Philippine Financial Market amidst Socio-Political Challenges
The Philippine financial market has grown significantly over the past years since the
Asian Financial Crisis (AFC). Financial liberalization, prudential supervision, and regulatory
reforms have significantly improved the stability, efficiency, depth, and accessibility of the
domestic financial markets and institutions (Dakila, 2020). Even before the COVID-19
pandemic, the Philippine economy performed one of the best in the world.
From 2012 to 2019, the Philippine economy has an average growth rate of 6.6%. Under
the Duterte Administration since 2016, the Philippines experienced economic growth up until
2020 when community lockdown measures were implemented in the country because of the
COVID-19 pandemic, which influenced the financial markets. The Philippine government faces
challenges like corruption and lack of due process in the criminal justice system. This year marks
the end of Duterte’s six-year term and his successor will be determined after the May 2022
presidential elections. According to Gerard Abad, chief investment officer at AB Capital &
Investment Corp., “The next president is getting a tougher economy and a harder fiscal position
than what Duterte inherited.” With Ferdinand “Bongbong” R. Marcos, Jr. leading in the results
with over 31 million votes as of May 13, 2022, he might be faced with surging inflation, rising
interest rates, and fallout from the war in Ukraine. The Russia-Ukraine war also had a significant
effect on the Philippine financial markets. According to Finance Secretary Carlos Dominguez III,
the effect of the Russia-Ukraine war on the Philippine economy will be temporary. A
comprehensive set of measures is now being implemented to ease its impact on the economy and
the people.
The biggest factor affecting the Philippine economy is the COVID-19 pandemic followed
by the recent May 2022 presidential elections. The country is still in the process of overcoming
the recession and returning to the rapid and steady growth of the pre-pandemic decade. And with
the investors having anxiety in lieu of policy uncertainty, stock trading may move sideways. The
Philippine government should focus more on these factors because this has caused the country its
first recession in three decades.
Reference:
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Hofman, B. J. N. (2012, April 27). Economic and Political Challenges in the Philippines.
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Mendoza, R. U. (2022, March 9). The Philippine economy under the pandemic: From Asian
tiger to sick man again? Brookings. Retrieved May 19, 2022, from
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