MANILA: Philippine President Ferdinand Marcos Jr laid down his economic priorities in his annual address to Congress Monday (July 27), focusing on Filipino consumers battered by high prices due to the Iran War.
Marcos championed tax relief measures and lower electricity bills in his fifth State of the Nation address, vowing to help households that power the consumption-driven economy. He also pledged sustained subsidies to help an import-dependent nation that’s vulnerable to oil price swings caused by the Middle East conflict.
"For as long as it takes, you can expect that the government’s support will not stop,” the president said in his speech.
"We will redirect our programes toward our fellow Filipinos who are in greater need, so that the assistance can reach a wider scope and a greater number of people.”
He began his address by announcing progress in a long-running graft investigation, which has weighed on growth. He said cases will soon be filed, including against his cousin, the former House speaker.
The president received a standing ovation for proposing to end an unpopular charge where power consumers pay for electricity lost during delivery. That could be costly for Manila Electric Co., whose shares fell as much as 5.4% Tuesday, the biggest intraday move since 2023. In contrast, fast food giant Jollibee Foods Corp. shares rose as much as 2.6% in Manila, even as the broader market declined.
The president’s emphasis on consumption highlights how the Marcos government is trying to revive a fragile economy that has stumbled to its weakest growth since the pandemic. It also shows how Marcos is centering his economic agenda on issues directly affecting consumers, after his popularity declined.
His plans include raising the ceiling for non-taxable income to 350,000 pesos (US$5,675) from 250,000 pesos annually.
Despite some direct revenue losses, the president’s proposals are expected to get legislative support and boost the economy, said Domini Velasquez, chief economist at China Banking Corp. "There will be an impact on household spending, so these should have a positive impact on GDP,” she said.
Marcos’ pitch for relief measures covering middle income earners should be positive for consumer companies, including Jollibee, Century Pacific Food, Inc., Universal Robina Corp. and Monde Nissin Corp., according to Maybank Securities analysts including Kervin Sisayan.
Still, some economists are awaiting details of Marcos’ agenda to gauge how it will impact the country’s fiscal health. The official 2026 growth target was slashed to the 3.5% to 4.5% range in June, from as much as 6% before the Middle East conflict.
"While this could provide a boost to economic activity, it will be important to assess the corresponding impact on government revenues and identify measures that will preserve fiscal sustainability,” said Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines.
Marcos laid down an "economic populist program” in Monday’s speech as he tries to show tangible gains to the public, whose attention has been on the graft scandal and his feud with Vice President Sara Duterte, according to Anthony Lawrence Borja, an associate professor at De La Salle University in Manila.
"Overall, he is setting up a tall order for the government; a probable price to pay in order to maintain political stability and control,” Borja said. - Bloomberg
