Sinking or winning: How was business confidence in Marcos' first 100 days?

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Metro Manila (CNN Philippines, October 7) — Months before the May elections, some investors expressed concerns about a Marcos presidency, with his closest rival winning their confidence. After three months of serving as the country's chief executive, did President Ferdinand Marcos, Jr. actually gain the business community's confidence?

Polls and reports surfaced several months before the late dictator's son dominated the presidential race, with United Kingdom-based think tank Pantheon Macroeconomics seeing his victory as a "risk" to the Philippines' economic rebound.

However, Marcos may have turned the tables when he bared his economic team, securing business groups' optimism for a clearer road to recovery following the country's bleak financial position caused by the COVID-19 pandemic.

Fueling investors' interest

For George Barcelon, president of the Philippine Chamber of Commerce and Industry (PCCI), the President was off to a good start with "old hands" holding key Cabinet positions, such as finance, energy, labor, the central bank,and the "most critical agency," the Department of Agriculture which Marcos himself leads.

This, despite the previous administration's mounting debts reaching ₱12.79 trillion and several international problems pushing fuel prices to skyrocket and impacting local inflation.

Another business group also gave Marcos a passing grade for picking the "proper people in the right positions" in the Cabinet.

READ: LIST: Who are Bongbong Marcos' appointees?

"We're definitely very positive in terms of the actions that the Marcos government has been taking. We've already seen him trying to put in place the proper people in the right, key positions. That's one very strong positive note," Michael Guarin, president of the Financial Executives Institute of the Philippines (Finex), said during an interview with The Final Word.

Guarin even said that the Philippines has been gaining popularity in the business community, stirring up interest from investors.

"They're just positioning themselves, you know, and waiting for the proper time to strike," Guarin said.

A few months before Rodrigo Duterte left his post, some key business laws were liberalized to boost foreign direct investments (FDI), such as the lifting of foreign ownership cap in certain sectors. The Philippines ended 2021 with record FDI net inflows hitting $10.5 billion.

Recalling the recent trip of Marcos to the US, which allowed the Philippines to secure almost $4 billion in business commitments, Barcelon shared he witnessed the "effort [was] there" to present the country as an attractive investment hub.

Claiming before US foreign investors that the Philippines is "Asia's fastest rising economic star," Marcos has positioned the country as the "smart investment choice."

"The President really took the time out to join not only the economic briefing, but the sessions with particular sectors. He joined smaller groups where invitees were investors from America and also the local business stakeholders and I sat in two of them and I found that discussions were very open," Barcelon said in a phone interview.

Political forces in business?

Think tank Infrawatch convener Terry Ridon, however, floated the controversial deal between media giants TV5 and ABS-CBN, which was aborted following political pressures from the same lawmakers who led in killing the Kapamilya network's franchise renewal push. 

"The scuttling of the TV5-ABS-CBN acquisition as a result of political interference by the President's allies raises questions on whether the business community can truly conduct its affairs without political muscle-flexing. If administration allies can do this to large conglomerates, it can easily do the same maneuverings to smaller, less-established businesses," he said.

"If this will be the prevailing business and governance climate for the rest of the President's term, it is all but certain that investor confidence will remain equivocal except for businesses fully allied with current administration," Ridon added.

Ridon also expressed his dismay over Marcos' lack of clear initiatives to bolster the infrastructure sector, address Metro Manila's years-long traffic issue, and make power bills cheaper, saying the latter only "rehashed" Duterte's massive Build, Build, Build program.

READ: Lawmakers seek probe into ABS-CBN, TV5

For him, Marcos' days in the Palace only boasted "high-level events benefiting no one except the country's new political class, corruption scandals and resignations by the President's appointees, and avoidable mismanagement of public-facing offices."

But Marcos remained adamant about his approach to enticing businesses, with the latest being his recent trip to Singapore that sparked criticism after he was spotted attending the Formula 1 Grand Prix, a high-class international racing event, during a time when Filipinos were suffering from rising prices.

Unbothered, Marcos said racing was "the best way to drum up business" as he described his trip as a "productive one."

More investments, More jobs

Aside from multibillion-dollar commitments from the US, Marcos also amassed investment pledges worth $14.36 billion or ₱804.78 billion from his state visits to Indonesia and Singapore, covering the sectors of renewable energy, data centers, e-commerce, broadband technology, startups, government housing, and agriculture.

Guarin said that while the pledges would not immediately translate to hard cash, he expressed confidence they would start pouring in "within the next 12 months."

With expectations of more investments settling in the Philippines, would the unemployment rate ease?

Barcelon said that they would "definitely add to more job opportunities."

Just this Thursday, Oct. 6, data from the Philippine Statistics Authority showed that the jobless rate in August was slightly up to around 2.68 million Filipinos against the 2.6 million recorded a month ago.

Josua Mata, secretary general of labor group Sentro, seemed hopeless about the current administration's plans to fix labor woes.

Mata said that while more jobs were restored following the reopening of the local economy, Filipinos still face potential layoffs.

"More worrisome is the fact that jobs in the manufacturing sector is lagging behind. And it is expected to decrease as companies that are part of supply chain are retrenching. Recently, at least 4,000 workers were announced to be retrenched in Mactan Export Processing Zones. Even Shopee recently had a mass layoff," he said in an e-mail interview.

In the face of almost stagnant salaries, workers' plight is further worsened by the surging prices of basic commodities, according to Mata. 

Minimum wage earners in Metro Manila only get ₱533 to ₱570 per day after the government's wage board approved a ₱33 increase in May.

"While the rising inflation is rooted in the current global crisis, it did not help that government is failing to ensure the supply of needed commodities as can be seen in the sugar crisis fiasco," he said.

Ridon also said the situation looks bleak amid rising inflation, limited fiscal space, and higher interest rates.

"All of these factors will make it more difficult to do business, as higher interest rates will make it costlier to open new businesses or undertake expansion. To be frank, the current economic environment will make it hard for workers to get new jobs, and worse, to keep their jobs," Ridon said.

While he kept his bullishness, Barcelon said the government must ensure inflation is controlled.

"If inflation is not in check, the impact on the lower-income group would be much more. Hopefully, we progress with the additional investments both locally and attract more foreign indirect investments," he said.