There are also severe geographical imbalances in development and poverty reduction. While self-reported poverty reached as high as 70% in Mindanao, official poverty figures note that about one-third of farmers and fishers live in poverty.

These are stark reminders of how disconnected many Filipinos are from the hyped development prospects often reflected in macroeconomic assessments.

Out-of-pocket costs for healthcare remain a major impediment to access for low-income Filipinos. The Covid-19 pandemic exposed deep and lingering governance challenges in the health sector, with a
very slow and uneven
vaccine rollout and a lingering shortage of healthcare workers.

On the education front, the recently released
2022 Program for International Student Assessment
results underscore how far Filipino children are behind students in other nations.

Of the 81 participating countries, the Philippines ranked sixth from the bottom in mathematics and reading and third from the bottom in science.
Another study
revealed that nine out of ten Filipino children aged ten were unable to read simple text.

Creating enough high-quality jobs remains a major challenge for the Philippines, which continues to lag behind other ASEAN economies in attracting job-creating foreign direct investment.

The Philippines' 2022 foreign direct investment reached about $9.4 billion – still lower than Thailand's $10.2 billion, Malaysia's $15 billion, Vietnam's $17.9 billion and Indonesia's $21.4 billion.

On this front, the Philippines hopes to benefit from the rebalancing of global value chains driven in part by geopolitical tensions between the United States and China.

A“first of its kind”
US trade and investment mission
is set to visit Manila in early 2024 to begin talks on a wide range of investment areas ranging from green metals to semiconductors and renewable energy.

The Philippines' recent foreign policy pivot to ramping up longstanding defense alliances –
notably with the United States
and Japan – can be leveraged to take advantage of recent
friendshoring of manufacturing in Asia .

Promoting more inclusive and sustainable growth depends on reforms in education, health, food security, social protection and job creation.

The recent passage of laws to institutionalize and strengthen social protection, universal healthcare and to provide free tertiary education aims to boost human capital investments in one of the youngest countries in Asia.

Under the banner of“Build Better More,” the infrastructure investment program of the Marcos administration continues to finance roads, bridges, airports, seaports and other key infrastructure in the countryside alongside a
larger push for digitalization .

Concerns over
leakages in the infrastructure purse
have been raised by local leaders and academics, who argue that this risks
watering down the impact
of these investments. Similar concerns have been raised about the Maharlika Investment Fund, a sovereign wealth fund signed into law in July 2023.

Transparency International's 2023 corruption report ranked the Philippines 116th out of 180 countries, showing little improvement from its 2021 ranking. A Pulse Asia survey commissioned by international think tank Stratbase ADR Institute revealed that 84% of Filipinos believe that the Marcos administration needs to pursue stronger anti-corruption efforts.

But there are early positive signals. The US Millennium Challenge Corporation approved the development of threshold programs for the Philippines in December 2023 in recognition of its renewed commitment to advancing reforms in good governance, human rights and anti-corruption.

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This signals a re-engagement with the Millennium Challenge Corporation
after ties were severed
by the Philippine government in 2017 in light of concerns over human rights violations during its anti-drug campaign.

Reformists in the Marcos administration are also pushing for changes involving extensive digitalization of the bureaucracy, which will promote greater efficiency and good governance.

Philippine leader Ferdinand Marcos Jr is pushing for bureaucratic reforms. Image: Twitter

Recent and anticipated legislation – like the Tatak Pinoy bill pushing for a more sophisticated industrial policy – is expected to contribute to the dynamism and inclusiveness of the Philippines' industrial push in the post-pandemic world.

Yet the crux will be in policy execution and good governance. President Marcos will need to ramp up technocracy and temper political accommodation to make inroads here.

President Marcos has also ordered a study on the possible need for
constitutional amendments , with a focus on loosening the constitution's economic provisions to attract more foreign direct investment.

While touching the constitution has always generated controversy, it remains to be seen whether bolder steps like this can help take full advantage of the present global economic rebalancing.

Ronald U Mendoza, PhD is Senior Economist at the Ateneo Policy Centre, Ateneo de Manila University and former dean of the Ateneo School of Government from 2016 to 2022.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.