On June 30, 2022, Ferdinand Marcos Jr was sworn in as the 17th President of the Philippines following an unprecedented landslide victory over his close rival Vice President Leni Robredo and other candidates. The successful completion of the Philippines elections given the ongoing political instability being witnessed in some of the countries in the region is a welcome development. The new administration under Marcos Jr would be confronted with two major challenges one being sustaining the recovery of the economy, which has suffered immensely on account of the pandemic and the second arising from the instability in the South China Sea (SCS) which would continue to pose challenge for its foreign policy.
Addressing the Economic Challenge
At the inauguration, Marcos Jr acknowledged his predecessor, Duterte for his courage in making hard decisions aimed at bringing change and progress. The new administration is drawing a comprehensive, all-inclusive plan for economic transformation.[i] The new administration is expected to maintain continuity with the long-term economic plans and policies of the previous administration in which priority would be given towards infrastructure, digitalisation, retail, and other sectors. This would in turn help promote foreign investments and opportunities for new businesses.[ii]
The Marcos Jr administration is taking over at a time when the Philippines is starting to see some early signs of economic recovery after two years, since the COVID-19 pandemic which triggered worldwide economic disruptions.[iii] As per the Asian Development Bank Outlook for 2022, the economic growth for the Philippines in 2022 and 2023 is projected at 6 percent and 6.3 percent, respectively.[iv] Further, according to the Philippines Statistics Authority, the country attained a strong Gross Domestic Product (GDP) growth of 8.3 percent in the first quarter of 2022, surpassing pre-pandemic levels. This growth is the highest amongst its other ASEAN peers. Overall investment has grown by 20 percent in the first quarter of 2022 from a negative 13.9 percent in 2021. FDI stood at US $ 2.4 billion, which is two percent higher in comparison to 2021 and exports also rose by 10.3 percent, while imports rose to 15.6 percent.[v]
To ensure the continuity of the growth momentum, the new administration under President Marcos Jr will need to address several challenges that include public transportation, water security, and energy security, which would be critical towards the economic recovery. The ambitious infrastructure development programme “Build, Build, Build” launched by the previous administration in 2016 has evolved with increasing government spending of about 5 percent of the GDP on infrastructure projects annually. The new administration would inherit 88 infrastructure projects due for completion in the next six years. This includes expressways, railways, bridges, flood control projects, and dams, among others. President Marcos Jr promises to continue with the infrastructure programme. However, with the mounting debt faced by the Philippines, as per the World Bank it expects Philippines to shift to Public-Private-Partnerships (PPPs) for infrastructure investments. This would also help reduce the delays in the implementation of the various infrastructure projects.[vi] Therefore, it can be said that the new administration under Marcos Jr would be inheriting an economy which is expected to gain more traction in the coming years.
Addressing the Foreign Policy Challenges: The Contestation in the South China Sea
Addressing the country’s security and its relations with the United States and China would be a top priority for the new administration. The Philippines’ 1987 Constitution calls on Filipino leaders to pursue an independent foreign policy in which their relations with other countries would be guided by “..national sovereignty, territorial integrity, national interest and the right to self-determination...”[vii]. China’s maritime assertiveness in the South China Sea (SCS) with incidents in which it ousted Philippine fisherman from Scarborough Shoal and took physical control remains a cause of great disequilibrium for national and regional security. The ongoing contestation with China over the SCS and Beijing’s refusal to respect the arbitral ruling that gives Philippines sovereignty over its exclusive economic zone would continue to remain a major security and foreign policy challenge. The former administration under Duterte adopted a non-confrontational approach towards China and instead promoted further engagements through deeper trade and investment. Since the ruling of 2016, relations between Philippines and China witnessed a dramatic change under the Duterte administration. The relation turned to a somewhat positive trajectory with the Philippines taking part at the first Belt and Road Initiative (BRI) forum in May 2017. By 2017, thirteen bilateral cooperation agreements were signed between China and Philippines with US $ 24 billion worth of Chinese funding and investment being pledged.[viii] During the visit of Chinese President Xi Jingping to the Philippines from 20-21 November, 2018, both nations established a Comprehensive Strategic Cooperation. The Joint Statement after President Xi’s meeting with President Duterte saw the conclusion of 29 agreements which also included joint oil and gas exploration and Beijing being asked to get involved in Duterte’s signature US $ 180 billion “Build, Build, Build”, infrastructure programme.[ix]
During an interview as a Presidential candidate held in January 2022, Marcos gave an indication of what his administration’s policy would be towards China.[x] Marcos Jr laid out three ways in which a territory can be gained or lost; one is through arbitration with the agreement of both parties. However, according to Marcos Jr with regards to“.. the arbitration with China, the arbitration is no longer an arbitration if there is only one party...” and “..is no longer available to us...”[xi] The second way in which territory is lost or gained is through war, which according to Marcos Jr is an option which must be dismissed outright because “..it is a completely ludicrous assertion that going to war with China is going to be advantageous to the Philippines or even to China...”[xii]. Marcos further added that nobody wants to go to war “..China does not want to go to war.. Philippines must not go to war...”[xiii] The third way is through bilateral agreement with China“..and that is what we are left with.. We must continue to engage with China.. and must try and continue to engage.. there is no other way...”[xiv]Marcos Jr also clearly was not in favour of US intervention on the ongoing dispute. He stated that while“..we have a very strong traditional institutional and special relationship with the United States..” but since the problem is between the Philippines and China, Manila does not want US intervention since its intervention “..is bound to fail.. because you are putting two protagonists together…”[xv] On the question of whether there is value of the Permanent Court of Arbitration’s 2016 decision which stated that the West Philippines Sea belongs to the Philippines; Marcos Jr stated that there is value because it confirmed its sovereignty over the disputed territory.[xvi]
The January 2022 conversation with the then Presidential candidate Marcos Jr indicates an approach towards China which would see continuity with that of the previous administration. This would include engaging with China for greater trade and investments while avoiding any conflict since the Philippines remains deeply concerned on the prospects of military confrontation with China. However, the new administration under Marcos Jr could also adopt a more balanced policy by engaging with both China and the United States. This was also emphasised by President Marcos Jr during his inaugural speech where he stressed on the importance of strengthening relations with both the US and China which would “..make a more balanced and stable new global environment for us to work in”.[xvii] This would be a departure from Duterte who adopted a policy of strategic re-orientation away from the United States towards China. This was on account of many issues including United States’ criticism of Duterte’s war on drugs that triggered Philippines foreign policy shift away from the United States towards China.[xviii]
The ongoing contestation in the SCS, which in the last decade witnessed Chinese expansionism, could become the greatest flashpoint for conflict in the region, if not handled with constructive engagement through diplomacy. This has also been emphasised by President Marcos Jr who was asked whether Philippines is prepared to engage in a defensive war to protect its territorial sovereignty if diplomacy failed? To this he responded by stating that “..we must not allow diplomacy to fail.. it is the only option we have..”[xix].
President Marcos Jr has begun his six-year presidency at a time of intense crises in which the Philippines was one of the worst-hit countries in Asia during the two-years of COVID-19 pandemic. As the pandemic began to ease early this year, the Russia-Ukraine conflict has sent global inflation soaring and sparked fears of a food and energy crisis. The Philippines’ economy which has begun to make good recovery in 2022, its growth trajectory would remain dependent on the domestic reforms undertaken by the new administration and to an extent on the external environment. As Philippines envisage an independent foreign policy in order to ensure its national interest, sovereignty, and territorial integrity; a balanced policy of engagement would be critical. It would however be difficult for Philippines to remain insulated from the disequilibrium being witnessed in the current international system, stemming from the rising great power rivalry and tensions.
*Dr. Temjenmeren Ao, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
[i] Catherine S. Valente and Kristina Maralit, “Marcos Promises Future of sufficiency in Inaugural Address”, The Manila Times, July 1, 2022, https://www.manilatimes.net/2022/07/01/news/national/we-will-go-far-together/1849385, Accessed on July 1, 2022.
[ii]“Robust growth propels Philippine economy to fastest-growing in ASEAN”, The Straits Times, June 30, 2022, https://www.straitstimes.com/asia/se-asia/robust-growth-propels-philippine-economy-to-fastest-growing-in-asean, Accessed on June 30, 2022.
[iii]Sarah Jane A. Castanares, “Keeping the Inflation target unchanged for 2022-2024”, Economic Newsletter,No.22-01, January 2022, Department of Economic Research, https://www.bsp.gov.ph/Media_And_Research/Publications/EN22-01.pdf , Accessed on June 30, 2022.
[iv]“Asian Development Outlook”, Asian Development bank, April 2022, https://www.adb.org/outlook?gclid=EAIaIQobChMIm7no87rUAIV25hmAh1a0gEDEAAYASAAEgJIovD_BwE, Accessed on June 30, 2022.
[v]“Robust growth propels Philippine economy to fastest-growing in ASEAN”, The Straits Times, June 30, 2022, https://www.straitstimes.com/asia/se-asia/robust-growth-propels-philippine-economy-to-fastest-growing-in-asean, Accessed on June 30, 2022.
[vi]Aika Rey, “Build, Build, Build: Mapping the Duterte administration’s infrastructure legacy”, Rappler, June 28, 2022, https://www.rappler.com/business/build-build-build-mapping-duterte-administration-infrastructure-legacy/ , Accessed on June 30, 2022.
[vii]Ann Marie Murphy, “Great Power Rivalries, Domestic Politics and Southeast Asian Foreign Policy: Exploring the Linkages”, Asian Security, August 4, 2017, https://www.tandfonline.com/doi/full/10.1080/14799855.2017.1354566 , Accessed on June 30, 2022
[viii]Darlene V. Estrada, “The Belt and Road Initiative and Philippine Participation in the Maritime Silk Road”, Centre for International Relations and Strategic Studies, Foreign Service Institute,Republic of PhilippinesVol IV, No 7, April 2017, http://www.fsi.gov.ph/the-belt-and-road-initiative-and-philippine-participation-in-the-maritime-silk-road/, Accessed on June 30, 2022.
[ix]Harini V, “Xi's visit to the Philippines may be an attempt to 'woo Manila away' from Washington's orbit”, CNBC, November 21, 2018, https://www.cnbc.com/2018/11/21/china-xis-visit-to-manila-may-be-to-woo-philippines-from-us-expert.html, Accessed June 30, 2022.
[x]Mely Caballero-Anthony, “A Marcos returns to power in the Philippines”, Brookings, May 13, 2022, https://www.brookings.edu/blog/order-from-chaos/2022/05/13/a-marcos-returns-to-power-in-the-philippines/, Accessed on June 30, 2022.
[xi]“The 2022 Presidential One-On-One Interviews with Boy Abunda featuring Former Senator Bongbong Marcos”, You Tube, January 25, 2022, https://www.youtube.com/watch?v=wFD0CwgfMwQ&t=2012s, Accessed on June 30, 2022.
[xvii]Catherine S. Valente and Kristina Maralit, “Marcos Promises Future of sufficiency in Inaugural Address”, The Manila Times, July 1, 2022, https://www.manilatimes.net/2022/07/01/news/national/we-will-go-far-together/1849385, Accessed on July 1, 2022.
[xviii]Ann Marie Murphy, “Great Power Rivalries, Domestic Politics and Southeast Asian Foreign Policy: Exploring the Linkages”, Asian Security, August 4, 2017, https://www.tandfonline.com/doi/full/10.1080/14799855.2017.1354566 , Accessed on June 30, 2022
[xix]“The 2022 Presidential One-On-One Interviews with Boy Abunda featuring Former Senator Bongbong Marcos”, You Tube, January 25, 2022, https://www.youtube.com/watch?v=wFD0CwgfMwQ&t=2012s, Accessed on June 30, 2022.