On the cabinet reshuffle and the BW Economic Forum
Last week, on May 22, the biggest piece of news was that President Ferdinand R. Marcos, Jr. requested all the Cabinet Secretaries and Presidential Advisers with Cabinet rank, to submit their courtesy resignations. The secretaries complied.
It is a good thing that the next day, May 23, the President rejected the resignations of the economic team and hence, reappointed them all. The team is composed of Finance Secretary Ralph G. Recto, Budget Secretary Amenah F. Pangandaman, Economics Secretary Arsenio M. Balisacan, and Presidential Adviser Frederick D. Go. Trade and Industry Secretary Ma. Cristina A. Roque was also reappointed. Many secretaries from the other teams — infrastructure, social sector, political, and defense — have not been reappointed as of May 26.
The economic team has delivered. It has pivoted the Philippine economy such that it has become one of the top three fastest-growing large economies in the world — those with a GDP size at Purchasing Power Parity (PPP) values of $500 billion and higher. There are 53 countries and economies in this category.
Some people and analysts are complaining that we are slowing down, that we were growing at a rate of 6-7% in 2021-2022. But they should see how other countries are doing, especially the developed economies of North America and Europe. Either they are crawling or contracting (“negative growth”).
Four indicators show that the economic team is composed of high performing and brilliant minds.
First is high GDP growth as discussed above.
Secondly, we are moving towards a low inflation rate, from 5.8% in 2022 to 3.4% in 2024, and only 1.4% as of April this year.
Thirdly, there is the pivot towards a low unemployment rate, from 5.4% in 2022 to 4.4% in 2023, and 3.9% in March this year.
Fourth is the sustained decline in the budget deficit. The deficit/GDP ratio went from -8.6% in 2021, to -7.3% in 2022, to -5.7% in 2024. Preliminary data from the first quarter of 2025, where non-tax revenues were rising at above-average growth while tax revenues were rising at a normal pace, suggests that the deficit/GDP ratio is likely to further fall to -5% by years end.
So, thank you, President Marcos Jr., for recognizing the great job done by the economic team, and ensuring the continuity and stability of their work and policies.
Over in the infrastructure team, Department of Energy (DoE) Secretary Raphael PM Lotilla has been moved by the President to become Environment Secretary. I think the President sees Mr. Lotilla’s good performance, like his continued promotion of nuclear energy, and hastening the expansion of LNG plants and NGCP transmission lines and projects. Meanwhile, I observe that the Department of Environment and Natural Resources (DENR) is not administered well, so the President needs a bright and performing secretary there.
Who will take the place of Mr. Lotilla? The OIC Secretary is DoE Undersecretary Sharon Garin, a former Congresswoman from Iloilo. I think Ms. Garin can lead the agency, but leaders from the energy sector can also do the job, like Emmanuel V. Rubio, an engineer-finance guy who is the current President and CEO of Meralco PowerGen (MGEN). But there might be legal problems in appointing him as DoE Secretary based on the DoE Act of 1992.
BW ECO FORUM
The BusinessWorld Economic Forum (BWEF) was held last week, on May 22, at the Grand Hyatt BGC. Among the stories and reports in BusinessWorld that came from the event are the following: “RoW, 99-year lease bills named PHL legislative priorities” (May 22), “Clarity sought on ‘green’ energy project economics” (May 22), “PHL must boost productivity, diversify growth drivers as trade shifts pose risks” (May 23), “Local governments deemed weakest link in ease-of-doing-business campaign” (May 25), “Unlocking the Philippines’ potential” (May 26, Amelia Ylagan’s Corporate Watch column in the Opinion page).
I liked the priority measures identified by Secretary Frederick D. Go, the Special Assistant to the President for Investment and Economic Affairs: bills on right-of-way (RoW), extended investor leases, and the mining fiscal regime.
The construction of toll roads, rail lines, transmission lines, power plants, and other infrastructure projects are often hobbled by RoW problems. The National Government should put its foot down hard on many local governments units (LGUs) and private landowners that prolong significantly the construction period and raise the cost of important infrastructure.
Related to this, I also liked the frank assessment by Eduardo V. Francisco, President of BDO Capital & Investment Corp., who said that many LGUs often become hurdles to ease of doing business in the country. Plus, the weak skills of many college graduates compared to what are needed by various industries.
To help unlock the country’s potential, we need real rule of law. The law applies equally to unequal people and businesses, no one is exempt, and no one can grant an exemption. This way even corrupt officials and legislators will be scared because the bureaucracy and heavy regulations they impose on ordinary businesses will also apply to them and their friends.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.
