Highlights: President Ferdinand Marcos, Jr.’s First State of the Nation Address

In his first State of the Nation Address (SONA) held at the Batasang Pambansa Complex in Quezon City last July 25, 2022, President Ferdinand “Bongbong” Marcos, Jr. launched a broad list of populist initiatives as his administration’s top priority for the upcoming year and his six-year program.

Marcos asked Congress to enact 19 important laws during his more than hour-long speech to lawmakers, previous presidents, the Cabinet, and diplomats.

On the Economy

• Marcos will implement sound fiscal management and tax administration reforms to boost tax revenue collection.
• He expressed that priorities for expenditure will be rearranged, and spending effectiveness will be increased, both to remedy the COVID-19-related economic damage right away and to get ready for any shocks in the future.
• He also wanted to encourage investments that increase productivity.
• He wanted to utilize the following: the Corporate Recovery and Tax Incentives for Enterprises or CREATE Law and the economic liberalization legislation like the Public Service Act and the Foreign Investments Act.
• The establishment of strategic industries, such as those involved in high-tech manufacturing, health and medical care, and all developing technologies, will have the full support of ecozones.
• A value-added tax (VAT) will be imposed on digital service providers as part of the tax system’s adjustment to keep up with the rapidly evolving digital economy.
  • Around Php 11.7 billion in initial revenue will be affected in 2023 alone.
  • Procedures for tax compliance will be streamlined to encourage tax payment simplicity.
• Marcos said that it is important to pursue measures to determine possible undervaluation and/or trade misinvoicing of imported goods.
• He added that the Bureau of Customs will promote streamlined processes through information and communications technology..
• To ensure the ongoing implementation of important programs, expenditures for 2022 and 2023 would be kept at levels above 20 percent of gross domestic product (GDP), or Php 4.955 trillion and Php 5.086 trillion, respectively.
• When preparing the annual budget and carrying out related appropriation activities, the Medium-Term Fiscal Strategy (MTFF) will serve as an anchor for the annual spending and financing plan of the National Government and Congress. Therefore, it is a document that looks ahead, extending beyond the customary three-year time frame to six (6) years, which coincides with the Philippine Development Plan’s (PDP)  six-year coverage period from 2023 to 2028.
  • The MTFF also encourages openness and a convincing commitment to work toward the stated socio-macroeconomic objectives that maximize public spending.
  • He has given the National Economic and Development Authority (NEDA) the go-ahead to collaborate with other agencies on the Philippine Development Plan for 2023 to 2028 and finalize the plan and track the implementation’s progress before the end of the year.
• He reiterated that the strong first quarter 2022 GDP growth of 8.3 percent demonstrates that the economic growth momentum is still strong. However, he mentioned that despite increased uncertainty in the global economic landscape, the recovery process from the pandemic’s effects is still ongoing. These difficulties and the most current economic changes are taken into account when the macroeconomic assumptions are revised.
  • With the reopening of the economy and taking into account the most recent external developments, the GDP is predicted to grow by 6.5 to 7.5 percent this year.
  • It is anticipated that this robust economic growth will continue and increase to 6.5 to 8 percent between 2023 and 2028.

On Agriculture and Food Supply

• Marcos said that in order to support consumers to maintain their purchasing power, the Department of Agriculture has finalized the plan to increase production in the next planting season, through financial and technical assistance.
  • He said that the government will provide loans, while bringing less expensive farm inputs closer to the agricultural sector that the government will buy in bulk.
  • This includes fertilizer, pesticides, seedlings, feeds, fuel subsidy and aid for eligible beneficiaries.
  • For a long-term solution, he expressed that the government will increase the production of goods and agricultural products. And to do this, they will strengthen the so-called value chain that starts from the farmers to the consumers.
• He added that the Department of Agriculture will closely guide the research for innovative methods of farming and animal husbandry.
• The production of farm inputs or what farmers will need to grow their farm will be adjusted to the challenges brought by climate change and global warming.
• Loans and financial assistance to farmers and fishermen will be an institution and policy of his administration.
• The government will prioritize the modernization of farms through innovative technologies for the farmers. Marcos will expand fisheries, pigs and poultry. He added that science will be used to increase agricultural production.
• Marcos added that they will create a national network of farm-to-market roads so that farmers can travel their products to markets faster. And they will work out ways for consumers to feel the easing of the price of affordable food products, such as the revival of Kadiwa Centers.
• On agrarian reform, Marcos said that he is going to release an executive order that will put a one-year hold on paying interest and amortization on land. This moratorium will enable farmers to focus their efforts on expanding their operations, increasing the amount of food they can produce, and fostering the economy’s expansion.
  • The beneficiaries of the agrarian reform must be freed from the burden of the agrarian reform debt, which will need Congress to change Republic Act 6657’s Section 26.
  • Amortization and interest on loans granted to agrarian reform beneficiaries that are unpaid shall be condoned under this law.
  • Beneficiaries of agrarian reform who have not yet received the land they were allocated under the comprehensive agrarian reform program will do so without having to make any payments toward amortization.
  • According to Executive Order No. 75, Series of 2019, all government agencies, bureaus, departments, and instrumentalities must give eligible agrarian reform beneficiaries access to agricultural lands.
  • Graduates with degrees in agriculture who are landless will be provided access to the agricultural lands purchased under this initiative.

On Tourism

• Marcos said that they will prioritize making fundamental improvements, such as repaving roads to make it simpler to reach tourist attractions. To help relieve the backlog at the Manila Airport, they will also renovate the airports and build more international airports.
• He added that the Department of Tourism and the Department of Public Works and Highways (DPWH) will make it easier for visitors to travel across the nation, even to isolated locations.
• He said that the Department of Social Welfare and Development (DSWD) is in charge of formalizing a creative sector that advances the objectives of its constituents.

On Natural Calamities

• Marcos ordered the DSWD to respond quickly to the needs of victims of calamities and other crises.
  • Their field offices have been instructed to early drop off family food packs and non-food essentials in the local government units (LGUs), before any disaster strikes.
  • Marcos said to add operations centers, warehouses and storage of relief goods, especially in remote areas that are difficult to reach.
• He said that he will ensure that the DSWD and the Department of Human Settlements and Urban Development coordinate properly so that the implementation of the Emergency Shelter Assistance program for victims of any calamity is easier.
• Marcos added that he will further strengthen the comprehensive program ‘Assistance to Individuals in Crisis Situations’ (AICS), so that help can be delivered to more victims.
• He added that it is important to strengthen the capacity to be resilient to natural disasters. Investment in research and technology is essential to have timely disaster alarms and accurate weather forecasts.

On Parents and Children

• In terms of the Pantawid Pamilyang Pilipino Program (4Ps), he said that the list must be cleaned and organized.
  • He has ordered the DSWD to extend the review of the list to focus on giving adequate aid to the most needy families.
• The supplemental feeding program for children in Child Development Centers and Supervised Neighborhood Play will continue, and will further expand in the year 2023.
• Marcos said that they will strengthen the Violence Against Women and Their Children program, including counseling for victims, in partnership with the LGUs.
• He added that to make sure that there are enough funds for the nearly seventy residential care centers and seven non-residential care centers for the vulnerable sectors and persons with disabilities who take shelter here.

On Health

• Marcos said no lockdowns will be implemented.
  • Alert Level 1 will still remain.
• He expressed that they will adapt health protocols to what the needs are over time and further increase cooperation with the private sector to increase the confidence of investors, so that the economy and the country can return to “full capacity” especially for businesses.
• Marcos will establish the Center for Disease Control and Prevention and one vaccine institute. This also includes more hospitals and health centers.
• Beyond the problems the pandemic has caused, a stronger healthcare system is obviously needed. Instead of waiting for people to come to the hospitals and healthcare facilities, the government must bring medical services to them.
  • It is clear that this type of hospitals should be added not only here in the National Capital Region but also in other parts of the country.
• In addition, Marcos said to bring the health care system closer to the people without them having to go to the center of their town, province or region, The government will put up clinics, RHUs where doctors, nurses, midwives, med techs go, once or twice a week – so that it will be easier for the sick to get treatment without having to travel far.
• He also said he shall make every effort to improve the welfare of physicians, nurses, and other front-line healthcare providers.
• He added that they must also have an adequate supply of medicine that the citizens need on a daily basis.
  • He has started talking to drug companies here in the Philippines and abroad. He has encouraged them to open up the market so that the price of the drug can come down.
  • The Department of Trade and Industry (DTI) has already started talking with manufacturers of generic drugs.
  • He is ordering the Philippine Competition Commission to be equal and there should be no cartel among the pharmaceutical companies.

On Education

• Marcos said that classes will return to full face-to-face.
• He has ordered the Department of Health (DOH) and the Department of Interior and Local Government (DILG) to roll-out another series of booster shots for the safety of the children.
• Working with the DPWH, he must solve the situation with regard to the condition and accessibility of school spaces for the children.
• He will give careful review on the K to 12 system.
• Longer term, in order to keep up with the rapid advancement of technology, particularly in this post-pandemic environment, he noted that the government is implementing a program of refresher courses and re-trainings for the teachers.
• It is necessary to digitize the vast amounts of records kept in government warehouses and archives. Those that are already included in different data inventories should be standardized and disseminated between departments and organizations.
  • These need to be stored in sizable, secure, but easily accessible data centers.
• By the end of 2022, Marcos said that he wants to issue 20 million digital IDs and 30 million physical IDs. By the middle of 2023, it is intended to have issued 92 million IDs.

On Technology and the Internet

• Marcos said that he has consequently given the Department of Information Communications Technology (DICT) the job of establishing digital connectivity throughout all of the islands. The National Broadband Plan, the Common Tower Program, and the “BroadBand ng Masa” initiative will be used to connect the Geographically Isolated and Disadvantaged Areas (GIDA) in order to achieve this.
• Use should be made of all appropriate digital transportation methods. These could be achieved through a combination of satellite, wireless, terrestrial or underwater fiber optics, or all three.

On Infrastructure

• Marcos said that the Duterte administration’s infrastructure program must be maintained and, whenever possible, enhanced – here in Metro Manila and in other regions.
• Spending on infrastructure improvement will remain between 5 percent and 6 percent of GDP.
• Marcos said when the private sector is involved in the creation of programs, the planned expansion of infrastructure projects would be feasible.
• He plans to update outdated railway systems. He also promised to complete the following during his administration: the North-South Commuter Railway System, the 33-kilometer Metro Manila Subway Project, the 147-kilometer North-South Commuter Railway System, the 12-kilometer LRT-1 Cavite Extension, the 23-kilometer MRT-7, and the Common Station that will link LRT-1, MRT-3, and MRT-7.
  • Beyond NCR, more extensive rail networks like the 102-kilometer Mindanao Railway Project, the Panay Railway Project, and the Cebu Railway System will be integrated as an essential component of the transportation and communications systems.

On Energy

• The rate of energy generation must rise. He said to consider every alternative that might be suitable for the circumstances in the Philippines. Marcos added that it is important to construct new power plants. The best technology currently in use must be utilized, particularly in the field of renewable energy.
• Marcos said that windmill power has begun. He is now looking at the expansion of solar power production.
• In order to encourage investment, Marcos said to clarify the murky upstream gas policy, notably in the region near Malampaya. The procedures must be made clearer, and the service contracts policy must be reviewed.
• He will also look at the establishment of more nuclear power plants in the Philippines.
• Public-Private Partnerships (PPPs) will play a role in securing more funding.
• While considering plans to enhance the performance of electrical cooperatives, Marcos said to expand the network of transmission lines. All of this helps to lower energy costs, not just for households but for businesses as well.

On Environment

• Marcos said that he will also investigate the nation’s hazardous fresh water supply issue, particularly in urban regions. The water supply systems need to be repaired and upgraded because many of them were built in the 1950s.
  • To address this critical situation, he has given the Department of Environment and Natural Resources (DENR) and the DPWH instructions to look into potential partnerships with the private sector.
• He said that it is important to strengthen and enforce environmental laws. This is done through the careful coordination between private stakeholders and government agencies.

On Overseas Filipino Workers

• In addition to issuing safe Overseas Employment Certifications (OEC) that one can save on the smartphone, Marcos mentioned that they will automate the verification of contracts. He has requested that the DICT and the Department of Migrant Workers (DMW) give the issue their top priority.
• He has called on the Department of Foreign Affairs (DFA) to cooperate with the Department of Migrant Workers to ensure that all diplomatic posts will help to immediately put back to work the Overseas Filipino Workers (OFWs) who have lost their jobs in the past few years.
• From three months, Marcos said to make it to just three weeks for a foreign employer to process the papers of the Filipino he wants to hire as an employee.
• Marcos also said that they will instruct the department to simplify the complex handbook of rules and regulations for OFWs, so that transactions related to their emigration will be smooth.
  • From the handbook with 240 sections, he said that this will be transformed into a pamphlet of no more than 100 pages.
• He added that for the countrymen who are stuck in chaos, abused, and whose lives are in danger, Marcos said that he will launch the One Repatriation Command Center or ORCC.
  • He expressed that they will dedicate a social media platform of the DMW and the hotline to help immediately and save them from further harm.
• He mentioned that he is currently in contact with the government of Saudi Arabia to reopen the deployment.
  • In the next few months, DMW Secretary Susan Ople will be going to Saudi Arabia to make sure that there is enough force to ensure that employment can be reopened in the country, and to advance the campaign against human trafficking.
• The DMW, through the Overseas Workers Welfare Administration (OWWA), will ensure that the children of OFWs are admitted to good schools that will teach them financial literacy, mental wellness, sports, arts and culture. This will happen with the collaboration of different government agencies.

On Foreign Policy

• Marcos said that he won’t be in charge of any procedure that cedes even a single square inch of Philippine territory to a foreign force.
  • According to him, “the Philippines shall continue to be a friend to all, an enemy to none.”

Proposal of Legislation

Marcos also urged Congress to pass these 19 laws. 

1. National Government Rightsizing Program (NGRP). A reform strategy that aims to improve the institutional capability of the government to carry out its duties and deliver better services while ensuring the best possible use of available funds.

2. Budget Modernization Bill. By guaranteeing that every peso the government budgets will actually result in the delivery of programs and projects, this aims to institutionalize the Cash-based Budgeting System (CBS) under Executive Order No. 91, Series 2019. This will strengthen fiscal discipline in the allocation and use of budget resources. As the government implements emergency and recovery strategies following the pandemic, the full implementation of the CBS is essential and timely.

3. Tax Package 3: Valuation Reform Bill. This bill calls for the establishment of national real estate values and valuation standards as well as the creation of a real estate information system that would serve as a database for all national real estate transactions and declarations.

4. Passive Income and Financial Intermediary Taxation Act (PIFITA). By reforming the taxation of the financial industry into a simpler, fairer, more effective, and revenue-neutral tax system, this aims to reform the taxation of capital income and financial services. Additionally, it stands for implementing a competitive tax structure for the region.

5. E-Government Act. The establishment of the E-Government Master Plan, which will include all e-government services and procedures, is made possible by this provision.

6. Internet Transaction Act or E-Commerce Law. In order to protect consumer rights and data privacy, promote innovation, encourage fair advertising practices and healthy competition, secure online transactions, uphold product standards and safety, and create an effective regulatory framework for commercial activities conducted over the internet or through other electronic means.

7. Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE). Through programs and initiatives to be implemented by the Land Bank of the Philippines, the Development Bank of the Philippines, and the Philippine Guarantee Corporation for the purposes of addressing liquidity or solvency problems of Micro, Small, and Medium Enterprises (MSMEs) and strategically important industries, to encourage their continued operation and maintain employment, this seeks to provide financial assistance to distressed enterprises critical to economic recovery.

8. The establishment of a Medical Reserve Corps (MRC). The MRC will be made up of licensed physicians, graduates of medical schools, medical students who have finished their four-year courses, registered nurses, and licensed allied health professionals.

9. National Disease Prevention Management Authority. This bill seeks to create the Center for Disease Prevention and Control (CDC), attached to the DOH.

10. Creation of the Virology Institute of the Philippines. The Department of Science and Technology (DOST) will create an associated agency called the Virology Science and Technology Institute of the Philippines (VIP). The Virology Institute of the Philippines will now receive all DOST offices and units with virology-related duties.

11. Department of Water Resources. By using Integrated Water Resource Management (IWRM) as the strategic framework for national water management, policymaking, and planning, this aims to establish the Department of Water Resources.

12. Unified System of Separation, Retirement and Pension. In place of the disability benefits offered by current law, this pays military and uniformed personnel (MUPs) who have retired due to a disability a monthly disability pension.

13. E-Governance Act. It encourages the use of the internet, intranets, and other ICT to offer residents opportunities.

14. National Land Use Act. This will allow for the rational and comprehensive management and development of the nation’s land and water resources, hold landowners responsible for turning their properties into productive, long-lasting assets, and strengthen local government’s ability to maintain ecological balance within its purview. In order to establish the policies and guidelines needed to put this legislative act into effect, it also includes a provision for land use and physical planning/framework.

15. National Defense Act. To make the Armed Forces of the Philippines (AFP) more responsive to present and potential non-conventional security challenges to the nation’s territorial integrity and national sovereignty, this bill proposes to update the obsolete National Defense Act of 1935.

16. Mandatory Reserve Officers’ Training Corps (ROTC) and National Service Training Program (NSTP). The ROTC program would be reinstated as a required element of senior high school curricula (Grades 11 and 12) in all public and private institutions of higher learning. The students are to be inspired, organized, trained, and mobilized for national defense readiness, including capacity building for risk-related scenarios and catastrophe preparedness.

17. Enactment of an Enabling Law for the Natural Gas Industry. By diversifying the nation’s main energy sources and advancing the use of natural gas as a supplemental fuel to variable renewable energy, this initiative aims to promote the growth of the midstream natural gas industry and increase the security of the Philippine energy supply.

18. Amendments to the Electric Power Industry Reform Act or EPIRA (Rep. Act No. 9136). With regard to the high cost of electricity, claimed market collusion, and insufficient power supply, this attempts to improve the implementation of the law’s provisions and increase its efficacy. The law aims to restructure the Energy Regulation Commission (ERC) to encourage accountability and enhance the commission’s governance framework, which would assure consumer protection and help the energy market operate more competitively.

19. Amendments to the Build-Operate-Transfer (BOT) Law. This aims to enhance the Public Private Partnership (PPP) Program’s implementation and enable the country’s strategic development goals to guide the intended outputs and outcomes.

In closing, President Ferdinand “Bongbong” Marcos, Jr. stressed that there is sunlight filtering through these dark times in history. “We have assembled the best Filipino minds to help navigate us through this time of global crisis that we are now facing,” he said. “We will endure. Let our Filipino spirit ever remain undimmed.”