Extraordinary crisis requires the highest brand of leadership. Our country is confronted with several serious challenges, any of which is enough to stir grave trouble. All of them combined, will inevitably pose a national crisis.
Top of the list is the looming fiscal quicksand. Our current national debt is P12.68 trillion. To serve this without default, more than 58 percent of our annual GDP is committed to be paid to our multi-creditors. Furthermore, this will force us to be in the red. We will be in a deficit-spending regime for the next decades. Meaning, we are confronted with the twin trouble of spending beyond our financial capacity and borrowing more. The gap between what we earn and what we need to support government operations must be shouldered by additional debts that will more deeply bury us in the debt trap.
As it is, such fiscal scenario would endanger our international credit standing. We are walking on an extreme tightrope. We must not be at default for fear of being downgraded by rating agencies such as Moody’s, Standard and Poor’s and Fitch. Being downgraded would mean higher borrowing rates from our creditors, and lesser foreign investments which we direly need.
The economic team of president-elect Bongbong Marcos headed by secretary Ben Diokno must come up with the panacea that would address the short-term pressure of providing the country the needed funds while at the same time stimulating the economy by supporting businesses with friendlier tax rates and incentives. But the irony is, we need more taxes hence, tax cuts are not an easy option. Perhaps, the more prudent option is to end or minimize the tax leakages in the BIR and Customs. Time, as the cliché goes, is of the essence. So much hope is expected from his team.
External geo-political reality has a strong negative impact on our economy. We are simply among the victims of the ongoing Ukraine war that was launched by Russia. The world is now facing energy and food crises. Prices have risen to unprecedented levels that spiraled inflation in all countries. It’s 2-4 percent in the Philippines. Gas prices have almost doubled already. The higher operating and material costs are now reflected in almost all food items particularly flour, sugar and other agricultural products. This can be a protracted war unless Vladimir Putin will do the unthinkable, withdraw. Otherwise, the domino effect of this territorial dispute would worsen before it gets better.
Meanwhile, we are directly entangled with the West Philippine Sea row against our giant neighbor China. Hopefully, the political stock of the Marcoses, who are known to be a good friend of Beijing, can arrive at a win-win relationship. It’s almost expected that the bilateral ties between our two countries will improve strategically and immediately, notwithstanding the statement of BBM that we will pursue an independent foreign policy.
Ultra-high expectations of the people are a powder keg. Indeed, the BBM-Sara tandem garnered the historic majority mandate from our electorate. This translates to the extremely high expectations from a beleaguered people who are saddled with economic hardships, collective insecurity about the future and widespread frustration on the lack of meaningful changes from the different administrations that controlled our government.
We all know that the 16 million poor Filipinos will not become rich or at least materially comfortable by the end of BBM’s term in six years. Chances are, more might even unfortunately join their ranks because most of our problems are structural.
Will the newly elected leaders be willing to undertake the real solutions which would be felt by our people only after they have long been out of service because the solutions are long-term? Examples of which are the constitutional amendments that would re-engineer our political system towards a more responsive and efficient governance such as federalism and parliamentary systems. Modernize the Bureau of Customs and digitally link all the important frontline government agencies. Fully develop our mass transportation infrastructure.
The correct decisions will not necessarily be popular. Instead, these are the most painful decisions that the visionary leader is willing to make so that our people could live better in the future.
P.S. (Public Service). It will be a great service to the country if BBM would again appoint Atty. George Garcia as a Commissioner of the Commission on Elections (Comelec). But this time, as Chairman. During the recent national elections, he was outstanding and was the well-respected voice of this constitutional agency.
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Email: arielnepo.philstar@gmail.com