The Philippine national elections scheduled for May next year could create uncertainty about leadership that could threaten to set back the political and economic gains the country has achieved over the last five years, BMI Research said in a report.
“Political uncertainty will rise over the coming months as the Philippines gears up for the upcoming presidential, congressional, and local government elections scheduled for May 9, 2016,” the think tank of global ratings agency Fitch Group said in a research note.
BMI said the current Administration, since assuming office in 2010, has made significant progress in terms of strengthening the country’s institutions, reducing corruption and improving the economy.
The Philippines has been one of the biggest movers in the Transparency International’s Corruption Perceptions Index, climbing to the 85th rank in 2014 from 134th in 2010, the BMI pointed out as an example.
The clampdown on corruption has improved the country’s business environment, with positive implications for foreign direct investment inflows, it said.
In addition, it said the Philippine economy has enjoyed strong growth, manageable inflation and fiscal improvement under the current leadership, leading to upgrades by all major credit rating agencies to the country’s sovereign credit rating from junk to investment grade.
“Consequently, a major concern among investors and businesses is whether or not the positive political and economic reform policies that have been implemented by [President Benigno] Aquino [3rd] and his administration since 2010 will outlive his presidency,” it said.
BMI stressed that the greatest threat the Philippines will face in the upcoming elections is, therefore, the possible lack of continuity of Aquino’s hugely positive political and economic reform policies, which would represent a major setback for the country.
Political and economic gains made by the current Administration since 2010 could easily be undone by one election, it said.
“Given that previous handovers of power have been disruptive for policy continuity, a smooth change in government this time around cannot be taken for granted,” it added.