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Hurdles ahead as Philippines' Marcos Jr begins six-year presidency

Hurdles ahead as Philippines' Marcos Jr begins six-year presidency

Philippine President-elect Ferdinand "Bongbong" Marcos Jr, son of late dictator Ferdinand Marcos, speaks during a news conference at his headquarters in Mandaluyong City, Metro Manila, on May 23, 2022. (File photo: Reuters/Lisa Marie David)

MANILA: Ferdinand Marcos Jr starts his six-year term as Philippines president on Thursday (Jun 30) facing a host of challenges, from rising inflation and COVID-19 pandemic recovery to balancing relations between competing superpowers the United States and China.

The 64-year-old, who is allowed only one term in the top job, has yet to fill all Cabinet posts, but he has so far nominated experienced technocrats to handle the economy, helping to ease some market fears about his presidency and policy inexperience.

WHAT ARE THE IMMEDIATE PRIORITIES?

Marcos Jr is inheriting an economy that is on a solid footing after bouncing back from the worst of the pandemic, but he will be under pressure to sustain that recovery while battling soaring inflation. Taming it will be his top priority.

Having promised during the campaign to halve the cost of rice, the national staple, Marcos Jr has appointed himself agriculture minister, citing the urgent need to boost farm production to strengthen food security and also keep food prices under control.

Rising inflation driven by higher food and fuel costs has prompted the Philippines to join global peers in starting to dial back policy stimulus. The new central bank governor Felipe Medalla has signalled the prospect of a series of gradual interest rate hikes to combat runaway inflation.

WHAT ABOUT LONGER-TERM PROJECTS?

Weak infrastructure has long been an impediment to attracting foreign investment in the Philippines, and upgrades to ports, roads, rail, air terminals, power transmission and utilities are long overdue.

The Marcos Jr team has said that it was open to tapping private funds for infrastructure and would continue his predecessor Rodrigo Duterte's pandemic-delayed "Build, Build, Build" programme.

Advancing this would help Marcos Jr show tangible results, while creating jobs and foreign investor interest.

However, to avoid constraints on funding, Marcos Jr and his economic team will also need to control government debt that had ballooned to 60.5 per cent of gross domestic product at the end of 2021, the highest ratio in 16 years, from 39.6 per cent before the pandemic.

His finance minister, Benjamin Diokno, said that he prefers to focus on improving tax administration and collection, including reducing corruption, than raising taxes, to boost revenues.

WHAT APPROACH WILL MARCOS JR TAKE ON MINING?

Marcos Jr faces a difficult task of balancing the economic benefits of exploiting the Philippines' vast untapped mineral resources with the protection of its stunning but fragile natural environment.

Mining accounts for just 1 per cent of the economic output of the Philippines and only an estimated 5 per cent of its minerals have been extracted so far. A third of its land mass is deemed by experts to have high mineral potential.

Marcos Jr has said that he would push for "clean mining" and wants to see some value added to mineral exports by selling processed materials instead of just ores. The Philippines is China's biggest supplier of mostly low-grade nickel ore.

WHICH DIRECTION WILL HIS FOREIGN POLICY GO?

While Marcos Jr is widely perceived to be friendly to China, political observers believe his approach will differ from that of predecessor Duterte, who enthusiastically courted Beijing - with little in return - while threatening to downgrade ties with former colonial ruler, the United States.

Marcos Jr said during the campaign that he would have to "walk a very, very fine line" between Beijing and defence treaty ally Washington.

While he has expressed intent to elevate ties with China, he has also vowed to stand firm against any threat it poses to Philippine sovereign interests.

"Marcos realised there's a lot of public scepticism after years of Duterte's fruitless flirtations with China," said Richard Heydarian, an author and academic who specialises in politics and foreign relations.

Maintaining the country's alliance with the United States, Heydarian said, will be essential in keeping the military and the public onside in a country with historically strong links to the United States.

Source: Reuters/kg

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