My students found it very difficult to identify two of the current administration’s notable accomplishments in public finance. I can appreciate their difficulties.
The budgetary deficit in 2022 was a staggering P1.61 trillion, or 7.33% of GDP. Government spent P5.16 trillion last year but raised only P3.54 trillion in revenues. I cannot help but wonder why the finance secretary was all praise for the Duterte administration’s revenue reforms when even the Bureau of Internal Revenue failed to reach its revenue target, falling short of its collection by P56.9 billion. To its credit, the current administration was able to reduce the budgetary deficit from 8.6% of GDP in 2021.
To be able to pursue its operations, government continues to borrow. The total debt stock of government was at P13.82 trillion in 2022. Our debt stock is nearly 70% of the value of our total incomes or production. Fortunately, 75% of our debt is not payable in the near future. It is painful but true: We will be passing on the burden of paying our debt to our children and grandchildren.
The burden of governance falls heavily on the leader of the land. Does President Ferdinand Marcos Jr. realize the challenges that the country is facing?
The Philippines ranked 97th out of 140 countries in the Rule of Law Index. We were 13th out of 15 countries in East Asia and the Pacific. At the very least, we are not at the bottom of the list, with the last two places occupied by Myanmar and Cambodia. But this is nothing to crow about. There is weak certainty and stability in the implementation of our laws. In many cases, implementation remains discretionary depending on who you are and who you know. The fate of former senator Leila de Lima is a perfect example of how unfair our justice system has become.
Corruption remains a serious problem. The Philippines ranks 116th out of 180 countries and has been described as among the significant decliners in fighting corruption in the region. There was no improvement in 2021. The promises of our leaders that they will stamp out corruption remain unfulfilled. The “marites” is that without anyone in charge, corruption flourishes everywhere.
There is nothing to crow about with our cohorts—i.e., countries with similar low scores—Algeria, Angola, Mongolia and Zambia. Seriously, do we want to be compared with them? Once upon a time, we were in good company, even besting all the other countries in Southeast Asia.
We seem to be pulled down by gravity. The Philippines dropped in the competitiveness index from being 48th to being 52nd in 2022. Our bureaucratic ways have grown, resulting in more controls, more processes, more documents, and more dealings with government officials to obtain permits and licenses. Somebody said government’s propensity to create more difficulties for its citizens seems to be endless.
All these difficulties add up to our failure to attract foreign direct investments (FDI). The President glows with happy news about promised investments every time he returns from his many foreign trips abroad. But the proof of the pudding is in the eating. The total amount of FDI in 2022 was US$9.19 billion, compared to $15.66 billion in Vietnam, $15.11 in Malaysia, and $21.6 billion in Indonesia. Even if we create several CREATE laws, investments will not come with uncertainties in our justice system and inefficiencies in government.
The numbers do not look good and neither does the quality of our life. Education is in a crisis. The World Bank estimates that only 1 out of 10 fourth-grade students can read well. Our officials say this is due to the pandemic. But our high school students were performing at the bottom even before the pandemic. They were at the bottom in the 2018 PISA (Program for International Student Assessment) in reading.
Nearly 20 million of our fellow Filipinos live in poverty. The poor have barely enough—P80 a day—to get a decent meal. No wonder 1 in 3 Filipino children under the age of 5 is stunted. Wala silang kalaban-laban. Their chance to improve their lives is almost nil.
The good news is that we have been near the bottom for years and there should be no other way to go but up.
Nation-building is not solely the task of the President but ours as well. We are called upon to not only be vigilant and guard against abuses, inefficiencies, and misinformation. We also need to pull up the others, especially those who have less. Only then can we claim the right to complain.
Milwida Guevara, a former undersecretary of the Department of Finance, is a faculty member of the Asian Institute of Management and the Ateneo Graduate School of Good Government. She is the president-CEO of Synergeia Foundation, Inc. —Ed.