State of our nation State of our nation

BBM’s fifth State of the Nation Address (SONA) accurately recognized major economic anxieties like food inflation and job creation, allowing us to give him credit on problem recognition.

But Philippine Chamber of Commerce and Industry president Ferdinand Ferrer said the SONA should have presented more concrete plans on regulatory certainty and the ease of operating a business in the country.

Similarly, the European Chamber of Commerce of the Philippines (ECCP) welcomed BBM’s focus on accountability, energy security and infrastructure, but noted that the next two years would need steady implementation and predictable rules.

In other words, the business community is not going to be fooled. They have heard similar promises before and the test is, as ECCP puts it, steady implementation and predictable rules.

Whoever wrote BBM’s SONA last Monday employed a clever trick: flood them with itsy-bitsy details of itsy-bitsy projects that give the impression of an administration actively addressing the nation’s woes as if all those will make a difference.

There is a recognition of challenges ahead, the most pressing being high prices from food to electricity. BBM promised lower electricity costs and tax reliefs for low to middle income classes.

Nice to hear because that means  consumers will have more money to spend. But the lingering question is his ability to implement. I guess in Malacañang, they think that most people will forget the promises soon enough.

A few weeks ago, DEPDev Secretary Arsenio Balisacan explicitly admitted that the economy is growing too slowly, validating the widespread feeling of a disconnect between Malacañang’s optimistic SONA narrative and actual economic realities.

In fact, the Development Budget Coordination Committee drastically slashed the 2026 GDP growth target down to 3.5 to 4.5 percent (from the previous five to six percent range).

Balisacan noted that just to scrape by and hit the rock-bottom end of that new 3.5 percent target, the economy must average at least 3.7 percent growth across the remaining quarters of the year.

Hitting the government’s newly slashed 3.5 percent GDP growth target is very iffy. But it remains mathematically achievable if the administration executes a massive, flawless acceleration of domestic infrastructure spending in the second half of the year.

Philippine growth is driven by domestic consumer spending. With headline inflation projected by analysts to surge to six percent in 2026 due to the energy shock, consumers are only spending for essentials. If inflation stays elevated, household spending will continue to erode, heavily suffocating the economic growth target.

BBM threw some sweeteners to show he feels the economic hardship of the middle class, which has recently been quite vocal. He asked lawmakers to approve a bill removing system loss charges from consumers’ electricity bills, saying the measure would complement the administration’s planned tax relief package.

But former Napocor head Guido Delgado wrote in his InsiderPH article that system loss charges are a rounding error.

Delgado said “Congress should address the far larger anomaly in how the Energy Regulatory Commission prices the industry’s monopoly segments: a framework that guarantees utility returns while simultaneously pricing those returns as though they were at risk.”

Delgado wants the ERC to “restore rate-setting to actual, audited cost; anchor the allowed return for monopoly wires to sovereign yields plus a disciplined, evidence-based margin and end the double game in which the ERC removes the risk and then pays for it anyway.

“Electricity is a basic necessity, not an asset class. The system loss debate is a rounding error beside this. Congress should not settle for the rounding error.”

Teka muna… I am not sure BBM will go so far as to hurt the interests of his oligarch economic advisers. But I am willing to be surprised. After all, he threw his first cousin under the bus to show sincerity in dealing with the flood control corruption cases.

BBM was pragmatic enough to know he had to do it and probably told his cousin pasensya na lang muna. Maybe all the furor over the ghost flood control projects will die down. The judicial system can still absolve him, as what happened in the past when political big fish are brought to court.

BBM knows how important it is to pursue the corruption cases to improve his waning credibility, which was why he opened his SONA with a report on what he has done about it.

But BBM’s sincerity may be severely tested. After all, what the former Speaker was alleged to have done seems to be within the “kalakaran” at the House of Representatives. And BBM approved the budget that allowed the shenanigans to happen.

If the former speaker feels threatened enough by a potential life in prison, he may start talking too. The former speaker was reported to have remarked he will not go down alone.

In agriculture, the SONA was a disappointment. Instead of dealing with the systemic issues behind rising food inflation, BBM highlighted short-term relief, including distributing 26,000 metric tons of rice to over 2.5 million households and expanding the Kadiwa ng Pangulo program.

BBM is not ready to deal with the notorious food trading cartel. And neither is he ready to deal with the key problem posed by fragmented farms, a flaw in our agrarian reform program.

While he offered agricultural modernization from satellite-assisted monitoring, artificial intelligence and solar-powered irrigation systems, none of these would mean much unless we are able to farm at an economic scale which a hectare here and there does not allow.

BBM also failed to show how he will instill better food security rather than relying heavily on food imports.

The best thing about BBM’s SONA is the hint that he is now aware of our many problems. But the last two years will likely fritter away without much being achieved to change the trajectory of our country’s progress to a more hopeful one.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco