MANILA – The American writer Mark Twain once reportedly claimed, “History never repeats itself but it does often rhyme.”
It remains to be seen whether President-elect Ferdinand “Bongbong” Marcos Jr will follow in the footsteps of his father by creating a new authoritarian order in the Southeast Asian country.
But if there is one area where he is clearly taking a page from his father’s playbook it is in his selection of A-List technocrats to manage his economic agenda. His team of economic managers is almost all exclusively from the University of the Philippines’ prestigious School of Economics (UPSE).
Veteran professor and current central bank chief Benjamin Diokno will take over the Department of Finance (DOF), while his UPSE colleague Felipe Medalla will replace him at the Bangko Sentral ng Pilipinas (BSP).
Another UPSE professor, Arsenio Balisacan, will reassume his previous stint as the economy minister at the National Economic Development Authority (NEDA).
In another nod to UPSE, Marcos Jr appointed the former president of the premier university, Alfredo Pascual, to oversee the country’s Department of Trade and Industry (DTI).
Pascual was previously the president of the influential Management Association of the Philippines and worked at Asian Development Bank for 19 years in various positions, including director of private sector operations, director of infrastructure Finance, and advisor for public-private partnerships.
As an investment banker, he served in executive positions at Philippine Pacific Capital (now RCBC Capital), First Metro Investment Corporation, and Bancom Development Corporation.
Earlier, the incoming president also appointed a number of progressive figures, including Susan Ople, to oversee the affairs of overseas Filipino workers (OFWs) under a newly-created department.
For the Marcoses, assembling “the best and brightest” to Bongbong’s cabinet is more than a matter of technocratic prestige and competency. Rather, it’s fundamentally about vindicating their legacy and building what they believe claim will be a “unifying” administration.
Indeed, in many ways the incoming president is assembling a “team of rivals” to head his administration following a landslide victory in this year’s elections. His sister and current Senator Maria “Imee” Imelda Marcos has made it clear that the family wouldn’t want to waste a “second chance” to vindicate their legacy, underscoring their commitment to get it right this time.
While the Marcoses have adamantly insisted that the days of dictatorship brought about order and prosperity, the presidential sibling had publicly apologized to “those who were inadvertently pained” during her father’s brutal regime.
Earlier this month, Marcos Jr became the first majority-based president in contemporary Philippine history, garnering close to 60% of the vote in the country’s first-past-the-post electoral system. The last time a Filipino president enjoyed such a level of support was for his father, who won more than 60% of votes in the controversial 1969 elections.
A few years later, the former Filipino president imposed martial law and, over the next decade-and-half, established a brutal and decadent dictatorship, which eventually fell to a “People Power” revolt in 1986.
Throughout his presidential campaign, Marcos Jr repeatedly invoked “unity” as his main rallying cry, vowing to end dysfunction and polarization after decades of unfulfilled democratic promise, including six years of disruptive populism under outgoing president Rodrigo Duterte.
Eschewing presidential debates and media interviews, Marcos Jr largely leveraged disinformation networks and forwarded vague policy platforms to exploit nostalgic yearning for the supposedly good old days among a growing number of Filipinos.
Now that the Marcoses are back in the Malacañang Palace, they have to shoulder the tough job of actual governance. Atop his policy priorities will be the economy, which has been in dire straits in recent years.
The Covid-19 pandemic triggered a five-quarter economic contraction, which has also suffered one of the highest infection rates in the region. Last year, the country’s outstanding debt rose by 20% year-on-year to 11.73 trillion pesos.
The country’s debt to gross domestic product (GDP) ratio is now at a 16-year high of 60.5%. Meanwhile, inflation rose to 3.8% in April 2022, reaching the upper limit of the country’s inflation target amid a spike in basic commodity prices, according to the Philippine Statistics Authority.
To head off a massive budget deficit and potential decline in the country’s sovereign credit rating, outgoing finance secretary Carlos Dominguez III has called on the incoming government to raise taxes as part of a fiscal consolidation program.
“Pursuing the fiscal consolidation and resource mobilization program as proposed will help us continue to spend on socioeconomic programs, maintain our credit ratings, and grow out of our debt,” Dominguez said, calling on his successors to make some tough choices in the coming months to ensure macroeconomic stability. “Taking action now is our responsibility to future generations.”
Macroeconomic fragility presents a serious challenge to Marcos Jr, who has vowed affordable basic goods, high economic growth and continuation of the incumbent’s massive “Build, Build, Build” (BBB) infrastructure program to generate jobs.
“We’re planning and thinking of how we can boost the Philippine economy, of how we can continue President Rodrigo Duterte’s ‘Build, Build, Build’, which we will expand and improve,” Marcos said during the election campaign.
His administration is set to inherit as many as 88 big-ticket projects, with 35 of them set for completion in 2023. Up to 20 projects, however, are still up for review. According to available data, the vast majority (60 out of 88) of the BBB projects consist of hard infrastructure such as dams, railways, roads, bridges and seaports.
Thus, Marcos Jr’s ability to deliver on his promises will largely depend on the technocratic alchemy and overall credibility of his incoming cabinet. Earlier, his sister Imee advised the president-elect to assemble a “team of rivals” from various camps, including from former reformist-liberal adminstrations, in order to press ahead with a competent and unifying administration.
“For the Cabinet members, we are recommending a lot of names coming from different parties. Because the dream ever since—even during my father’s time—is to have a so-called ‘team of rivals’,” Imee said. “Even if they’re from different sides of the political fence, even if they have different ambitions and parties, if they have one ambition for the country, why not gather the best and brightest?”
So far, Marcos Jr has largely followed his sister’s advice by picking a number of Western-trained and renowned technocrats to implement his ambitious economic agenda. For example, he appointed former president Benigno Aquino III’s NEDA secretary, Arsenio “Arse” Balisacan, an agriculture economist by training, to oversee overall economic planning and enhancement of the country’s food security.
“I have also tapped an old friend who’s also formerly in this position, Arse Balisacan, who is our former NEDA and I’ve asked him to return to NEDA,” Marcos Jr said in his first major briefing as president-elect this month.
“I’ve worked with him extensively at the time when I was governor. We have very similar thinking in that regard, I know he’s very competent, I know his policies are policies that will be for the betterment of our country,” he added.
Diokno, his pick for finance department chief, has worked under the Aquino, Estrada and Duterte administrations, Appointed as BSP governor in 2019, Diokno deftly oversaw macroeconomic stabilization throughout the pandemic as well as careful regulation of the financial markets.
As a former budget secretary, he is largely known for unorthodox “neo-Keynesian” fiscal policies, including aggressive expansion in infrastructure investments and overall focus on growth and employment generation.
“As finance secretary, I will strive to continue prudently and carefully balancing the need to support economic growth, on one hand, and to maintain fiscal discipline on the other,” he promised.
Follow Richard Javad Heydarian on Twitter at @richeydarian