Power Plays: Who Really Runs the Philippine Economy?
Why Your Wallet Hurts and What Leadership Has to Do with It
Have you ever wondered why the cost of your favorite snack seems to rise every few months or why finding a good job feels so tricky? These aren’t just random events. They are the result of decisions made by those in power, often benefiting the wealthy, corporations, and foreign investors over workers, farmers, and everyday people. The economy doesn’t operate independently; it is shaped by the choices of government leaders, from the president down to local mayors. Whether you’re aware of it or not, these decisions impact the money in your pocket, the jobs available to you, and even how much you pay for everyday goods. These aren’t just individual choices; they are shaped by larger political-economic systems, including global trade, deregulation, and national policies that determine the cost of living, job security, and opportunities for advancement.
So, how do these decisions come about? And why should you, as a voter, care about how the government is structured? Understanding how economic decisions are made can help you choose leaders who genuinely have the country’s and your economic well-being in mind.
Who Holds the Economic Power? Understanding the Philippine Government’s Role
To understand who calls the shots on economic matters, we first need to break down the structure of the Philippine government. It’s like a team of players, each with their role to play. At the top is the president, who steers the country’s economic ship. The president proposes policies and sets the overall direction for the economy, but these decisions are often shaped by technocratic institutions such as the National Economic and Development Authority (NEDA), now known as the Department of Economy, Planning, and Development (DEPDev), and the Department of Finance (DOF). These institutions, while crucial in planning, are often not directly accountable to the people and are influenced by international financial institutions like the World Bank or IMF, shaping policies that may not always align with the broader public’s interests. Congress, which includes the Senate and the House of Representatives, plays a crucial role by approving laws and deciding on the national budget.
However, the allocation of resources is not just technical—it reflects political negotiations and varying interests, often prioritizing sectors like defense over social welfare, depending on the current political climate.
On the ground level, Local Government Units (LGUs) handle the specific needs of their communities. From cities to provinces, LGUs implement programs that directly affect our daily lives. These local leaders have a lot of autonomy, but their capacity to act is often dependent on the Internal Revenue Allotment (IRA) or National Tax Allotment (NTA) from the national government, limiting their financial independence. Moreover, the implementation of programs varies due to differing capacities across LGUs—urban areas tend to have better resources than rural ones, leading to unequal access to services. Local dynasties often control these LGUs, further consolidating power in a few hands and sometimes leading to patronage politics that stymies real economic development.
Think of it this way: the president lays out the game plan, Congress divides the budget to meet the team’s needs, and LGUs bring the game plan to life in their respective areas. But these players don’t always agree on the rules, and when political priorities clash, the public bears the consequences.
Top-Down Choices: Presidents, Policies, and Profit
Different leadership styles significantly shape a nation’s economic direction. Some leaders prioritize transparency and institutional reforms, while others focus on infrastructure development and social programs. Leadership styles reveal whose interests a government is most likely to serve—whether it’s foreign investors, the local elite, or the working public.
President Benigno Aquino III (2010–2016) emphasized good governance and transparency. His administration aimed to implement stable economic policies, reduce red tape, and create a level playing field for businesses. However, critics argued that the "level playing field" mostly benefited capital rather than labor. Aquino’s policies encouraged investment but did little to improve the conditions of workers or protect wages. Aquino also launched the Public-Private Partnership (PPP) program to accelerate infrastructure development by collaborating with the private sector. While these initiatives contributed to growth, PPPs have been criticized for favoring large corporations and contributing to the privatization of public services, which often leads to a shift in resources from public to private hands, benefiting elites rather than the public.
In contrast, President Rodrigo Duterte (2016–2022) took a more assertive approach. His administration prioritized rapid infrastructure expansion through the "Build, Build, Build" program, aiming to stimulate economic growth and create jobs. However, many of these infrastructure projects were funded through foreign loans, particularly from China, raising concerns about growing debt dependency. Duterte also pursued tax reforms, such as lowering personal income tax rates and expanding the value-added tax base to boost government revenue for infrastructure and social programs. But the TRAIN law, which increased taxes on fuel and sugary products, disproportionately affected the poor, showing the regressive nature of such “progressive” reforms. These policies, while stimulating growth, also raised concerns about increasing national debt, economic dependency, and the sustainability of rapid spending.
These contrasting leadership styles underscore how presidential priorities and governance approaches directly influence a country’s economic policies and overall development trajectory. Leadership is never neutral—it reflects whose interests are being served, whether the local elite, the international business community, or the working class.
But while presidents shape national trends, it’s often in cities and municipalities where we feel the most immediate impact—good or bad.
Local Leadership and Its Real-World Impact
Local governments often get overshadowed by the national government, but they are powerful players in the economy. Thanks to the Local Government Code of 1991 (Republic Act No. 7160), LGUs have more control over their resources and can develop their own plans for growth. However, many LGUs still depend heavily on IRA/NTA from the national government to fund their programs, limiting their financial autonomy. The capacity of LGUs to implement these plans is also uneven, with wealthier urban areas typically able to execute more comprehensive initiatives compared to rural municipalities that often face resource limitations. Local dynasties control many LGUs, which can lead to entrenched power structures and political favoritism that hinder development.
One powerful example is Jesse Robredo’s leadership in Naga City. When he took office in 1988, the city was financially struggling and plagued with corruption. Robredo focused on closing the budget deficit and addressing citizens’ demands to curb illegal practices. He promoted transparency and accountability by increasing citizen participation in government functions. Over his nine-year term, Robredo not only turned around the city’s finances but also earned Naga international recognition as a model for effective, transparent, and participatory local governance. However, Robredo’s success was the exception, not the norm—his participatory model remains rare in a political system where patronage and dynasty dominate.
A contrast to Robredo’s success can be seen in some municipalities where access to resources, such as the IRA, remains limited. Rural LGUs often struggle with poor infrastructure, limited capacity, and a lack of resources, making it difficult for them to deliver effective services to their constituents. This disparity highlights the structural inequalities that exist across different regions and underscores the challenges that many local governments face in implementing economic reforms and social programs effectively.
Robredo institutionalized people’s participation mechanisms that connected economics to democratic accountability. His approach shows that local leadership can transform a community’s economy, especially when governance is people-centered. This example serves as a reminder that national leaders aren’t the only ones who can shape the economy—local leaders also play a crucial role in building economic opportunities for their constituents.
Why Political Power = Economic Power
At the end of the day, the economy is a reflection of the choices made by those in power. Whether it’s the president’s economic direction, Congress’s budget decisions, or a mayor’s local programs, each level of government impacts the opportunities available to all of us. As voters, it’s important to look at these structures and think about who is leading them. Are the candidates focused on job creation? What are their plans for agriculture and industries that affect our day-to-day needs? Do they support living wages, farmers' rights, and genuine land reform? How do they plan to ensure affordable prices for basic goods? And, crucially, who do they represent—are they accountable to elite interests, or do they prioritize the welfare of workers, farmers, and the poor?
Understanding how the government works and who makes the decisions helps you make a more informed choice. With elections just around the corner, now is the time to think about how the next leaders will affect not just politics, but the economy that influences everything from your paycheck to the price of rice. But beyond voting wisely, we must also build collective power to hold our leaders accountable and demand policies that work for the majority, not just the privileged few.
References:
Bautista, R. (2017). 7 Philippine Presidents, different leadership styles. INSIGHTS: The Guthrie-Jensen Blog. https://guthriejensen.com/blog/7-philippine-presidents-different-leadership-styles/
Official Gazette of the Republic of the Philippines. (1987). 1987 Constitution of the Republic of the Philippines. Retrieved from https://www.officialgazette.gov.ph/constitutions/1987-constitution/
Official Gazette of the Republic of the Philippines. (1991). Republic Act No. 7160: Local Government Code of 1991. Retrieved from https://www.officialgazette.gov.ph/1991/10/10/republic-act-no-7160/
Scharff, M. (2011). Building trust and promoting accountability: Jesse Robredo and Naga City, Philippines, 1988–1998. Princeton University. https://successfulsocieties.princeton.edu/sites/g/files/toruqf5601/files/Policy_Note_ID158.pdf