Fitch Solutions: PDP-Laban infighting threatens PH policymaking, economic recovery

The country is at risk of political instability and economic disruption due to the conflict between two factions in the ruling administration party, according to a global research firm.

Fitch Solutions has reduced the Philippines’ Short-Term Political Risk Index score from 64.8 to 64.0 out of 100, following the latest pre-election tension between the camps of President Duterte and rival Senator Manny Pacquiao within the PDP-Laban party.

Fitch Solutions political risk index puts 100 percent as the lowest risk while 0 percent represents a high risk of political instability.

“We at Fitch Solutions view the infighting within the Philippines’ governing PDP-Laban party ahead of 2022 elections as detrimental to the country’s near-term policy-making outlook,” the group said in its latest report.

“With the two camps at loggerheads over leadership of the party and who should receive party backing for the presidential and vice-presidential elections, there is a risk that policy-making processes will slow as attention is turned to political jostling rather than measures to speed up the Philippines’ economic recovery from the Covid-19 pandemic and longer-term reforms,” it said.

Fitch also warned of possibly further lowering the country’s political risk index score due to signs of disruptions to policymaking such as the delayed passage of the proposed 2022 national budget.

It said the PDP-Laban infighting and potential switching of allegiances in the coming months could derail policymaking while the local economy remains hampered by COVID-19. The domestic economy took a heavy hit after the pandemic dampened business and consumer activity and caused rise in unemployment and hunger levels.

“Political distractions and infighting within the governing coalition could hamper efforts to reopen and support the economy,” Fitch said.

“Focus will likely shift away from the need to boost the Philippines’ vaccine uptake rates and address supply issues, while we highlight the potential for delays to the passing of the 2022 budget before year-end,” it added.

Fitch also cautioned about the possible delays in other long-term reforms such as proposals to ease restrictions on foreign ownership in the utilities and retail sectors, as well domestic hiring requirements, which could be key to reinvigorating investor interest in the Philippines.

“The politicking will likely distract the government from policymaking in the near term and threatens disunity with the government,” it added.

The PDP-Laban administration party has split into two after they pushed for different set of candidates for the 2022 presidential elections.

Duterte, who leads the political party as chairman, recently accepted the nomination to run for vice president in next year’s elections. The petition was pursued by the pro-Duterte faction led by Energy Secretary Alfonso Cusi.

Pacquiao, the party president, is reportedly eyeing a presidential run in next year’s elections. He earlier drew the President’s ire following his criticisms at the alleged corruption in government as well as his weak West Philippine Sea stance against China. The pro-Pacquiao faction is set to hold an assembly next week.

PDP-Laban dispute boosts chances of opposition in 2022 elections — Fitch Solutions

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Source: Latest Politics News Today (Politics.com.ph)