Can Philippines overcome crisis of investor confidence amid inflation, corruption, debt woes?

Local businesses have expressed ‘confidence’ in the new leader and some analysts expect Duterte’s tax and ownership liberalisation laws to help boost foreign investments

But critics say the lack of references to corruption and rights in Marcos Jnr’s key policy speech will do little to change the view that the Philippines is ‘a stagnant and unattractive market’

Reading Time:7 minutes

An anti-Marcos Jnr protester holds a slogan that reads, “Return what you stole” during a rally in Manila on May 10, 2022. Photo: AP

Published: 8:30am, 30 Jul 2022

Since President Ferdinand “Bongbong” Marcos Jnr won a large mandate in the May 9 poll, the Philippine stock market index, generally a barometer of investor confidence, has taken a tumble from the 6,720.93 posted after election day to 6,315.93 on Friday.

Moreover, in June when he was officially proclaimed the president-elect, foreign investments registered with the Bangko Sentral recorded a higher net outflow of US$342 million, compared with US$270 million in May, according to figures released by the monetary body on Thursday.

Analysts blamed the stock plunge on external economic shocks brought on by Russia’s invasion of Ukraine and the US Federal Reserve’s aggressive rate hikes, rather than on the victory of the son and namesake of Ferdinand Marcos Snr, whose brutal and corrupt dictatorship left the Philippine economy in ruins in 1986.

Supporters watch a live broadcast of Philippine President Ferdinand ‘Bongbong’ Marcos Jnr delivering his first State of the Nation Address. Photo: EPA-EFE

They expressed confidence that Marcos Jnr’s State of the Nation Address (SONA) – a key policy speech that is every new president’s formal opening act – would dramatically reverse the index fall.

It didn’t.

Still, the President’s allies inside Congress and the business community applauded his July 25 speech, during which he pledged to finish a dozen rail projects that would cost a combined 1.9 trillion pesos (US$34.4 billion) and push Congress to approve 19 pieces of major legislation without elaborating on the sources of funding.

Even sceptics like Ateneo de Manila University law professor Antonio la Viña found Marcos Jnr’s speech somewhat of a relief, because unlike his predecessor Rodrigo Duterte, he “started on time, stuck to a script, did not curse at anyone, had a clear narrative and ended with a list of legislative priorities” that focused on economic recovery.

Tycoon Fernando Zobel de Ayala, president and CEO of the conglomerate Ayala Corporation, said the business community had “strong confidence” in Marcos’ economic team. Photo: Xinhua

Raissa Robles

Raissa Robles has written for the SCMP since 1996. A freelance journalist specialising in politics, international relations, business and Muslim rebellion, she has contributed to Reuters, the Economist Intelligence Unit, Daily Mail, Times of London, Radio Netherlands and Asiaweek. She runs the award-winning investigative and opinion blog, raissarobles.com. Her book, Marcos Martial Law: Never Again, a brief history of the dictatorship won the 2017 National Book Awards for Non-Fiction. Her Twitter handle is @raissawriter.

scmp poll

Before you go

Can Philippines overcome crisis of investor confidence amid inflation, corruption, debt woes?

Southeast Asia’s tech reliance on China: a ‘double-edged sword’?

Korean influencer in Philippines slammed for drinking breast milk of local mums

South Korea’s denial of joint drills with Japan highlights past ‘grievances’