While most are wary of the impact of quickening inflation, borrowing costs and sovereign debts on economic growth, economists said a credible election and a smooth turnover will be the main issues while there is no new administration to make policy announcements yet.
But others, particularly those who supported the candidacy of Vice President Leni Robredo, surmised that an election win by former Sen. Ferdinand “Bongbong” Marcos Jr. would wreak havoc on Philippines Inc. and only Robredo could save the country from its economic troubles.
“Most thinking Filipinos, along with international observers, opine it’s [a Marcos win] going to wreak havoc on the economy,” said former socioeconomic planning secretary Ernesto Pernia, a member of a group called Economists for Leni.
“Of course, everyone—except his core supporters—is hoping and praying he won’t make it. The country will be better off,” Pernia said.
Growth prospects
Emilio Neri Jr., lead economist of the Ayala-owned Bank of the Philippine Islands, predicted “a plus 1.5-percentage point (ppt) upgrade for 2022 growth if Robredo wins,” but a Marcos win would shed 1.5 ppt from growth this year.
Asked how he came up with such growth estimates, Neri said: “One candidate [Robredo] is a Commission on Audit valedictorian who can mobilize limited resources efficiently; the other [Marcos] has no such track record.”
Other economists, however, preferred to wait for actual economic data and policy pronouncements.
100-day grace period
For Miguel Chanco, chief emerging Asia economist at UK-based Pantheon Macroeconomics, “it’s almost impossible to say at this stage what a Marcos presidency would do for the Philippine economy, partly because his campaign is devoid of concrete proposals.”
“What matters more … is a legitimate election and a smooth transition process, which can’t be taken for granted, especially if the outcome of the actual vote is much closer than the current polls suggest,” he said.
Other economists expect the transition to the next administration to be mostly business as usual.
“The Philippines has a rich history of a smooth transition to power,” BDO Unibank chief market strategist Jonathan Ravelas said.
“Investors typically give a 100-day grace period to assess the competency of the new administration and its Cabinet,” Regina Capital Development managing director Luis Gerardo Limlingan said.
“Regardless who wins, we believe that the most important considerations for the economy and financials markets are to have a credible election and peaceful turnover of power from the current administration to the next,” Philippine National Bank economist Alvin Joseph Arogo said.
Nicholas Antonio Mapa, senior Philippine economist of Dutch financial giant ING, said “a misstep in the first 100 days could spell the difference between credit downgrade or a stay.”
Union Bank of the Philippines chief economist Ruben Carlo Asuncion said “uncertainties will definitely rise, but as the smoke clears, everyone has to work together to move forward.” INQ
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