Business World : Investors lukewarm to Marcos presidency

13 March 2022

By Business World

PHILIPPINE investors are lukewarm to the prospect of a Ferdinand “Bongbong” R. Marcos, Jr. presidency, with Vice-President Maria Leonor “Leni” G. Robredo emerging as their top pick to oversee an economic rebound, according to a Bloomberg poll.

A survey of 28 investors and analysts gave Ms. Robredo the highest score of 106, followed by Senator Panfilo “Ping” M. Lacson with a score of 91 and Manila Mayor Francisco “Isko” M. Domagoso with 81.

Mr. Marcos and Senator and boxing champion Emmanuel “Manny” D. Pacquiao were at the bottom with a score of 46 and 44, respectively.

Investors who were asked who they think is the best person to lead the Philippine economy ranked the five candidates on a scale of 5 to 1, with 5 as the top score.

Ms. Robredo, who trails Mr. Marcos in most voter polls for the May 9 presidential election, has pledged to prioritize stamping out corruption and enabling pandemic recovery and job creation.

Mr. Marcos, the son and namesake of the late dictator who ran the Philippines when it declared bankruptcy in 1983, vowed to aid the farm sector, improve traffic flow on Manila’s roads, push for the use of renewable energy and fight communist insurgency.

At stake is the revival of the Philippine economy, among the fastest-growing in the world in the last decade until the pandemic cut hundreds of thousands of jobs and triggered a record contraction.

President Rodrigo R. Duterte, who is limited by law to a single six-year term, is targeting expansion of as much as 9% this year.

“What we need is a captain who will bring us out of the storm,” said Jonathan Ravelas, chief market strategist at BDO Unibank, Inc. “The next leader must be able to address the economic and social crises we are confronting, to put us back on the path to faster growth. How our markets will perform will depend greatly on that.”

Almost all the respondents in the poll conducted from late February to early March predicted that an economic expansion of at least 6% could be sustained in the next six years. Managing the pandemic and cooling inflation are the biggest priorities for the next government, according to poll results.

“If Marcos is elected, it would only reinforce our view that the economy will continue to underperform over the coming years,” Alex Holmes, Asia economist at Capital Economics Ltd., wrote in a February note, citing his tax case and a lack of achievements when he was senator. Mr. Marcos’s camp said he is qualified to be president despite the tax conviction.

The former senator led a January poll by Pulse Asia Research, Inc. with six of 10 Filipinos voting for him. Ms. Robredo was a far second with 16%, while Messrs. Moreno, Pacquiao and Lacson got less than 10%.

Ms. Robredo narrowly defeated Mr. Marcos in the 2016 vice-presidential election, which he protested. The Supreme Court eventually rejected his claim of rampant fraud in some provinces.

“Marcos, in our view, will likely 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,” Nomura Holdings, Inc. economists including Sonal Varma wrote in a January report.

Domestic factors such as the policies of the next government will be the biggest drivers of the performance of Philippine markets. The peso, the worst performer in Southeast Asia this month, will likely stay below the 52-a-dollar level by the end of the year, according to the Bloomberg poll. The peso, which has weakened by 2.5% this year, traded near its Sept. 2019 low at 52.29 on Friday.

The benchmark stock index, which has fallen by almost 10% since Mr. Duterte took office in 2016, is forecast to rise above the 7,500 level by the end of the year, while 10-year bond yields are expected to hold at above 5%, according to the poll.

The Philippine Stock Exchange Index closed at 7,112.19 on Friday, while the 10-year rate on the secondary market was 5.4801%.

Mr. Duterte said at the weekend his successor should be a lawyer who is compassionate and decisive.

“I’m not saying it’s the best quality, but one of the good qualities of a president — hopefully a lawyer,” he said in a taped interview with his spiritual adviser Apollo C. Quiboloy, who is wanted in the US for sex trafficking and other charges.

Mr. Duterte said a lawyer would know the repercussions of his decisions. The tough-talking leader, whose war on drugs has killed thousands, also said the next president should be compassionate and pro-people.

Ms. Robredo and Jose Montemayor, Jr. are the only lawyers among the 10 presidential bets this year.

Mr. Duterte, who canceled his vice-presidential bid last year, has said he would not endorse Mr. Marcos even if he’s the running mate of his daughter Sara Duterte-Carpio. — Bloomberg with Kyle Aristophere T. Atienza