Philippine banks brace for Marcos 2.0
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Philippine banks brace for Marcos 2.0

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Illustration: Jon Berkeley

What does a new government hold for the Philippine economy and its banks? There are plenty of concerns – mingled with some optimism that the president may help steady the ship.

When Ferdinand Marcos Jr, the new president of the Philippines, made his first state-of-the-nation address on July 25, he promised to use “the best Filipino minds to help navigate us through this time of global crisis”.

But so far, Marcos has been a study in opacity about his plans for southeast Asia’s fifth-biggest economy, revealing little since his election in May or since officially taking up office on June 30.

He has talked of prudent fiscal management, boosting tax revenues, infrastructure spending of at least 5% of gross domestic product and annual growth of 8%. But he has not said how he plans to achieve those goals. Instead, he has signalled the need for continuity from the last government, which was run by Rodrigo Duterte from June 2016 to June 2022.

That signalling is what has worried many economists and global investors.

“The Philippines desperately needs both a good governance agenda as well as a robust trade and industrial policy if it wants to go to the long pants phase,” says political adviser Richard Heydarian, author of The Rise of Duterte: A Populist Revolt Against Elite Democracy. “On that, we’re still awaiting a decisive move.”

Bankers fall into two camps – those who are optimistic about the new regime and its impact on the financial industry and economy, and those who fear the government will be too distracted to put together some much-needed reforms.

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