Restoring confidence
It has been just over a week since President Marcos announced major changes in his Cabinet, and newly installed Finance Secretary Frederick Go is not wasting any time, eager to make an immediate impact as the Marcos administration navigates the last three years in its term amid a political turmoil.
Following the public auction of P103 million worth of luxury vehicles from pilloried contractor couple Pacifico “Curlee” Felizario Discaya II and Cezarah Rowena “Sarah” Discaya last week, for example, Go declared war versus tax evaders and smugglers who deprive the government of needed revenues to bankroll its plans and programs at the expense of the long suffering Filipino public.
“May this serve as a warning to all. The Department of Finance (DOF) will not tolerate any form of tax evasion, smuggling, or corruption that deprives people of vital revenues to support national development,” Go said, as the Marcos administration continues to grapple with a widening and deepening corruption scandal that has reached all the way up to Malacañang.
Go said the money raised from the auction of just some of the seized assets of the Discayas, who are right in the middle of the flood control projects corruption probe, would be “returned to their rightful owners—the Filipino people.”
Warmly welcomed
“They deserve a government that protects what is theirs and upholds trust. This is part of our commitment to uphold transparency and accountability, safeguarding the economic interests of the country,” he said.
Go doubled down on that commitment to transparency when he ordered the immediate suspension of all Bureau of Internal Revenue (BIR) field audits, including the issuance of letters of authority and mission orders on mounting concerns that these are being used to shake down hapless individuals and businesses.
“We hear the people. We hear your concerns and we are immediately acting on them. The people deserve better,” said Go, the former special assistant to the President for investment and economic affairs who replaced Finance Secretary Ralph Recto. Recto, in turn, was appointed executive secretary following the resignation of Lucas Bersamin.
Bersamin and Budget Secretary Amenah Pangandaman both resigned after being implicated in the flood control corruption.
Go, who vowed to take on his new post with a “deep sense of responsibility,” was warmly welcomed last Monday by the DOF family and his appointment was seen as a signal to focus on the economy amid the political uncertainties. The Federation of Philippine Industries, which groups some of the country’s largest manufacturers, underscored that the transitions that include the resignation of Pangandaman and the changing of the guard at the BIR “come at a crucial time for policy coherence, fiscal stability, and investor confidence.”
Mixed emotions
Investor confidence has indeed been taking a beating, especially as more officials are being dragged into the widening corruption scandal. The Office and the Ombudsman as well as the Independent Commission on Infrastructure continue to pursue cases with “big fish” expected to be charged and arrested by Christmas to add to the “small fry” brought into custody just this week.
Not surprisingly, the Filipino public look at the probe with mixed emotions. Some dismiss the proceedings as just for show that will not result in anything while others, especially those in the private sector, are adopting a more optimistic stance and are willing to give the proceedings a chance.
As the probe drags on, for example, capital flows and government spending on vital infrastructure projects have slowed down, causing the third quarter economic growth number to decelerate to a four-year low of just 4.1 percent, well below consensus forecasts.
Battered confidence
That anemic growth number in the third quarter then prompted a host of international fund managers and multilateral agencies to slash their economic growth projections for the Philippines for 2025 and 2026 to below 5 percent, far short of the government’s already downgraded growth target this year of 5.5 to 6.5 percent.
S&P Global Ratings, for instance, cut its target this year to 4.8 percent from the earlier forecast of 5.6 percent, explaining that the public protests stemming from the investigations into the questionable public works had slowed capital inflows, a sign of deteriorating investor and even consumer confidence. Pantheon Macroeconomics, on the other hand, further reduced its 2025 growth forecast for the Philippines to 4.9 percent from 5.3 percent, due to the “ugly” performance of the economy in the third quarter.
As leader of the Marcos administration’s economic team, Go must demonstrate to the worried populace that his fighting words will be matched with just as firm action that will go a long way in shoring up the battered confidence of both consumers and investors that are threatening to keep economic growth running below potential.
Otherwise, Filipinos will be left with just a new face as head of the DOF, with the powerful agency yielding painfully similar results.
