Marcos faces uphill battle as divided Congress clouds reform push

By Kenneth Christiane L. Basilio, Reporter

PRESIDENT Ferdinand R. Marcos, Jr. could face legislative headwinds as a divided Congress threatens to derail his reform agenda, political analysts said, casting uncertainty over his efforts to build a lasting legacy ahead of the 2028 presidential race.

Contentious proposals will likely be subjected to deeper scrutiny in Congress, which could force the President to settle for watered-down measures at the expense of radical structural reforms, they added.

“A fragmented legislature creates a ‘transactional’ environment where bills will require heavier political bargaining and concessions,” Cleve V. Arguelles, chief executive officer and president at Philippine think tank WR Numero Research, said in a Viber message.

“A split Congress slows momentum for structural reforms and forces Mr. Marcos to focus on popular, low-conflict measures rather than ambitious policy changes,” he added.

The administration suffered a setback in the May 12 elections after only six of Mr. Marcos’ 11-man senatorial slate secured seats in the chamber — the worst showing by an incumbent since 2007.

While this poses a challenge for the President to marshal support in the chamber, Mr. Marcos has secured backing in the House of Representatives after his cousin, Speaker Ferdinand Martin G. Romualdez, retained leadership of the chamber in the 20th Congress with a supermajority vote.

“There is a significant change in the Senate as shown in the increase in the number of pro-Duterte senators,” Dennis C. Coronacion, who heads the University of Sto. Tomas Political Science Department, said in a Facebook chat.

With five of Vice-President Sara Duterte-Carpio’s endorsements winning senatorial seats, the total Duterte-allied senators in the chamber have risen to seven, which Senator Ronald M. dela Rosa has called the “Duter7” bloc.

“This division means that while Malacañang can push bills swiftly through the House, the Senate may act as a brake, especially on contentious measures,” Ederson DT. Tapia, a political science professor at the University of Makati, said in a Facebook Messenger chat. “The risk is that Marcos’ key reforms could stall or be watered down in bicameral negotiations.”

This may not be the case for non-controversial bills, which are less likely to encounter a congressional deadlock, said Mr. Coronacion.

20TH CONGRESS AGENDA
The President campaigned on a platform of economic revival, promising to reduce rice prices, boost agriculture, and usher in a new industrial era. Past the midpoint of his term, Mr. Marcos faces a critical window to enact long-term reforms that could define his legacy and help shore up support for his potential successor.

The Executive has yet to release its legislative wish list for the 20th Congress, as of writing, but Mr. Marcos is expected to focus on pushing for the approval of education, health and agriculture measures — issues that Mr. Arguelles said are “politically safe and broadly popular.”

Aside from gut issue-based policies, George T. Barcelon, chairman of the Philippine Chamber of Commerce and Industry, said Mr. Marcos should usher in structural reforms on power and logistics to lower operational costs to help attract foreign investors into the country. He noted that policymakers should move away from relying solely on incentives to lure foreign investors.

“We’ve always been very open about trying to attract more foreign investors because we are the one among ASEAN countries getting the least amount of investments,” he said in a phone call. “But just putting it in the law, or keep on adding incentives may not make this happen because there are still gaps.”

The government should also reform the tax system by enacting a Magna Carta for taxpayers and streamlining procedures to simplify payments, Eleanor L. Roque, tax principal of P&A Grant Thornton, said in a Viber message.

“Transparency and clear rules also help in encouraging investors, local and foreign, to invest in the Philippines,” she said.

Authorities should also focus on improving tax collections for now instead of looking at implementing new taxes to first plug revenue gaps, she added. “It may be more important to focus on collection efficiencies now and improving taxpayers’ services.”

Mr. Marcos is, however, expected to call for new tax measures amid a worsening fiscal position, and the need for welfare programs, like financial aids, to help shore up support for his administration, said Anthony Lawrence A. Borja, an associate political science professor at the De La Salle University.

“With the current fiscal limits facing the government, tied with promises of more welfare and government subsidies, new or increased taxes would certainly be forwarded,” he said in a Facebook chat.

An August report, published by the Congressional Policy and Budget Research Department (CPBRD), recommended that policymakers pursue tax reforms to support the government’s fiscal consolidation plan, including improving tax administration and expanding the tax base.

“Tax reforms may involve prioritizing the implementation of previously planned excise tax measures, further improvements in tax administration, broadening the tax base and enhancing the control of tax incentives,” the think tank said.

The CPBRD recommended that Congress either increase tax rates on sugary beverages or impose a “proportionate” tax rate that scales with the sugar content of drinks.

Drinks that use caloric or non-caloric sweeteners are currently charged a P6 excise tax per liter, while drinks that use high fructose corn syrup, or any such sweeteners in combination are charged P12 per liter, under Republic Act No. 10963, the Tax Reform for Acceleration and Inclusion Law.

The think tank also recommended lawmakers consider narrowing the tax gap between cigarettes and vapes by increasing the tax rates on heated tobacco products, while also introducing a 20% ad valorem tax plus a P20 specific tax on electronic nicotine and non-nicotine devices.

There should also be a hike on road users’ tax rates, as the CPBRD said the current regime is “disproportionately low” and needs an update to keep up with the pace of new vehicles.

The Motor Vehicle User Charge rate varies depending on the vehicle type, gross weight and year model, according to the Land Transportation Office.

Policymakers should also consider implementing a global minimum tax regime to capture profits from multinational companies seeking to reduce their tax burden by setting up shop in the country, the think tank added.

The government has ramped up borrowing since the coronavirus pandemic, raising debt to 63.1% of gross domestic product (GDP) as of June, the highest since 2005, from only 39.6% in 2019.

This is above the 60% threshold considered by multilateral lenders to be manageable for developing economies. The Marcos administration aims to bring the debt ratio to 60.4% by yearend, and 56.9% by 2028.

National debt also jumped to a fresh high P17.27 trillion as of end-June, according to the latest government data.

“With the Philippines’ current fiscal position, we may see more aggressive borrowing done by the National Government after raising the country’s debt ceiling and raising taxes for digital services and long-term interest earnings,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.

However, pushing for tax reforms will likely face an uphill battle in the Senate, said Mr. Tapia. “Any tax measure must be packaged as pro-growth and shield the middle class to survive scrutiny.”

EXECUTIVE TOOLKIT
Mr. Arguelles said Mr. Marcos has a broad array of powers in his Executive toolkit to help advance key measures in the event of a legislative gridlock.

“Presidents in the Philippines operate in a hyper-presidential system with both formal and informal powers,” he said, citing the Executive’s power to disburse funds and appointment powers to government bodies, such as regulatory agencies.

“The control of disbursement of government funds still remains the most potent lever to reward allies and discipline dissenters,” he said.

“Administrative discretion can also help fast-track parts of his agenda without waiting for new legislation,” he added.

Mr. Marcos could also strike “quid pro quo” deals with lawmakers to block key legislation, offering plum political appointments or fast-tracking business licenses in exchange, said Mr. Coronacion.

the President could also use the Presidential Legislative Liaison Office to help negotiate compromises among lawmakers that are blocking his agenda, said Mr. Tapia.

“He could also time his endorsements to sway fence-sitting legislators,” he said. “The strategic use of public opinion and alliances with local governments can also pressure the Senate to act.”

Much depends on Mr. Marcos’ performance in the second half of his term, which will be crucial in shaping his legacy and laying the groundwork for a viable successor, he noted.

“If Marcos pushes through landmark measures — like fiscal reforms, infrastructure programs, or social protection laws — he strengthens his claim to a transformative legacy and positions an ally for 2028,” Mr. Tapia said. “Failure to deliver would risk painting him as a ‘caretaker president,’ making it harder to rally a successor and leaving the field open for opposition or Duterte-backed candidates.”