Populism is expensive. Economics is painful. Only one works.

In a country like ours, we love reforms that feel good today and forgive us tomorrow. That is the core tension between populist reforms and economic reforms.  And until we settle it, we will never catch up with ASEAN.

Juxtaposed, the difference is brutal and simple. Populist reforms are designed to be felt. They distribute, subsidize, condone, and forgive. Economic reforms are designed to be built. They compete, produce, formalize, and discipline. Honestly, populism buys votes. Economics builds value. The first gives fish today and call it compassion. The second teaches fishing, builds the cold chain, and ensures the fish can be sold at a price that keeps the fisherman in business. One is immediate and visible. The other is slow, technical, and often unpopular.

What do we have in our books? For populist reforms, the list is long and familiar. The 4Ps conditional cash transfer, AKAP, AICS, TUPAD, free tertiary education under RA 10931, free irrigation, universal health care without universal funding, rice price ceilings, fuel subsidies, and the perennial proposal for a P1,200 national minimum wage. All well-intentioned. All politically irresistible.

For economic reforms, the list is shorter and quieter. The Rice Tariffication Law, the TRAIN Law, CREATE and now CREATE MORE, the amendments to the Retail Trade Liberalization Act, Foreign Investments Act, Public Service Act, the Ease of Doing Business Law, and special economic zone rationalization. These do not win fiestas. They fix systems.

Which ones really worked and which did not? Actually, the answer is uncomfortable.

As policy audits consistently show, the 4Ps succeeded at keeping children in school and easing extreme hunger, but it failed to graduate families out of poverty because we did not link it to jobs. Free tertiary education worked at increasing enrollment, but it did not work at improving quality or employability because we funded access without fixing the learning crisis. Rice price caps and fuel subsidies never worked. They distorted markets, created smuggling, and taught us that when you control the price without controlling the cost, you bankrupt the small man first.

On the economic side, Rice Tariffication worked at lowering rice prices for consumers, but it failed our farmers because we did not deliver the promised mechanization and credit extension on time. TRAIN worked at raising revenues and widening the base, but it hurt because inflation ate the gains. CREATE and its liberalization cousins are working slowly at bringing in semiconductors, renewables, and logistics investors, but they under-deliver because we pass the law and then make power so expensive and permit processing so long, as local industry studies continually point out.

More importantly though, we must read the country we are trying to reform. Our political atmosphere rewards personality over platform, and patronage over performance. Our functional literacy remains low, so slogans beat spreadsheets.

Therefore, which type of reforms should a country like ours pursue? The tempting answer is more populism. The correct answer, however, is market-driven economic reform built around social protection.

Henceforth, we must pursue economic reforms if we want to be at par with ASEAN and the world.  Remember, populism treats the symptom; economics targets the cause. Vietnam did not overtake us in manufacturing by giving more ‘ayuda.’ It did it by fixing power, ports, and predictability. Malaysia is not winning data centers because of subsidies. It is winning because contracts are enforced and power is cheap.  Singapore is winning the FDI race in the ASEAN not because it is generous, but because it is certain.

Frankly, we cannot subsidize our way to competitiveness. We cannot keep producing graduates for jobs that do not exist here because we made it expensive to create them.  We have to be pragmatic and must understand that help must lead to work. Give the cash, yes, but tie it to skills. Give free tuition, yes, but tie it to industry boards that hire. Fix power through real competition, fix ports with one timeline and one accountable office, and make MSME formalization easier than staying informal. That is not anti-poor. That is pro-poor because it builds sustainable paychecks rather than perpetual relief.

The choice is clear. Populism makes us feel better for one election cycle. Economic reforms make us better for one generation. Therefore, if we want to stop exporting our best people and start exporting our best products, we must stop choosing the reform that wins applause and start choosing the reform that builds a country. We do not need more “ayuda” to survive. We need systems worthy of our people to thrive.