Sona 2024: A quick look at main issues

Highlights: Sona 2024

As President Ferdinand Marcos Jr. reports the state of the nation for the third time on Monday (July 22), the themes of his administration have remained the same.

Here’s a quick look at some of the major issues, the current situation, what’s been done, and what’s been promised.

WEST PHILIPPINE SEA

Asserting sovereignty

Amid increasing aggression by China, Marcos Jr. said the Philippines should go beyond just filing diplomatic protests:

* 65 (filed as of December 2022)

* 150 (filed as of June 2024)

* 20 (filed in the first six months of 2024)

Facing China

West Philippine Sea reefs have been occupied by China, and the damage is immeasurable:

• Panganiban or Mischief Reef – 995.93 hectares
• Zamora or Subi Reef – 798.44 hectares
• Kagitingan or Fiery Cross Reef – 797.63 hectares
• Calderon or Cuarteron Reef – 312.01 hectares
• Burgos or Gaven Reef – 114.12 hectares
• Scarborough Shoal- 764.45 hectares
• 7,000 hectares-coral reefs damaged by China in the South China Sea
• 3,700 hectares—coral reefs damaged by China in WPS

READ: Marcos: Philippines will not lose one inch of its territory

Chinese structures inside PH waters

To assert its disproven claim in the West Philippine Sea, China has built outposts to use as bases for military and other purposes:

• Calderon or Cuarteron Reef
• Kagitingan or Fiery Cross Reef
• Burgos or Gaven Reef
• McKennan or Hughes Reef
• Panganiban or Mischief Reef
• Zamora or Subi Reef

READ: AFP wants China to pay P60M for June 17 attack

ENERGY, NATURAL GAS

President Ferdinand Marcos Jr. has repeatedly underscored the critical role of the Malampaya gas field, the Philippines’ only source of indigenous natural gas.

Malampaya gas field

• Proven reserves: 2.7 trillion cubic feet of natural gas.
• 85 million barrels of condensate.
• Contributes 20 percent of Luzon’s electricity needs.
• Supplies gas to four power generation plants in Batangas (Sta. Rita, San Lorenzo, San Gabriel, and Avion) with a combined capacity of 2,011 megawatts (MW).
• Scheduled to produce 146 billion cubic feet of gas per year.
• In April, as the Luzon grid was placed on red and yellow alert status, gas supply from Malampaya peaked at 290 million standard cubic feet per day (MMSCFD), exceeding the Malampaya wells’ current maximum capacity of 262 MMSCFD.
• The Malampaya Consortium generated and remitted more than $13.5 billion (P749.3 billion) to the national government between 2001 and 2023.

SOURCE: DEPARTMENT OF ENERGY

READ: Malampaya contribution to gov’t revenue: $13B

Extended for 15 more years

Marcos’ thrust for energy security was followed by:

• In May 2023, Marcos Jr. signed the renewal of Service Contract 38, extending the Malampaya gas field’s operation until February 22, 2039.
• The extension of SC 38 for full production of the Malampaya field through its remaining gas reserves of about 147 billion cubic feet.
• The contract requires a minimum work program of geological and geophysical studies and drilling of at least two deep water wells during Sub-Phase 1 from 2024 to 2029.
• DOE said the extension would jump-start the exploration and development of other fields in the area believed to hold up to 210 billion cubic feet more of natural gas.

SOURCES: DOE, INQUIRER.NET ARCHIVE

READ: 15 more years: Bongbong Marcos signs Malampaya renewal deal

What’s next?

• A $600 million (around P33.7 billion) worth of investments was committed by the Malampaya Consortium — led by Enrique Razon’s Prime Energy.
• A $69.9 million (P3.88 billion) contract was awarded to the American offshore drilling company Noble.
• Noble’s special ship “Noble Viking” set to drill two deepwater development wells in the Camago and Malampaya East fields and a third exploration well in Bagong Pag-Asa, located approximately 15 kilometers north of Malampaya.

SOURCES: DOE, INQUIRER.NET ARCHIVES

READ: 80% success rate predicted for new Malampaya gas wells

Challenges

• Reports noted that in recent bidding, power plants using imported LNG secured at least 2,400 MW out of 3,000 MW of power supply contracts. These plants opted for imported LNG over the more cost-effective local Malampaya gas.
• No contracts were awarded to plants using local Malampaya gas.

AGRICULTURE

Increasing productivity

Increasing agricultural output has been a consistent theme of the Marcos administration since its first days in power.

• 97.5 percent (target rice sufficiency in five years)
• 12 percent (agriculture sector growth in 2023)
• 9 percent (agriculture contribution to GDP)
• 20.8 percent (share of agriculture in employment as of May 2024)

Protecting local farmers

As President Marcos Jr grapples with the challenges of raising agricultural productivity and keeping prices in check, experts remind the administration of its duty to protect Filipino farmers.

• P24.83 per kilogram (farm gate price of palay in first quarter 2024)
• P24.63 per kilogram (farm gate price of palay in second quarter 2024)
• 15 percent (new tariff on imported rice under E0 No. 62)
• P17 to P18 per kg (projected farm gate price of palay as result of E0 No. 62)

SOURCES: PSA, DR. TEODORO MENDOZA

POVERTY ALLEVIATION

Lowering poverty rate

In his first Sona in 2022, President Marcos Jr. announced the government target of lowering the poverty rate to 9 percent in 2028:

• 16.2% (4.04 million households. Poverty rate in 1st semester 2018)
• 18% (4.74 million households. Poverty rate in 1st semester 2021)
• 16.4% (4.51 million households. Poverty rate in 2023)
• 230,000 (households out of poverty first quarter of 2023)
• 16 million families (out of poverty if a 9 percent rate is achieved)

Poverty and wages

The connection between poverty and wages is undeniable:

• 37 percent (value of average wage compared to living wage needed for a family of five)
• P1,210 (Daily living wage for a household with five members)
• P442 ( Current average nominal minimum wage)

SOURCE: IBON FOUNDATION

Feeling poor

The polling firm Social Weather Stations regularly measures perception of poverty:

• 58 percent (respondents who said they were poor in SWS polling last June)
• 59 percent (respondents who said they were poor in SWS polling in 2008)
• 16 million (self-rated poor households in June, higher than 12.9 million in March)

Government intervention

The economic team of President Marcos Jr. announced steps to keep more people from falling into the poverty pit:

• 5 million (households tagged as beneficiaries of the cash aid Pantawid Pamilyang Pilipino Program)
• P26.7 billion (budget set aside for Ayuda sa Kapos ang Kita Program or Akap, which targets poor and low-income households as beneficiaries)
• P3,000 (cash for Akap beneficiaries)
• P18.3 billion (released in 2023 to 9.2 million beneficiaries)

SOURCE: INQUIRER.NET ARCHIVES

RICE PRICES AND INFLATION

Marcos’ promise to lower the cost of rice to P20 per kilogram has remained elusive.

Prices of rice have remained above the target and have contributed to inflation:

• 3.7 percent ( inflation rate last June)
• 3.9 percent (inflation last May)
  • June 2023: 5.4%
  • July 2023: 4.7%
  • Aug. 2023: 5.3%
  • Sept. 2023: 6.1%
  • Oct. 2023: 4.9%
  • Nov. 2023: 4.1%
  • Dec. 2023: 3.9%
  • Jan. 2024: 2.8%
  • Feb. 2024: 3.4%
  • March 2024: 3.7%
  • April 2024: 3.8%
  • May 2024: 3.9%
  • June 2024: 3.7%

Inflation drivers

Food and alcoholic beverages still had the highest inflation rate at 6.1 percent.

• 22.5 percent (rice inflation last June)
• 23 percent (rice inflation last May)
• 23.9 percent (rice inflation last April)
• P48.55-P50.91 per kg (average cost of local regular and well-milled rice)
• P48.85-P53 per kg ( average cost of imported regular and well-milled rice)

What’s being done?

• P29 per kg (the price of rice now available in Kadiwa outlets for the poorest of the poor)
• EO 62 (issued by Marcos in June to bring down the cost of rice by P6-P7 per kg and lowering the tariff on imported rice to 15 percent)
• P26.6 billion (ayuda allotted in 2023 last as inflation rate hit 8.8 percent)
• EO 50 was extended in 2023, keeping modified rates on import duties for rice, corn, meat

SOURCE: INQUIRER.NET ARCHIVES

EDUCATION

President Ferdinand Marcos Jr. has pledged to transform the Philippine education system to improve global competitiveness and literacy rates. Here’s a summary of the current situation and progress.

PH students rank poorly in PISA reports

Previous reports by the Programme for International Student Assessment (PISA) reveal a troubling situation for education in the Philippines: Filipino students consistently perform poorly, falling behind their peers in other countries in reading, mathematics, science, and creative thinking.

READ: Filipino students rank poorly in Pisa 2022 report on creative thinking

READ: PH students still among lowest scorers in reading, math, science – Pisa

Most school buildings are long overdue for repairs

• 327,851 (school buildings in the Philippines)
• 104,536 (school buildings in good condition)
• 100,072 (school buildings needing minor repairs)
• 89,252 (school buildings needing major repairs)
• 21,727 (school buildings set for condemnation

Not enough classrooms

The country saw a shortage of 159,000 classrooms for the 2023-2024 school year — a huge jump from the previous year’s deficit of 91,000 classrooms.

SOURCE: DEPED

Lack of teachers

DepEd reported that 89,506 teaching positions have yet to be filled.

SOURCE: DEPED

What’s been done

• Curriculum reforms
• Infrastructure investments
• Salary increases and benefits

Promises

• Improve Philippine rankings in international assessments like PISA
• Increase budget allocation
• Strengthen digital learning

INFRASTRUCTURE

In his first Sona, President Marcos Jr. pledged to continue and expand the Build, Build, Build infrastructure program.

More infra projects underway

So far, these have been achieved or are on target:

• 3 (projects completed between 2023 and 2024 worth P21.35 billion)
• 65 (projects ongoing which are 35.14 percent of total infrastructure flagship projects)
• 30 (projects approved for implementation)
• 5 (projects pending approval).
• 36 (projects in preparation stage)
• 46 (projects in pre-project preparation)

Completion target

The National Economic and Development Authority (NEDA) noted that at least 70 of these infrastructure projects are expected to be completed by 2028, including:

• Flood risk mitigation for Cagayan de Oro River
• Samar Pacific Coastal Road
• Disaster risk and climate change adaptation in low-lying areas of Pampanga Bay.

Completed projects

From July 2022 to November 2023, the DPWH had already completed several projects:

• 7,715 kilometers of roads
• 969 bridges
• 2,410 flood control projects
• 6,439 rain water collector systems
• 389 kilometers of farm-to-market roads
• 12 kilometers of farm-to-mill roads
• 5,116 classrooms

SOURCE: DPWH

Record-high spending

Marcos Jr. has repeatedly said in previous Sona that he would pursue infrastructure development which would require high spending levels:

• 5 to 6 percent (GDP share of spending for infrastructure)
• 5 to 6 percent (Department of Budget and Management allotment from the national budget in December 2022 for Build, Better, More the Marcos administration’s updated Build Build, Build program)
• 6.3 percent (projected share in GDP of infrastructure spending by 2028)

SOURCE: DBM

Progress so far

• P1.42 trillion (infrastructure disbursements in 2023 or 5.8 percent of GDP)
• P216.8 billion (infrastructure spending and capital outlay from January to March 2024, a 10 percent increase from P196.7 billion in the same period in 2023)
• P1.47 trillion (total infrastructure spending projected in 2024 or 5.6 percent of GDP)
• EO No. 9 was issued by Marcos to simplify the process of licenses, clearances, permits, and other requirements for infrastructure projects

SOURCES: DBM, DEVELOPMENT BUDGET COORDINATING COMMITTEE

READ: Bongbong Marcos to continue Duterte’s infrastructure program

READ: Let not the ‘golden age of infrastructure’ end – Marcos

More infra promises

In previous Sona, Marcos listed infrastructure projects for completion by his administration:

• Upgrade airports and build new ones
• Promote undiscovered tourist spots.
• Continue ongoing infrastructure flagship projects.
• Railway projects
• Mega Bridge Program

SOURCE: INQUIRER.NET ARCHIVES