Author: Sandra Seno-Alday, University of Sydney
In June 2022, the Philippines will sweep the Marcos family back into power after they were unceremoniously ousted 36 years ago. Marcos Junior ran for president with a message of unity. But social media chatter in the lead up to the election reflected a desire not for unity but for a return to the ‘golden age’ of the Marcos Senior presidency.
The golden age of martial law under Marcos Senior has been debunked as a tale of political alchemy. Volatile inflation, poverty, economic recession and high rates of financial crime and human rights abuses have been spun into a shiny ‘good old days’ narrative.
As the country stands on the threshold of a second period of Marcos leadership, it is worth reflecting on the macroeconomic record — economic growth, perceived riskiness and investor confidence — of previous Filipino presidents. It is also time to ask what Marcos Junior may face in the years ahead when delivering the implicit promise of a golden economic era.
Marcos Senior was elected in 1965 and imposed martial law in 1972. United Nations economic data from 1970 suggests there was economic volatility in the early years of martial rule. This was followed by gradual economic decline until the country finally sank into a deep two-year recession in which the economy contracted by 7 per cent in 1984 and again in 1985.
The Philippine economy grew at a compound annual growth rate (CAGR) of 3 per cent from 1970 to 1986. This was significantly slower than the 6 per cent growth experienced by the ASEAN region. Capital formation grew at a CAGR of 1 per cent in the same period, a clear indicator of low investor confidence due to perceived high economic risk.
The expulsion of Marcos through popular revolt in 1986 encouraged optimism in the country. Under the leadership of Corazon Aquino (1986–92) investor confidence soared as risk perception decreased. Capital formation exhibited a strong CAGR of 8 per cent. The government steered the country out of the martial law recession and boosted economic growth.
But despite robust investor optimism the economy faltered in the later years of the Aquino presidency, eventually grounding to zero growth from 1991 to 1992. Over her six-year term, the economy grew at a CAGR of 3 per cent, well behind the ASEAN CAGR of 7 per cent.
Fidel Ramos, president from 1992 to 1998, successfully pulled the country’s economy out of stagnation. Despite disappointing economic performance towards the end of the Aquino government, investor confidence remained high. Capital formation under Ramos’ leadership grew at a strong CAGR of 7 per cent. The economy also grew at a CAGR of 4 per cent but continued to lag behind the average ASEAN CAGR of 6 per cent.
Despite inheriting a strong economy, the brief presidency of Joseph Estrada (1998–2001) was marked by an abrupt loss of investor confidence. The perception of increased risk — exacerbated by the Asian Financial Crisis — was reflected in the rapid contraction of capital formation at a CAGR of 4 per cent in just three years. In this post-crisis period, the Philippine economy grew at a CAGR of 2.6 per cent, slower than the ASEAN economy’s CAGR of 3.2 per cent. Estrada was eventually ousted the same way as Marcos Senior.
The subsequent nine-year leadership of Gloria Macapagal-Arroyo (2001–10) began with upward economic growth in the early years followed by a period of volatility before declining from 2008 onwards. Capital formation CAGR was at 3 per cent while the economy grew at a CAGR of 4 per cent, again behind ASEAN’s CAGR of 5 per cent.
Benigno Aquino III’s administration (2010–16) reversed this decline. Investor confidence was remarkably strong, with capital formation CAGR at 7 per cent. The economy grew at a CAGR of 5 per cent, outpacing ASEAN’s 4 per cent.
Rodrigo Duterte (2016–22) enjoyed strong growth in the first few years, but the country was soon thrust into a deep recession in the wake of COVID-19. The Philippines experienced one of the deepest economic recessions in the ASEAN region, contracting by 10 per cent in 2020.
Under Duterte’s leadership, the country’s economic CAGR of 1.8 per cent lagged slightly behind ASEAN’s 2 per cent. Investor confidence plummeted yet again, with capital formation contracting at a CAGR of 3 per cent.
In terms of capital growth, perceived riskiness, and economic growth relative to ASEAN, Benigno Aquino III appears to have the best overall macroeconomic legacy. Investor confidence was among the highest since 1970 and it was solely during his presidency that the Philippine economy grew faster than ASEAN’s. If Filipinos must point to a golden economic age, this would be it.
Looking ahead, Marcos Junior faces jittery investors and a vulnerable economy reeling from the shock of the pandemic. Economic fragility coupled with the Marcos family’s ongoing criminal and civil cases signal a rough road for a country keen to restore its global legitimacy.
Only time will tell whether Marcos Junior can deliver on the promise of a golden era or if he will spin yet another tale of political alchemy.
Sandra Seno-Alday is a senior lecturer in International Business at the University of Sydney Business School.
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