Philippine president aims to secure his legacy

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Aquino-SONAPhilippine President Benigno Aquino III addressed parliament for the last time on July 27, racing to secure fragile legacies of peace in the war-torn south and a stronger economy.

Aquino made his final “State of the Nation Address” with his political clout fading and struggling to choose a successor for next year’s elections that would continue with his agendas, analysts said.

Aquino, who has overseen an economic resurgence for the country once known as the sick man of Asia, has been meeting with potential contenders including Senator Grace Poe and Interior Secretary Mar Roxas and is expected to name his preferred candidate this week.

The incumbent president, who took office in 2010 and is limited by law to a single six-year term, has helmed an economy in which growth exceeded 6 percent from 2012 to 2014 and credit ratings have climbed to investment-grade from junk. A crackdown on tax evaders and corrupt officials has given him revenue to build roads and schools, boost cash handouts and curb debt.

Including reinvestments of dividends, the Philippine Stock Exchange Index returned 163 per cent from July 1, 2010 through July 25, 2015 the second-best performer in the Asia-Pacific region.

The government’s reforms and openness boosted economic growth, increased investor confidence and reduced poverty. The administration also managed to pass a reproductive health law, breaking decades-long resistance of the Catholic Church. In external affairs, Aquino got public support when he stood up to Beijing on the South China Sea dispute.

On the other side of the balance sheet, the country is still plagued by huge income inequalities and graft; the office of the president has been accused of misusing funds. Government disastrously and fatally bungled two police operations: one to rescue Hong Kong hostages from a gunman, the other to arrest terrorists in the southern Philippines. The latter seriously damaged Aquino’s popularity early this year, but his ratings have since climbed back.

But with elections next year, and global volatility already pushing investors to seek safe havens, the uncertainty over his successor is a reason for caution.

During the last quarter ending June, foreign investors sold a net $700 million of Philippine shares – the most since the Asian crisis in 1998. Still, they are net buyers of more than $4.6 billion of stocks since Aquino assumed office.

“The Philippines has, over a long period of time, suffered from cycles of better governance and poorer governance,” said John Forbes at the American Chamber of Commerce in Manila.

“It is in a cycle of better governance right now but it has not proven its ability to make that sustainable in the long run,” he added.

Comparison of economic indicators of Philippine presidencies since Ferdinand Marcos
(Source: Asian Institute of Management)

Aquino2 Aquino3 Aquino4 Aquino5 Aquino6 Aquino7 Aquino8 Aquino9 Aquino10 Aquino11

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Reading Time: 3 minutes

Philippine President Benigno Aquino III addressed parliament for the last time on July 27, racing to secure fragile legacies of peace in the war-torn south and a stronger economy.

Reading Time: 3 minutes

Aquino-SONAPhilippine President Benigno Aquino III addressed parliament for the last time on July 27, racing to secure fragile legacies of peace in the war-torn south and a stronger economy.

Aquino made his final “State of the Nation Address” with his political clout fading and struggling to choose a successor for next year’s elections that would continue with his agendas, analysts said.

Aquino, who has overseen an economic resurgence for the country once known as the sick man of Asia, has been meeting with potential contenders including Senator Grace Poe and Interior Secretary Mar Roxas and is expected to name his preferred candidate this week.

The incumbent president, who took office in 2010 and is limited by law to a single six-year term, has helmed an economy in which growth exceeded 6 percent from 2012 to 2014 and credit ratings have climbed to investment-grade from junk. A crackdown on tax evaders and corrupt officials has given him revenue to build roads and schools, boost cash handouts and curb debt.

Including reinvestments of dividends, the Philippine Stock Exchange Index returned 163 per cent from July 1, 2010 through July 25, 2015 the second-best performer in the Asia-Pacific region.

The government’s reforms and openness boosted economic growth, increased investor confidence and reduced poverty. The administration also managed to pass a reproductive health law, breaking decades-long resistance of the Catholic Church. In external affairs, Aquino got public support when he stood up to Beijing on the South China Sea dispute.

On the other side of the balance sheet, the country is still plagued by huge income inequalities and graft; the office of the president has been accused of misusing funds. Government disastrously and fatally bungled two police operations: one to rescue Hong Kong hostages from a gunman, the other to arrest terrorists in the southern Philippines. The latter seriously damaged Aquino’s popularity early this year, but his ratings have since climbed back.

But with elections next year, and global volatility already pushing investors to seek safe havens, the uncertainty over his successor is a reason for caution.

During the last quarter ending June, foreign investors sold a net $700 million of Philippine shares – the most since the Asian crisis in 1998. Still, they are net buyers of more than $4.6 billion of stocks since Aquino assumed office.

“The Philippines has, over a long period of time, suffered from cycles of better governance and poorer governance,” said John Forbes at the American Chamber of Commerce in Manila.

“It is in a cycle of better governance right now but it has not proven its ability to make that sustainable in the long run,” he added.

Comparison of economic indicators of Philippine presidencies since Ferdinand Marcos
(Source: Asian Institute of Management)

Aquino2 Aquino3 Aquino4 Aquino5 Aquino6 Aquino7 Aquino8 Aquino9 Aquino10 Aquino11

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