Marcos Enters Final Stretch; SONA to Highlight Economic Gains Amidst Public's Living Standard Concerns

By Erika Mae P. Sinaking, Reporter Pexcel John Bacon and Kaela Patricia B. Gabriel PRESIDENT Ferdinand R. Marcos, Jr. will deliver his fifth State of the Nation Address (SONA) on Monday, entering the final two years of his six-year term under growing pressure to show that his administration can convert economic gains into tangible improvements in living standards while strengthening governance, restoring public trust and addressing security challenges. The annual address before a joint session of Congress is expected to lay out the administration’s legislative agenda through 2028 and signal how Mr. Marcos intends to secure his policy legacy as political attention gradually shifts toward the next presidential election. “Two years is a long time,” Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr. told BusinessWorld by phone. “The priorities should be lowering the prices of goods, controlling inflation, improving our geopolitical relationships and restoring the confidence of local and foreign investors.” The speech comes after a year marked by slowing but resilient economic growth, renewed volatility in global oil markets following the Middle East war, continued maritime tensions with China and heightened scrutiny over public spending after investigations into anomalous flood control projects. Mr. Marcos is expected to outline priorities on food security, infrastructure, energy, digitalization, defense modernization and investment promotion while reassuring the public that his administration remains focused on delivering results despite political distractions. Business groups will be watching for policy signals on taxation, energy, infrastructure and regulatory reforms, while labor organizations are expected to push for stronger measures to cushion households from higher living costs following the implementation of Metro Manila’s latest minimum wage increase. ECONOMY IN FOCUS Economists said the President should use his address to explain how the government intends to strengthen the economy against external shocks while ensuring growth becomes more inclusive. “The President must acknowledge the need for the economy to be resilient to looming crises both internal and external,” Christopher James R. Cabuay, a De La Salle University economics associate professor, told BusinessWorld in an e-mailed reply to questions. Former Finance Undersecretary Cielo D. Magno said Mr. Marcos should explain how the government plans to shield households from economic uncertainty while keeping public finances sustainable. “We have to make sure that government spending is really strategic and beneficial to the economy and the people,” she said via Viber, adding that debt management, human capital development, industrial policy and spending discipline should remain priorities. The National Government’s outstanding debt stood at P18.55 trillion as of May, according to the Bureau of the Treasury. Ms. Magno said Filipinos need assurance that public funds are being spent efficiently and that government programs could reduce households’ vulnerability to rising prices. She added that this year’s SONA should answer not only what the administration has accomplished but also how it intends to prepare the country for future economic shocks. The broader economic picture offers both opportunities and challenges. The World Bank earlier this month classified the Philippines as an upper-middle income economy after gross national income per capita reached a record $4,850, exceeding the threshold for the income category. The administration has also cited average annual gross domestic product growth of 5.8% over the past five years, reflecting the economy’s recovery from the pandemic. Inflation eased to 6.4% in June from 6.8% in May, according to the Philippine Statistics Authority, although the January-to-June average of 4.8% remained above the Bangko Sentral ng Pilipinas’ 2%-4% target. Lower transport and fuel prices helped slow inflation, but food prices continued to weigh on household budgets. For many Filipinos, however, macroeconomic gains have yet to translate into easier daily living. Mark Noel G. Nueva, a 27-year-old motorcycle delivery rider from Quezon City, said higher fuel prices have sharply reduced his earnings. “I switched jobs after the pandemic, only to face this issue of high fuel costs,” he said in Filipino. “Ever since the war in the Middle East started and drove up prices, it has been a massive problem for riders like me who just want to work.” He said filling up his motorcycle now costs nearly twice as much as before, reducing the income he brings home each day. Mr. Cabuay said the administration would likely highlight the country’s upper-middle income status, but warned that many Filipinos do not automatically associate the designation with better living conditions. “While this sounds great, I do not think that many of our citizens believe that this in fact means a better life for everyone,” he said. “Sure, it is good that there is growth, but I do not think it is enough to uplift the life of every person.” EXECUTION OVER PROMISES Business groups said the administration’s final two years should focus on implementing reforms rather than announcing additional programs. Management Association of the Philippines President Donald Patrick L. Lim said this year’s SONA should mark a decisive shift toward economic execution. “Filipinos are feeling the pressure of high living costs, businesses are facing uncertainty, and many MSMEs (micro, small and medium enterprises) continue to struggle,” he said in a statement. “We must fight corruption decisively, but we should not let the fight against corruption become a brake on economic growth.” The Makati Business Club likewise urged the administration to push governance reforms, including the Right to Information Act and an Anti-Political Dynasty law, while strengthening tax administration and supporting the digital and green economy. Mr. Cabuay said governance issues, including the impeachment trial of Vice-President Sara Duterte-Carpio, also have economic consequences. “Weaknesses in governance and legislation send a signal domestically and internationally of the inability of the state to provide basic public services,” he said. Political Economic Elemental Researchers and Strategists President Edmund S. Tayao said Mr. Marcos is likely to emphasize agriculture and national security during the remainder of his term. He said agriculture remains closely linked to trade diversification as the Philippines seeks to reduce vulnerabilities created by geopolitical tensions. The administration has also expanded defense cooperation with countries including Britain, France, Germany and Japan while maintaining its alliance with the US. Mr. Tayao described Mr. Marcos as a “policy wonk” who focuses on formulating programs but might struggle with the “wheeling and dealing” required to move legislation t