Asia St: How the New Philippine President’s Big Plans Could Impact Business

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How the New Philippine President’s Big Plans Could Impact Business

July 26, 2022

(Photo Credit: Twitter @bongbongmarcos)

The BGA Philippines Team led by Managing Director Victor Andres Manhit, wrote an update to clients on the President Ferdinand Marcos Jr.’s first national address which outlined the administration’s policy agenda and economic objectives for the year ahead.

Context

  • Economic recovery and development were central themes and part of the government’s longer-term ambition to achieve upper middle-income status by 2028. Some elements of Marcos’ plans drew heavily from previous administrations and were lacking specifics.
  • Marcos highlighted 19 legislative measures for Congress to pass, covering some key sectoral areas. which he hopes will lay the groundwork for an economic revamp.

Significance

  • Productivity-enhancing investments will be promoted. The administration will look to make the Philippines an attractive investment destination, capitalizing on the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and economic liberalization laws such as the Public Service Act and the Foreign Investments Act. Ecozones will be fully supported to bring in strategic industries such as those engaged in high-tech manufacturing, health and medical care and emerging technologies.
  • Notably absent from the speech was any mention of anticorruption measures, electoral reform, human rights or press freedom. This could mean such issues would be of lower priority, or that Marcos is seeking to revive his family’s legacy by a more pragmatic focus on economic issues.

Implications

  • Companies can expect some policy continuity on the economic front. Marcos will resume many of the legislative items and economic programs related to economic liberalization, infrastructure and taxes that are left over from his predecessor Rodrigo Duterte.
  • The Philippines may try to balance good relations with major powers including the United States and China while improving its military capabilities to pursue its independent foreign policy interests. It will be important to monitor the specifics in how Marcos will manage individual issues such as the South China Sea, Philippine military modernization or U.S.-China competition.

BGA will continue to keep you updated on developments in the Philippines as they occur. If you have any comments or questions, please contact BGA Philippines Managing Director Victor Andres Manhit at vmanhit@bowergroupasia.com.