PH political risk level ‘low,’ says Moody’s

Economic reforms will continue, albeit at a slower pace initially, regardless of whoever succeeds President Aquino in 2016, debt watcher Moody’s Investor Service said this week.

In a report, Moody’s said it expects the country’s reform momentum to bog down next year, but this is a normal part of any transition between governments.

“The extent to which the next leader will institutionalize or reverse reforms conducted by Mr. Aquino’s administration—especially positive changes related to fiscal management—is unclear,” Moody’s said in a report on political noise in Southeast Asia.

“Nevertheless, our assessment of domestic risk in the Philippines at ‘Low’ is in line with large democracies such as Indonesia and India, where policy challenges are often posed by democratic transitions,” the firm said.

Moody’s rated the level of political risk from “high” to “very low.”

In Southeast Asia, Thailand scored the worst with a risk rating of “moderate.” The best-rated countries were Malaysia and Singapore, which had “very low” political risk scores.

Prior to Mr. Aquino’s term, political noise in the Philippines was much worse, Moody’s said.

The current administration’s record “contrasts with the latter years of the two preceding administrations, which were fraught with political turmoil,” the firm said.

The stability the country has enjoyed since 2010, accentuated by Mr. Aquino’s record-high approval ratings relative to the past four Philippine presidents this late into their terms, shows the population is, in general, satisfied with the lay of the land.

This leaves “political space for continued reform,” Moody’s said.

Major changes in policies are unlikely because historically, the Philippines elects presidents based on personality, not ideology or party affiliation.

None of the current four official candidates for president, namely Vice President Jejomar Binay, Senators’ Miriam Defensor-Santiago and Grace Poe, and former Interior and Local Government Secretary Mar Roxas, will represent a departure from President Aquino’s economic policies.

“The absence of allegations of large-scale graft during the current government has set the bar higher for control of corruption, signaling continued political stability in the next administration,” Moody’s said.