Thoughts on “The Last SONA”By Randell Tiongson on July 30th, 2015
A lot of controversy surrounds President Benigno Aquino III’s last SONA, but whatever you think of the man, the economic improvements under his tenure are undeniable. In the span of six years, we’ve gone from “Sick Man of Asia” to “Asia’s Rising Tiger,” “Asia’s Rising Star,” and “Asia’s Bright Spot.”
For the very first time, the Philippines has been rated as “investment grade” by the leading credit agencies in the world (S&P, Fitch, and Moody’s). This is no small feat, and the President deserves applause for his role in this achievement.
Domestic investments are also on the rise. In the President’s words, “ngayon, ang Pilipino, tumataya sa kapwa Pilipino.” From 2003 to 2007, only P1.24 trillion was invested domestically. From 3rd quarter 2010 to 2014, that number rocketed to P2.09 trillion, showing that Filipinos believe in the local economy and are staking their bets on it. I myself have seen this improvement in the increasing number of people asking me how they can invest.
The President touted the increase in net foreign direct investments (FDI), up to USD 6.04 billion in 2014, the highest ever. But I think this is an area that could still use some improvement. As recently as last year, reports showed that the Philippines has the lowest FDI to GDP ratio among Asean countries, as only 1.12% of our GDP came from FDI. Steps must be taken to increase FDI inflows and keep them; this involves loosening regulations that limit foreign investments.
After the President’s fourth SONA, I expressed that there needs to be more and better jobs for growth to be truly inclusive. In this year’s SONA, he pointed to the decreasing number of OFWs, a drop in the unemployment rate to 6.8% last year, and only 15 total workforce strikes in the last five years as a sign of an improving labor climate in the country. Programs like TESDA have helped more Filipinos find jobs, which can only be good for the economy.
Overall, to me, these numbers are good, but the most important achievement of President Aquino is there was a big improvement in the battle on corruption. The World Economic Forum has stated the anti-corruption drive propels the Philippines 33 places up its rankings. The stark improvement of international perception on diminishing corruption is one of the President’s biggest contribution. This not only makes foreigners more likely to invest, but locals as well. This foundation initiated by the President sets the stage for more economic improvements in the future.
Of course, there is still room for improvement, and I know that some of the reforms will take a long time before we can see any positive effects. But I believe that the fundamentals of our economy are good, no matter who takes over. And if we stay on the right track, we can prosper as a nation.
Let us continue to pray for our beloved nation. “Blessed is the nation whose God is the LORD, the people he chose for his inheritance.” – Psalm 33:12, NIV