MAP Insights

Let me start by wishing you all a much better year in 2022 than in 2020 and 2021. Hopefully, this year will be safer, healthier, happier and more prosperous for everyone. But will it really or will it be 2020 too? Let’s address our risk map.

 

Pandemic risk

 

From the looks of it, the Omicron strain is highly infectious. It came just in time for the Christmas holidays with a world feeling liberated from the Delta strain. Omicron’s phenomenal rise took flight in the last two weeks of December. Super-spreader gatherings are causing the surge of infections overseas, such as the USA, Europe and Xian, a city of 13 million people in China.

 

Alert Level 3 was just reinstated in the NCR. How the rest of the country goes will depend on Omicron’s behavior. It could mean more restrictive measures that could further impair social interaction and commercial-industrial activity. Detection systems must be firmly in place to spot and quickly arrest mindless persons who break the rules, jump quarantine and cover up their violation of existing safety and security laws.

 

In 2020, full-year GDP contracted by 9.6%. Despite Delta’s disruptive run, the economy is expected to rebound in 2021, ending on a positive growth rate ranging from 4.9 to 5.4%. The pandemic also weakened the country’s fiscal position. Government debt-to-GDP ratio is expected to reach 52.7% in 2021 and, possibly, 54.5% in 2022; compared to 34.1% in 2019. But with Omicron’s potential for more disruption, debt-to-GDP ratio could further deteriorate.

 

From a family standpoint, restrictions on movement and face-to-face interaction poses psycho-social problems, especially for the young. Parents will have to be more creative in engaging their brood at home and getting them to have enriching online interaction with their friends. While the pandemic provided bonding opportunities for disconnected parents, it pushed our youth, whose parents weren’t able to adjust to the new normal, to retreat into their caves. That’s a big watch out for this year.

 

Political risk

 

Will this year’s electoral campaign period be virus-free and still be dominated by mass gatherings or will the pandemic continue on and force the nature of campaigning to shift online? Mass gatherings are potential super-spreader events, like what happened in the US in 2020. This is a crucial challenge for the candidates and their teams – winning hearts and minds without “pressing-the-flesh” in critical areas to sidestep the danger to their health and the public’s.

 

Another issue is overcoming unresolved inter-generational problems requiring a transformative team in place with the right values, aptitude and skills to address those, while working in parallel for their vision of a more secure and developed Philippines. Do we have a field of candidates with boundless potential for good governance and skillful statecraft to choose from? Or do we have more of the same political syndicates, traditional politicians and self-serving agendas?

 

Moreover, grizzled observers say that while winning over the voter is one thing, winning the count is another matter altogether. While the energies and money spent for mind-setting surveys, brand management, campaign staff and poll watchers are vital to win the voter, a separate budget is needed to ensure that the votes are counted. Will our political culture change for the better just in time in the next five months? And what about foreign intervention in the shadows to influence the outcome? Will it truly be in our national interest?

 

Geopolitical risk

 

These past few years, we’ve seen geopolitical alignments firming up in Europe, the Middle East and in the Indo-Pacific. In Europe, it’s Russia versus a US-led NATO. In the Middle East, it’s Iran-led Islamist countries and radical non-state actors versus a USA-Israel backed coalition of Muslim states. In the Indo-Pacific, it’s China and North Korea versus a “freedom of the seas” coalition involving the QUAD nations and ASEAN nations seeking a defense shield. Will we see this year a calibrated escalation of warrior diplomacy and saber rattling?

 

The Philippines occupies coveted strategic real estate that extends southward and westwards to Indian and ASEAN resource rich countries; farther west to Persian Gulf oil-rich countries; and eastward to Asia-Pacific markets. Our country’s a transshipment point; logistics hub; trading center and regional security sentinel in the South China Sea. It’s an archipelagic state with the potential of becoming a regional maritime power if only it had the right people in government and society.

 

The administration deserves credit for recognizing the security-development nexus. Security and development are synergistic; they’re two sides of the same coin. Building the economy requires a parallel investment in security. The AFP’s modernization buildup was backed by the national leadership, such that the ARMY, NAVY and AIR Force were given the resources to address modern threats to national security. The PNP and PCG are beneficiaries of the buildup as well.

 

The brand new assets we have on the ground, in the air and out at sea; and those in line for procurement already funded, or ready for delivery, are good indicators of the serious, steady buildup to have the capability of addressing the aftermath of natural disasters, and warfighting if it comes to that. More needs to be done, however, in terms of amending the Procurement Law, finding new sources of funding for acquisition and sustainment, and reviving the Self-Reliance Defense Program. We must be ready to defend ourselves to win the peace we want.

 

Economic risk

 

If 2022 doesn’t live up to positive expectations, it goes without saying that economic risk could easily slip into crisis mode.

 

More pandemic-led supply chain disruptions will exacerbate productivity and trading contractions that, in turn, will delay recovery. Failure of whole-of-nation collaboration to reflate the economy and find new trading partners pose additional anxieties for 2022. If the US-China rivalry heats up all the more, just remember that China, Japan and the USA are our country’s top 3 trading partners. What’s Plan B in case RCEP gets stalled or RP-China relations deteriorate?

 

That’s enough mental indigestion for now but, seriously, it’s food for serious thought and appropriate action.

 

 

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.  The author is member of the MAP, Chair of Philippine Council for Foreign Relations, Vice Chair of Pepsi-Cola Products Philippines, Inc. and sits on the boards of other companies as Independent Director. Feedback at <map@map.org.ph> and <rmalunan@gmail.com>.)