A late dictator's son, a champion boxer turned senator, and a movie star turned mayor have all made it to the final list of contenders aspiring to succeed President Rodrigo Duterte. They will argue their case to voters who have registered in record numbers from now until the elections on May 9, 2022. Duterte ran for Senate but dropped out. His daughter, Davao Mayor Sara Duterte, is running for Vice President and is supporting former Senator Ferdinand "Bongbong" Marcos Jr. for President. Under the country's constitution, presidents can only serve for six years.
Boxer-turned-Senator Manny Pacquiao, dictator Ferdinand Marcos Jr.'s son, Bongbong Marcos, actor and Manila Mayor Isko Moreno, former police commander and now Senator Panfilo Lacson, and opposition leader Vice President Leni Robredo are currently on the list of main presidential contenders. Whoever follows Rodrigo Duterte would be faced with the task of restoring an economy that has been shattered by the epidemic. While household spending and services helped the economy recover in the third quarter, actual output has yet to restore to pre-pandemic levels.
Due to logistical issues and vaccine hesitancy, the Philippines has lagged behind most of its Southeast Asian neighbors in terms of immunization — and, according to a Bloomberg ranking of 53 countries' resiliency, has been the worst place to be during the pandemic for two months in a row, starting in September. Election expenditure, which typically improves the Philippines' economy by 1 percentage point, is expected to be hampered by restrictions on in-person campaigning. The next president will inherit an economy that had an exceptional run of above 6% yearly growth from 2012 to 2019 before the epidemic halted it.
The Current Economic Climate
Inflation may compel the central bank to begin hiking interest rates, so Duterte's successor will have to deal with rising government debt and more expensive loans used to build up the country's pandemic response. After Covid exacerbated inequality, the next president will have to focus on reducing unemployment and poverty. Investors may be wary in the run-up to the election, since election outcomes are far from definite as political alliances move frequently and voters stay addicted to social media platforms where disinformation operations abound. Market players will continue to scrutinize candidates' tax, incentive, infrastructure, and foreign investment programs.
The Philippines' connections with the United States and China will be constantly monitored in terms of foreign policy. Duterte had forged deeper connections with Beijing, which helped with vaccinations during the outbreak and promised billions in infrastructure financing. As tensions in the South China Sea escalate, Duterte reinstated a major military agreement with the United States this year, and the Philippines aims to resume full-scale military training with its long-time ally in 2022.
Investor Standings
According to a Bloomberg survey, investors in the Philippines are lukewarm about the idea of a Ferdinand "Bongbong" R. Marcos, Jr. administration, with Vice-President Maria Leonor "Leni" G. Robredo emerging as their top choice to lead the country's economic recovery. Senator Panfilo "Ping" M. Lacson had the best score of 91, and Manila Mayor Francisco "Isko" M. Domagoso received the lowest score of 81, according to a survey of 28 investors and experts. With a score of 46 and 44, respectively, Mr. Marcos and Senator and boxing champion Emmanuel "Manny" D. Pacquiao came in last.
Investors were asked to rank the five candidates on a scale of 1 to 5, with 5 being the highest. Ms. Robredo, who is trailing Mr. Marcos in most surveys ahead of the May 9 presidential election, has vowed to put corruption on the back burner while still facilitating epidemic recovery and job development. Mr. Marcos, the son and namesake of the late dictator Ferdinand Marcos, who led the Philippines to bankruptcy in 1983, promised to help the agriculture sector, improve traffic flow on Manila's highways, promote for the use of renewable energy, and combat communist insurgency.
The Philippine economy, which had been among the world's fastest-growing in the previous decade until the epidemic wiped off hundreds of thousands of employment and caused a record downturn, is on the line. President Rodrigo R. Duterte, who is confined to a single six-year term by law, wants to see the economy grow by as high as 9% this year. "What we need is a captain who can lead us out of this storm," Jonathan Ravelas, chief market strategist at BDO Unibank, Inc., said. "The next president must be able to solve the current economic and social issues and return us on a faster-growing course." That will have a major impact on how our markets function."
In a poll taken from late February to early March, nearly all respondents expected that the economy will expand by at least 6% over the following six years. According to poll findings, the future government's top priority will be dealing with the epidemic and lowering inflation. "If Marcos is elected, it would further confirm our belief that the economy will continue to underperform in the coming years," Alex Holmes, Asia economist at Capital Economics Ltd., wrote in a February note, noting his tax case and a lack of accomplishments as senator. Despite the tax conviction, Mr. Marcos' team claims he is qualified for president.
Six out of ten Filipinos voted for the former senator in a January poll conducted by Pulse Asia Research, Inc. Ms. Robredo came in second place with 16 percent, while Moreno, Pacquiao, and Lacson all received less than 10%. In the 2016 vice-presidential election, Ms. Robredo barely beat Mr. Marcos, despite his protests. His accusation of widespread fraud in various areas was later dismissed by the Supreme Court. In a January report, Nomura Holdings, Inc. economists including Sonal Varma wrote, "Marcos, in our opinion, will be regarded as less market-friendly than Robredo, particularly when it comes to experience at the national level and in articulating a strategy for the country to recover from the pandemic."
The success of Philippine markets will be largely determined by domestic issues such as the policies of the future administration. According to a Bloomberg survey, the peso, which has been the poorest performing currency in Southeast Asia this month, would most certainly remain below 52 dollars by the end of the year. On Friday, the peso traded near its September 2019 low of 52.29, having lost 2.5 percent this year. According to the survey, the benchmark stock index, which has dropped about 10% since Mr. Duterte took office in 2016, will recover above 7,500 by the end of the year, while 10-year bond rates will remain above 5%.