Assessing the first half of the Marcos Jr. administration: Comparisons
(Part 4)
To assess the quality of governance in the Philippines, it would be enlightening to study the Worldwide Governance Indicators (WGI) which provides cross country comparisons.
The WGI summarizes complex governance realities into six composite dimensions: Voice and Accountability; Political Stability and Absence of Violence/Terrorism; Government Effectiveness; Regulatory Quality; Rule of Law; and Control of Corruption. These indicators are constructed from approximately 35 international data sources, including surveys of citizens and business enterprises as well as expert assessments. These then are strategically combined using unobserved components models to account for measurement error.
In terms of Voice and Accountability, as compared to other similar economies like Vietnam and Malaysia, the Philippines has experienced a steady erosion since 2014. In 2024, the third year of the Marcos Jr. administration, the Philippines’ Governance index deteriorated as compared to Malaysia. It is no consolation that the Philippines still ranks higher than Vietnam on this count since Vietnamese socialist leaders never pretend that they are building a democratic society.
As regards Political Stability, the Philippines experienced a decline in 2019 during the Duterte administration. To the credit of the Marcos Jr. administration, there was a marked improvement on this score in 2024. However, from 2014 to 2024, compared to both Malaysia and Vietnam, the Philippines had been ranked as the least politically stable. I can only surmise that this poor record is no longer due to insurgency, which has markedly declined through these years, but to the antics and poor behavior of Filipino politicians who are the greatest sources of instability and corruption.
As regards Government Effectiveness, the Philippines continues to suffer a decline which started in 2014 and remains below earlier-decade levels. Unlike Political Stability, which recovered in 2024, Administrative Effectiveness shows no comparable rebound, pointing to enduring challenges to public service and policy execution, despite legislation and pronouncements against red tape and bureaucracy. In 2024, the Philippines continues to compare poorly in Government Effectiveness with Malaysia but ranks better than Vietnam.
Regulatory Quality in the Philippines has remained broadly stable over the past decade, reflecting policy continuity across administrations. This stability, however, has not translated into Government Effectiveness, indicating persistent challenges to regulatory implementation rather than rule design. As regards cross-country comparison, the Philippines lags Malaysia in regulatory quality in 2024 but compares well with Vietnam.
Rule of Law indicators for the Philippines deteriorated markedly during the Duterte administration, reflecting the brutal campaign against drug offenders. There was a marked improvement during the Marcos Jr. administration but in 2024, the Philippines still lags behind both Malaysia and Vietnam under this category. Malaysia has sustained strong legal institutions, while Vietnam has gradually improved legal predictability under centralized governance.
As regards the Control of Corruption, the Philippines has remained persistently low over the three administrations, with no statistically meaningful improvement, despite changes in political leadership. In contrast, Malaysia and Vietnam exhibit gradual but discernible gains, reflecting stronger enforcement credibility and institutional coherence. Considering what happened in 2025 concerning the flood control scandal, the Philippines must have seen a significant decline under Control of Corruption, comparing even worse with its two ASEAN neighbors despite the fact that Malaysia and Vietnam have had similar well publicized corruption cases.
INFLATION
Of the many politico-economic pressures facing the Marcos Jr. administration today, consumers can find some relief in newfound price stability. By the end of 2025, thanks to effective monetary and fiscal management, coupled with a very pro-active program for food security, the economy was able to recover from the inflationary pressures generated by the pandemic. From a high of an annual rate of 6% in 2023, headline inflation averaged 1.7% at the end of 2025, below the 2% to 4 % target set by the Bangko Sentral ng Pilipinas (BSP). This figure is near a decade-low, second only to the 1.3% seen in 2016 at the end of the administration of Benigno Aquino III.
The inflation story is worth telling to highlight the role of effective responses of the government to the abnormal conditions that brought about high consumer prices. Just at the end of the Duterte government, the-BSP Governor Benjamin Diokno cited rising food and energy prices as the immediate causes of price hikes. On the former, the African Swine Fever (ASF) outbreak was the most salient cause of the sudden food cost rise, exposing regulatory and technological bottlenecks. As regards energy, the global reopening from a year of lockdowns served as a boon to the oil producing nations. With industries resuming activities and consumers looking for recovery from lost time, the world resumed spending with a vengeance. As a result of the very high demand, the West Texas Intermediate (WTI) crude benchmark lunged 55.4% to $75.2/barrel, pushing energy-related inflation higher.
A year later, inflation truly emerged with a vengeance, with the Russian invasion of Ukraine severely disrupting global supply chains. The first year of the Marcos Jr. administration was literally a trial by fire, as inflation accelerated to 5.8%. The same oil benchmark reached an astonishing high of $130.5/barrel in 2022, with the consequent abnormal price increases of energy, food, and transport prices (important components of the consumer price index). Making matters worse, export bans among major rice producers, the continuing spread of ASF, and successive deadly typhoons led to food inflation of 5.9%. It was a real challenge for the Marcos Jr. administration to tame this inflation caused by outside forces.
First, due credit must be given to the excellent men and women of the BSP, who have kept the central bank’s integrity and responsibly carried out its primary mandate of containing inflation. Pivoting from pandemic easing to post-pandemic tightening was not a politically popular decision, but one that had to be made, nonetheless. It was also providential that the current BSP Governor, Eli Remolona, had been dubbed as one of the world’s top central bankers for two straight years by Global Finance magazine (a reputation also enjoyed by former Governor Diokno and other Governors in the past). In fact, in general our central banking system is considered one of the best in the ASEAN region.
Second, the Marcos Jr. administration must also be commended for an effective food security program, which from the beginning was assigned the highest priority by the President himself, who assumed the role of Secretary of Agriculture for the first 14 months of his term and subsequently appointed a very competent successor in the person of Francis Tiu Laurel. Also a wise move of the Department of Agriculture was the tariff-slashing program, which brought down tariffs on our staple cereal from 35% to 15%. This move was favorably complemented by the rice producing nations like Vietnam and India increasing output to benefit from the higher prices. As expected, rice prices all but tumbled, providing downward pressure on inflation.
Another boon to lower prices was the decision of the OPEC to increase oil output to punish its errant members. This caused oil prices to tumble below $70/barrel in recent years, giving much needed breathing room to the consuming public.
We can say that a combination of effective government management of the economy and favorable geo-political conditions give Filipino consumers some breathing space in the battle against inflation. The Marcos Jr. administration now has room to focus on the other Key Result Areas (KRAs) of improving the long-term productivity of the agricultural sector, attracting higher levels of FDIs, resuming the Build, Build, Build program started during the Duterte administration, and reducing poverty incidence to a single-digit level.
Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.
