Critique: Our Thoughts, Insights, and Comments on President Aquino's 5th SONA

       As we were listening to Aquino's 5^th State of the Nation Address, we have to admit that the country is truly in good state. Every aspect of the nation seems to be progressing positively, from employment, defense, agriculture, health, education, justice, and, economically-speaking. The Philippines is slowly climbing up the ladder and is becoming globally competitive. 

       One accomplishment that PNoy's administration has been boasting is the economic standing of the country as its GDP rose to 7.9 on the 2^nd quarter of 2013. Also, the Philippines is now on the investment rate which is good and may indicate improvement however on the negative side, the inflation rate has also risen. As of June 2014, it is 4.4% while the GDP is at 5.7 % on the 1^st quarter of 2014. While it is shown that the economy is growing, the public is not benefiting from it because of the rising prices. 

    In addition, the continuous government expenditure, like public transportation and infrastructure should really be for the benefit of the masses not just for a few people. Especially now that the DAP is terminated, it may affect the economy if it will slow down the spending. Resources from DAP as well as from other sources should be properly allocated following the fundamental theorems of welfare economics; one is that every Pareto efficient resource allocation can be attained through a competitive market mechanism, with the appropriate initial redistributions. In this case, a decentralized market system is to be followed.

     Aside from the list of the President’s administration's accomplishments, the future plans and targets of the remaining years of his term were also introduced. The President expresses his further objectives in the Bangsamoro issue, he has already achieved a part of it, and he will carry on with this on his 2014 list of goals. By the power bestowed in the President, Adam Smith’s invisible hand was somehow not working in the process. 

       The future promises stated in the SONA shows the big role of the government. Starting from the infrastructure projects which will be beneficial to his “Bosses” - Filipino Citizens - and a gateway for the 2015 ASEAN Summit until the energy supply and demand in this country which is at its highest peak. Keynesian approach may help in the energy problem of the country. Energy, being part of the President’s future promises shows what Keynesian economics often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector. It is known that the energy business in the Philippines is monopolized by powerful people. Hence, the fiscal policy actions by government is needed in order to stabilize the output of energy issues over the business cycle while the monetary policy actions by the central bank would help the long run process of the 2015 National Budget. Philippines, having a mixed economy which Keynesian economics advocates, is predominantly achieved by the private sector but with a role of government intervention during recession.