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INTRODUCTION
ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, where we bring you expert insights and regional perspectives on Southeast Asia and Indo Pacific geopolitics and geoeconomics. I'm your host, Dr. Prashanth Parameswaran. If you haven't already, do subscribe to the ASEAN Wonk platform at www.aseanwonk.com so you don't miss all our posts.
Our guest today is Professor Dindo Manhit, who has been founder and managing director of the Stratbase Group in the Philippines since 2004 and previously held various roles across government, academia, and civil society across several decades. We start our conversation talking about the current state of Philippine politics and several geoeconomic and geopolitical developments in 2025 ahead of upcoming midterm elections in the country. Make sure you watch, listen, or read the full episode as we go through a range of other subjects, including future scenarios to watch on the South China Sea, as well as geoeconomic sectors such as critical minerals and semiconductors.
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ASSESSING THE MARCOS ADMINISTRATION’S FOREIGN AND ECONOMIC POLICY APPROACH
ASEAN Wonk: So welcome to the ASEAN Wonk Podcast, Dindo, thank you for joining us. Let's get started with our conversation. And while there's understandably a lot of focus on the Philippines with respect to 2025, I wanted to start first by getting your views on how we might evaluate the status of the Marcos administration thus far in its single six-year term in office. So there have been some successes, including building a more global alignment network in spite of tensions with China and the South China Sea. There have also been some challenges as well. And some of the polls, including ones Stratbase has commissioned, have shown issues such as on inflation and cost of living, not unlike some of the other countries in Southeast Asia. As someone who's been helping shape policy in the Philippines for decades, how would you grade the Marcos administration's foreign and economic policy approach thus far? And you can use a scale of one to ten or alphabet letters and so on and so forth. How do we go about thinking about this question about how to grade the Marcos administration?
Professor Dindo Manhit: I think Dr. Prashanth, when you look at the Marcos administration, two and a half years into office, we have seen them really consolidate support in the broader population, broader sectors of Philippine society. Of course, what remains challenging is really the reality of economics. Basic economics in the Philippines is really the high cost of living. And of course, with it comes challenges in terms of securing livelihood, better incomes. So the challenge of unemployment and underemployment. And it adds to the poverty of people. But beyond that, you see our own government – and this is unique, I have not seen this really – the broad support for the alliance or partnership or the engagement that the Marcos administration has really brought two years and a half into office. And hopefully, this kind of engagement goes beyond security or traditional national security engagement, but it creates opportunities for investment that can help really in terms of economic security of the Philippines.
Because at the end of the day, we are an economy that continues to grow because of our young population. Consumption continues to expand and this is driven by strong remittances from overseas Filipino workers around the world. Also, strong growth in what we call the service sector. But what we are lacking is more investment in the manufacturing sector. We are not looking for big manufacturing, but if we can be part of the so-called supply chain, bigger part of the supply chain, especially as we see the globalization of the world economy. You know, when we hear from future cabinet appointments of President Trump, they speak of friendshoring. I hope they realize that in ASEAN, we are the real friend. We share like-minded values. So when we see investments going to Vietnam and other countries, we tend to ask ourselves: are we simply important because of strategic location? But maybe strategic location translates into economic opportunities for a broader growth trajectory, which is investment-led, which is job-generating, which allows our people to get better livelihood, to improve their lot, and consume more. So it becomes a cycle for that kind of challenge. But I think we are on the right track.
“[T]hey speak of friendshoring. I hope they realize that in ASEAN, we are the real friend.”
There is a lot of political noise. The international community has heard of that. But I consider it political noise because for me, I consider the Dutertes – based on my own data, the family of the former president – as a spent force in the Philippines. This is a story of how in politics, no matter how you keep things from happening or coming out, the institutions tend to work for good governance and these are basically audit reports that they cannot answer to. So they're deflecting it as if these are all politically motivated. Maybe the politics is there as it was. But all this data and reports are really traditional institutional ways in the in the Philippine society to make government officials accountable for their actions. So this noise is a deflection on the positive direction the country is moving towards to, especially as we engage other countries, as we become more open to private sector investors in the Philippines.
PHILIPPINES GEOECONOMIC TRAJECTORY: RHETORIC VS. REALITY
ASEAN Wonk: Right. So, Dindo, I wanted to ask: you kind of referenced it there already, which is that the Philippine economy is gaining attention as kind of a big geoeconomic story, I would say, within Southeast Asia under the Marcos administration. And this is beyond the sort of geopolitical focus on the South China Sea. I mean, I was looking through the latest Asian Development Bank outlook that just came out for 2025. And the Philippines, again, is the second fastest-growing economy in Southeast Asia after Vietnam at a projected rate of 6.2 percent. And the Marcos administration has noted that, if this continues, the Philippines is on track to essentially become a trillion-dollar economy by the early 2030s. Under Marcos Senior – under Ferdinand Marcos – the question was can the Philippines shed its reputation as sort of the sick man of Asia at that time. But under Marcos Jr., do you sense that the country is on a pathway to becoming really a key regional geoeconomic player in its own right? Because these are some really fascinating numbers. But as you know, we’ve been through many cycles of kind of hope and optimism about the Philippines. I'm interested in your views as to how sustainable do you think this trajectory is that the Philippines is on.
Professor Dindo Manhit: When you look at these numbers, Prashanth, something to think about also. I would say that in spite of government, we are hitting those numbers. So imagine we are on that pathway a decade and a half ago under the Aquino administration. We had some challenges during the Duterte administration. Of course, the COVID, the last three years of COVID 2020 to 2022 really became challenging for the Philippines. But what remained strong was because of our population that remains our key strength and a very young population that consumes, at a median age of 25, imagine if we build beyond the service sector, then we can sustain it further. The data that you quoted earlier is actually coming from a Standard and Poor's projection that by 2033, we'll be among the top twenty biggest economies in the world. We're number thirty-three now. The problem in the Philippines is we don't like to talk about these things because we don't even read those reports. We tend to talk about how we have failed, how Vietnam is up there.
But we're up there. Our economy is still bigger than Vietnam. And we can find ways also to build on our strength, which is our service sector, build more on the manufacturing side. As I said earlier, light manufacturing, industrial manufacturing. A little growth there can sustain it further. Because I came across a study, and I was invited to the briefing by HSBC, the Hong Kong Shanghai Banking Corporation, talking about how we will be the top 15 by the latter part of the 2040s if we follow this trajectory without, again, even interventions from government. That means without what I was talking about investment net growth. So the pathway is good. And I think our economy is resilient enough that government changes, but our economic policy doesn't change.
And we saw that with Duterte. We got frustrated with him in terms of position, in terms of West Philippine Sea issues, in terms of democratic challenges during his time. But the economic team that he brought together was able to maintain a trajectory moving forward. Maybe we could have grown more if it was not Duterte. But with Marcos, that's why also Marcos gets this chance of really growing forward because he learned from the missteps of the Duterte administration and became, you'd say – more coming from a family that is known for its dictatorship – an investor friendly, private sector friendly administration. And with that also, side by side with this engagement at the security front. So that makes our economy stronger and repositions us geoeconomically, hopefully. I use the word as countries that share our values: derisk, diversify. And I'm looking forward for the globalization. Because I think in the global world, we will see countries like us: the US, its allies, its partners, EU. We can really be their partner in Asia. Because the Philippines is the only country that is not tied up to China in terms of our economic direction and growth.
LESSONS FROM THE DUTERTE ERA AND US-CHINA ALIGNMENT SHIFT CHALLENGES
ASEAN Wonk: Right. So I wanted to ask a follow-up question. You mentioned a couple of times already the Duterte administration and what that experience was like for the Philippines because you yourself went through that period. The Duterte period in the Philippines and its alignment between the United States and China is a really interesting case study more broadly with respect to Southeast Asia. Because you saw the Duterte administration – and President Duterte himself who had personal views with respect to the United States relative to China – try to move the Philippines closer towards China. But you did see a reaction from the private sector, from society at large, because the Philippines is a democracy. I’m including the military. Which is to say, look, we understand where our national interests lie. We know where our long-term alignments are. And so we saw President Duterte try to shift the Philippines with respect to China, but he didn't really get as much as he thought he would. So could you maybe relate what was the experience like with President Duterte? For me, looking at this objectively from a regional Southeast Asia lens, it does reinforce the important point that irrespective of what leaders want to do, particularly in democracies like the Philippines, it is really important for you to bring along the other aspects of society, whether it's the private sector, the elites, the population at large. And we did see a little bit of a disconnect there between what the leader of the Philippines wanted and the rest of the country wanted. But I'll leave you to characterize that as somebody who was intimately involved in that process what those lessons are for Southeast Asia in general, not just for the Philippines.
Professor Dindo Manhit: You know, Prashanth, during that period, I'm one of those individuals that did not give up on democracy. And also the institutions of our own government, state institutions. Maybe because they're different from other pundits that tend to watch by reading the news but not really being part of the process. Me, I've lived that world. The young part of my life, lived that world again as a president of a think tank, lived that world again as I engaged in my consulting business and tried to bring investments. So I know that there were challenges at the time, but he was an elected individual president. He was a legitimate authority, and I know that we respect legitimate authority. But really, I think when we hit the midterms, I felt that there was a decline. Duterte was simply saved by COVID. But the good thing was the institutions of our state, the Philippine state, a democratic state. And I emphasize that for ASEAN because we're the oldest democracy in ASEAN, and we value it really. I knew that it would end. That means his term ends, he ends. And that's what we saw. Nobody believed me when I was saying that.
And also I know for a fact that internal to the bureaucracy – both the civilian and the military bureaucracy – they respect constitutional authority, but within their own little world, they would know what national interest is. And it even allowed my group to engage with a lot of them up to the cabinet level, to the point that in the end, six years after President Duterte, we never really moved policy. The idea of economic weakness of the country to be coerced by China never happened, to the point that Duterte in these last six months was claiming all his anti-China actions. But of course, we all know all his anti-China actions was simply driven by a pushback from society. And also his anti-China statements is because the daughter would have lost if she was perceived to be a China candidate. Because at the time [data indicated that] it was seven out of ten Filipinos will not vote for a pro-China candidate.
“[S]ix years after President Duterte, we never really moved policy. The idea of economic weakness of the country to be coerced by China never happened…”
So given that as background, it tells us a good lesson for ASEAN countries and for the world that there are democracies. If we really talk about working with countries that share our values, I hope the outside world should see us because we don't relate more with ASEAN countries. We tend to relate more with the US, Japan, Australia, EU countries, Canada, even South Korea. Because even with South Korea, we tend to look at ourselves as coming from the same roots. We fought a dictatorship. Not perfect. Our democracy is not perfect, but who is perfect? Especially when I look at the US and EU now. But we remain this way. But the best is, look at us, look at the Philippines as a democratic country, that if you understand how we work, you would understand that there is rule of law in this country. You would understand that we are a very open economy, just like our democracy is also open. That's why we push back on leaders like Duterte who is now suffering from lack of political support. That's the nature of what democracies are. And I think we will continue to be that way. And hopefully, Marcos is just again the first step. Because we thought the first step was a keynote in 2010 because we had some challenges in the previous government. That's when I became active as a think tank because I was raising issues on governance, on transparency, on accountability in the early 2000s period of our country because of illegitimate leadership. That means they cheated their way to election. But now we've addressed the electoral process. You have to accept who gets elected by the public and build from there. And that's what we are hoping in 2025 as we start a new year, as we go into the midpoint of this administration.
But how can he build on what he has started in his two and a half years into office, Marcos? Because he will have two and a half years to go because of the last six months, his election period. So we hope to build that and build it more to our friends and allies and partners who share with us that we are an important waterway, the West Philippines Sea. We are in an important strategic location. But hopefully, we can also be an important economic player into 2025. Because, again, as you have quoted, data reflects that. That is the projection. Hopefully, we break those projections in a positive way or even reach those projections. And I see that happening in the next two and a half years of this government.
2025 DATAPOINTS TO WATCH IN PHILIPPINES AND REGIONAL GEOPOLITICS AND GEOECONOMICS
ASEAN Wonk: Right. Which brings me to my next question, Dindo, which is the 2025 datapoints to watch. As I mentioned at the outset, there already is quite a lot of focus on what looks to be like a very active year for the Philippines in 2025. And we've got everything from the midterm elections in the Philippines, which you referenced, which is very interesting given the state of the Duterte-Marcos dynastic dynamics, and then you have the dynamics of the US-Philippine alliance in the South China Sea under the Trump administration, which you also mentioned earlier as well. And of course, the other component, which I think you very astutely noted, is that there is a bit of a gap, right, for those of us who watch the region very closely. There’s the sort of global alignment network that the Philippines is building. So it's not just Asia with respect to Japan, for example, or Australia, but it's also Canada, France, a number of these other countries. But the big question obviously is the gap between that global alignment network with what the Philippines is experiencing within ASEAN. Which is even though there are individual countries in Southeast Asia that look at what the Philippines is doing and say there’s at least a country that is confronting China on this count, ASEAN as an institution has been lagging in terms of some of these key flashpoints, including not just the South China Sea, but also Myanmar, for example. Some of that is due to consensus decision-making, which is not unique to the South China Sea. But what are some of these top datapoints that you're looking to ahead in 2025 to sort of look at Philippine geoeconomics and geopolitics? Because you cover both of those aspects.
Professor Dindo Manhit: When you look at ASEAN….
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