he added.
Despite the need for recalibration, Balisacan stressed that the long-term vision itself should remain intact because it reflects the aspirations of Filipinos.