INTRODUCTION

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 chang