POLITICAL instability stemming from the arrest of former President Rodrigo R. Duterte could disrupt the progress of key legislative reforms, ING Bank said.
In a report, ING Regional Head of Research for Asia-Pacific Deepali Bhargava said: “From a policy perspective, there’s a possibility that the implementation of certain reforms that were recently passed gets delayed,” Ms. Bhargava said.
ING cited recent Senate bills seeking to lower the tax on stock transactions and proposed fiscal mining regime.
“These bills were seen to be financial market-friendly but could be delayed with the renewed focus on politics,” she said.
Mr. Duterte, who led the Philippines from 2016 to 2022, was arrested last week on charges of crimes against humanity. He faced the International Criminal Court (ICC) in a pre-trial session on Wednesday.
The push to raise minimum wages by P200 could also be derailed, “pushed to the back burner” in the face of the political turmoil, she added.
Earlier this year, a House of Representatives committee approved on second reading a bill that seeks to grant a P200 across-the-board wage increase for private-sector workers.
However, ING does not expect the arrest to have any significant impact on the overall economy.
“From the markets’ perspective, we do not expect the political climate to impact the macro stability narrative, given that our forecasts suggest contained inflation and moderating fiscal deficits.”
ING also noted the potential spillovers on the midterm elections, which will be “crucial,” following the impeachment proceedings against Vice-President Sara Duterte-Carpio.
“To avoid her removal as Vice-President and maintain her eligibility to run for president in 2028, the Duterte family needs their allies to secure seats in the Senate,” she said.
“This suggests that political unrest might continue, as the outcome of Ms. Duterte’s impeachment trial and the potential shifts in Senate power will keep both the public and the media intensely focused on the unfolding drama.”
The House of Representatives impeached Ms. Duterte before it went on a four-month break on Feb. 5. The allegations against her include misuse of secret funds, unexplained wealth, acts of destabilization and plotting the assassination of the President, the First Lady and the Speaker. — Luisa Maria Jacinta C. Jocson