Peace deal setbacks to affect economy – BMI


Congress’ failure to pass the proposed Bangsamoro Basic Law (BBL) has heightened risks to development and doing business in the Philippines, a Fitch Group firm said.

“The peace process in the Philippines has undergone a significant setback with the failure of Congress to approve a bill aimed to strengthen the Bangsamoro region in Mindanao,” Business Monitor International Ltd. (BMI Research) said in a study.

“Designed to strengthen the political autonomy of the Bangsmoro region with its predominantly Muslim Moro ethnic population, the BBL would have led to the implementation of the Comprehensive Agreement on Bangsamoro (CAB), the peace deal between the government and the MILF (Moro Islamic Liberation Front),” it noted.

Lawmakers have resisted the Aquino administration’s push to have the BBL approved and BMI Research said a three-month recess that started on February—to allow reelectionists to campaign for the May national elections—had reduced the likelihood of the bill being passed.

It pointed out that the leading presidential candidates had also showed limited support for the bill and were facing widespread popular pressure to reject it.

Support for a peace agreement was said to have plunged in the aftermath of the Mamasapano clash between the Special Action Force of the Philippine National Police and the MILF in January last year, which led to the deaths of 44 officers.

With this, the think tank stressed security risks would continue to deter investment and slow economic development.

BMI Research highlighted that the Philippines’ currently low regional ranking for Conflict Risk in its Crime and Security Index “reflects the considerable security concerns for businesses and investors with regards to kidnappings, extortion, and attacks from terrorist groups such as MILF.”

“The uncertainty surrounding the implementation of the CAB heightens these risks,” it said.

The Philippines ranked 31st out of 35 Asia-Pacific countries in the Crime and Security Index, next to India and Papua New Guinea. Hong Kong was ranked first for the having the lowest conflict risk, while Afghanistan was at the bottom.

In addition, the firm said other militant factions in the region such as the Bangsamoro Islamic Freedom Fighters and the Abu Sayyaf Group were more likely to carry out attacks and disrupt the peace process.

“There is also an increased possibility of renewed open conflict between MILF and the government,” it warned.

As a result, the costs for businesses to protect their assets and the risk of incurring losses from attacks are high and likely to rise, it added.

BMI Research also highlighted that conflict in Mindanao was undermining the region’s potential to develop economically and threatened to slow the entire country’s progress.

“The government’s budget will be constrained by the need to allocate resources to internal security issues and investment in infrastructure and education will suffer, diminishing the Philippines’ otherwise promising economic potential,” it said.

BMI Research expects Philippine economic growth to accelerate slightly to 6 percent this from the 5.8 percent expansion recorded in 2015.


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  1. Lawmakers are yet o grasp how international law should cover particularly dealing with rejection of the peacemaking process on constitutionality grounds. That to altogether declare peacemaking unconstitutional, it redound to saying peacemaking as something unlawful.

    This is a signed peacemaking agreement witnessed by two head of states of Malaysia and the Philippines and everyone in the community of nations allover the world are in attendance to mean this is no ordinary agreement, it does pervade signed CAB as a sanction of the international community.

    That said, what our lawmakers should have done is refer CAB to the United Nations for arbitration since signed accord is believed to be an international accord thus international arbitration would have been the appropriate measure.

    After all, what is ICG? ICG is an acronym for International Contact Group.