The truth will out. Belying the Imeldific maxim “perception is real, truth is not,” the last 100 days have revealed the truth of the new administration despite its constant efforts to bend people’s perceptions.

Pres. Ferdinand “Bongbong” Marcos Jr has been framed in many ways by his propagandists, allies and sycophants. He has the good qualities of his father and will bring back his “golden years”. Though a Duterte ally, he will bring back civility and dignity to the presidency lost under his predecessor. Though wildly controversial, he put together a government of the “best and the brightest” crossing political lines.

At his inaugural address, Marcos Jr himself postured as a radical reformer and promised a “comprehensive, all-inclusive plan for economic transformation”.

Yet public relations spin in press releases, social media posts, and statements by toadying supporters can only go so far. In the same way that the president’s orchestrated public appearances fray quickly when he has to think on his feet and respond to spontaneous questions, the last 100 days do not look good under scrutiny.

Marcos Jr starts his 101st day exposed as oblivious to the deep economic distress of people and offering nothing new.

Functioning government?

Cheap fabric quickly frays. The incompleteness of his administration with only officers-in-charge of the critical health and defense departments and premature turnovers in the offices of the executive secretary, press secretary and auditing agency are visible. Even his taking the agriculture portfolio is probably just an interim measure.

Yet there is reason to worry even about the quickly assembled and widely-hailed economic team. It is understandable why the president might personally be unaware of the serious economic difficulties of ordinary Filipinos – since at least the Marcos dictatorship, his family has not been known for sensitivity to their plight.

But if the president is so uninformed even about the real state of the economy according to cold statistics then this ignorance is on his economic team. Despite being hailed for their competence, the team’s persistent insistence that the economy is doing well and recovering is a fatal premise for economic management.

Taken together, the personal and statistical blind spots go far in explaining why the first 100 days did not see the administration charting bold new directions to fix the economy or relieve the suffering of tens of millions of Filipinos.

Amid deep and deepening economic crises, the most important sign of a functioning government is to have, using the president’s words, a “comprehensive, all-inclusive plan for economic transformation”. The first 100 days is more than enough time to articulate these bold new initiatives with the details spelled out later.

There was, however, none to be found and the only thing we heard on the economic front were the same tired shibboleths that literally every economic team of literally every administration of the last 50 years says – literally regardless of whatever economic conditions are prevailing. Attract foreign investment, celebrate foreign borrowing, improve infrastructure, and make doing business easier to increase corporate profits.

Yet conditions right now are so extreme and unusual that still insisting on these only highlights how the conventional economic wisdom is well and truly part of the problem.

Business as usual?

The economic truth is real, and the adopted perception of the administration is not. The pandemic is not the main problem.

The economy was slowing long before the pandemic hit – from 7.1% gross domestic product (GDP) growth in 2016 to 6.9% (2017), 6.3% (2018) and 6.1% (2019). Then the ill-conceived lockdowns in 2020 caused the worst economic collapse in the country’s history and virtually in all of Asia (and among the 30 worst in the world). Although the pandemic is often blamed it is really the lockdowns that are at fault because most other countries did much better despite being hit by the same pandemic.

Seemingly rapid growth in 2021 was from that low base and illusory; the rebound already started to fade by the eve of the new Marcos Jr administration. Growth will be even slower in the remainder of this year and next year – especially amid accelerating inflation, multiple global crises, and another looming world recession.

But slowing growth and even labor force statistics underestimate the seriousness of people’s conditions. The rebound in employment masks worsening joblessness. Compared to January 2020 before the over-harsh pandemic lockdowns, employment has increased – by 5.3 million to 47.9 million in 2022. However, so too has unemployment including in the most recent labor report for August 2022 – rising to 2.7 million (5.3%).

Officially reported employment masks huge joblessness and job scarcity though. Reported underemployment increased to over seven million (14.7%) but this only partly captures the problem.

By class of worker, some seven out of ten (70%) of the reported 5.3 million additional work is actually just in self-employment (growing to 13.1 million) or other informal family employment (rising to 5.6 million). The family employment includes a massive 4.4 million in merely “unpaid family work” which is even more than double the 2.1 million in April 2020 at the height of the lockdowns.

By hours worked, most additional work is actually just in part-time work (up to 15.9 million) or “with a job, not at work” (up to 602,000). A more discerning look at the labor force data does not show an economy recovering but rather millions of Filipino families just trying to scrape by in whatever way they can. Even the increase in the labor force participation rate, from 61.7% in January 2020 to 66.1% in August 2022, is not a sign of an improving labor market but likely reflects families desperate to increase their incomes.

They are not succeeding. The government already reported poverty increasing in 2021. Even according to the unrealistically low official poverty threshold (some Php79 per person on average nationwide), the number of poor families rose to 3.5 million (13.2% of families) and of poor Filipinos to 20 million (18.1% of population).

More recently and despite hype about the economy reopening, the Bangko Sentral ng Pilipinas (BSP) reported the share of households without savings increasing to nearly three out of four (72.5%) of all households in the third quarter of 2022. By IBON’s estimation, this is four (4) million more than before the lockdowns. There are now 19.4 million poor and vulnerable families without savings, living a hand-to-mouth existence, and in urgent need of emergency cash assistance.

They are the Filipinos who are worst hit by accelerating inflation in not having any savings to fall back on to maintain their consumption. The latest reported 6.9% inflation rate is as high as in September/October 2018 and the highest in nearly fourteen years (or since 7.2% in February 2009).

Government helpless?

The bottom line – the overwhelming majority of Filipinos are distressed. Yet they are apparently invisible to the president’s elite eyes and to the economic manager’s neoliberal economic dogma.

The situation clearly demands extraordinary policy responses to deal with the erosion of the economy – the share of agriculture and manufacturing in GDP are at their lowest in at least 70 years – and with immediate threats to the livelihoods and welfare of millions.

For the administration, beyond shallow acknowledgment of some economic troubles, it has been business-as-usual. Its biggest justification for passivity and inaction is not having resources to do anything more. To support this argument, it harps on about “fiscal consolidation” and “fiscal sustainability” as if these were ends in themselves. This is economic policy-making defined by the obsession with credit ratings and creditworthiness.

Which explains why the proposed 2023 budget is an austerity budget that will not even keep up with 2022 inflation that will likely be at 5.4% or more. It is only a 4.9% increase overall and, less interest payments on debt, just a 3.9% increase in spending on social, economic and public services. The budgets for ayuda, public hospitals, tertiary education and MSMEs are cut — while there are unwarranted increases in the budgets for infrastructure, the president and vice-president (including confidential and intelligence funds), military and debt service.

More rational development policymaking would be more concerned with the immediate plight of Filipinos and with long-term growth and development than short-term fiscal indicators. The government is neither a household nor a firm and using financial metrics more applicable for them is erroneous.

It is this erroneous thinking that straitjackets the administration from the bold and unconventional initiatives that are needed. Households and firms are not stimulated and get multiplier effects from spending – but an economy is.

The collapse in household incomes is a binding constraint on the over 70% consumption-driven economy. Pro-active and countercyclical fiscal policy is needed. On the demand-side, this means meaningful ayuda, expanded nutrition, health and education programs, and even increased pensions for neglected elderly. Every Filipino has a right to social protection.

To ensure multiplier effects but also to mitigate inflationary pressures, there should also be supply-side interventions and support for farmers, fisherfolk and small businesses. There can also be expanded public employment programs to provide social and economic services. All these can be with a long view of structural transformation – a solid agriculture base and national industrialization.

These interventions will require magnitudes of Php500-750 billion or more just in the first year. Creative financial and monetary measures are needed to fight the economic downturn and transform the economy. As it already did on a limited scale, the BSP can keep buying treasury bonds from the national government or even from the private sector – or, colloquially, “print money”.

The most reliable and sustainable source of revenue is still a progressive tax system though. A billionaire wealth tax is long overdue, as well as reforms raising taxes on wealthy families and large corporations. With a genuinely comprehensive and all-inclusive plan in place, the economy will grow rapidly and increase government revenues which will actually make deficit and debt-financed spending viable.

Never too late?

The first 100 days are important as the moment of change from one administration to another. It is the singular moment of change when a new government defines its trajectory over the next six years. In the specific context that so many of the country’s troubles are chronic, the first 100 days are arguably the most crucial moment to make a break from the past – not just from the past administration but from poverty, inequality and underdevelopment.

The Marcos Jr administration failed to do anything with this moment and, if anything, confirmed that it is unable to even imagine any real fundamental change. It is extremely unlikely to chart any new directions in its remaining six years. For that to happen, the impetus from change will come from those with the biggest stake in overturning the oppressive status quo. ###