Fitch Solutions lowers Philippine risk score due to PDP-Laban 'infighting'

Fitch Solutions Country Risk and Industry Research has lowered its short-term political risk index score for the Philippines due to the "infighting" between two factions of the ruling PDP-Laban party.

In a commentary released Monday, Fitch Solutions said it lowered its short-term political risk index score for the Philippines to 64.0 from 64.8 out of 100.

The downgrade reflects expectations for disruptions, and warning that delays to the passing of the 2022 budget could prompt an even lower revision.

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

“The PDP-Laban infighting and potential switching of allegiances in the coming months could disrupt policymaking at a time when the Philippine economy remains hampered by COVID-19,” it added.

One faction of PDP-Laban is led by Senator Manny Pacquiao while the other is led by Energy Secretary Alfonso Cusi. Both claim legitimacy and has kicked members of the rival faction out of the party due to alleged violations in the group's constitution.

“Political distractions and infighting within the government coalition could hamper efforts to reopen and support the economy,” Fitch Solutions 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 delays to the passing of the 2022 budget before year-end.”

Also among the possible delays include the proposed easing of restrictions on foreign ownership in the utilities and retail sectors, and in hiring requirements, which could reinvigorate investor interest in the country.

The Cusi faction has endorsed President Rodrigo Duterte as its vice presidential candidate and Senator Christopher “Bong” Go as presidential candidate in the 2022 elections.

Duterte accepted the endorsement, while Go declined, saying he is not interested in the presidency. Go has offered himself as the running mate of Davao City Mayor Inday Sara Duterte, the president's daughter.

The Cusi-led faction has filed a petition for the Commission on Elections (Comelec) to declare Pacquiao and former Senator Aquilino “Koko” Pimentel III as illegal representatives of their party.

Pacquiao said his faction will await the decision of the Comelec, but has insisted that his faction is the legitimate PDP-Laban group after the petition.

Pacquiao has ordered the expulsion of Cusi and two other officials from PDP-Laban over alleged violations of its by-laws and constitution.  —KBK, GMA News