Marcos Jr. lines up targets at first SONA
Marcos Jr. delivers his first SONA to a full house of allies. (Photo: Manila Bulletin)
The state of the nation address (SONA) is an annual speech where the president lays out their agenda and any promises they have for the country. It is an opportunity to let Filipinos know that there are plans in place for the various crises we face.
A President’s first SONA—especially one whose campaign ran almost solely on the promise of “unity”—sets the tone for the next six years of their leadership.
Like his predecessors, Ferdinand Marcos Jr. made big promises at his Monday SONA. Among his top priorities: Economic recovery, face-to-face classes, and food security.
Bills, bills, bills
Right out of the gate, Marcos Jr. acknowledged the need for major tax reforms. He promised that the Philippine tax system will be updated to keep up with the digital economy. This includes value-added tax on digital service providers. Marcos Jr. also promised to make paying taxes easier by simplifying procedures.
As acting agriculture chief, Marcos Jr. previously announced plans to reduce national importation and boost local production of things like corn and rice. During the SONA, he announced plans to order a one-year moratorium on the payment of land amortization and interest payments.
“A moratorium will give the farmers the ability to channel their resources in developing their farms, maximizing their capacity to produce, and propel the growth of our economy,” said Marcos Jr. “It will unburden the farmers of their dues and be able to focus on improving farm productivity.”
Marcos Jr. laid out 19 priority bills during his SONA that include establishing new departments, tax packages for the real estate and financial sectors, and mandatory ROTC. While ambitious in cited numbers and plans, some have said his SONA lacked execution details and “strategic focus.”
A key question that went unanswered throughout the entire speech arises from all these plans: How is the government going to fund all of these?
Taxes, baby
No surprise there.
We established a few weeks ago that the economic team of the Marcos Jr. administration will bank heavily on taxing things like Netflix and even single-use plastics. The Department of Finance previously discouraged income tax cuts to manage government debt. Should the government decide to hold back on reducing our income tax for 2023, it can pull P97.7 billion on a three-year average.
Currently, the Philippine government’s debt stands at 63.5% to the gross domestic product. This is among the highest in Southeast Asia, next to Thailand. Philippine Star columnist Rey Gamboa highlights that a way to deal with debt is to support struggling sectors like agriculture through a sound economic resurgence program.
Marcos Jr. also hopes the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law can turn the Philippines into a destination for investors. Passed under the Duterte presidency, the CREATE Law has been criticized for allowing generous tax cuts and incentives for large corporations. Legislators in the Makabayan bloc have called the CREATE Law “anti-poor” and instead proposed a tax program for the masses and middle class.
“Why are the poor and the middle class the first targets of the government when imposing higher taxes to gain funds for the reduction of government deficits and debt accumulation?” Alliance of Concerned Teachers Representative France Castro said in a statement last May.
In the face of soaring food prices and a global recession, consumers are gearing up for even more wallet-tightening as the government scrounges for cash to fund programs that are supposed to help the public. Just another day in the era of the Filipino financial crisis.
