June 30, 2022
MANILA – The incoming Marcos Jr. administration faces risks of unrest due to high food prices as well as slower economic growth as public spending lagged at the start of this year, think tanks said.
Despite uncertainty wrought by current global market conditions, incoming Socioeconomic planning Secretary Arsenio Balisacan on Wednesday said gross domestic product (GDP) growth of 6.5-7.5 percent for 2022 would be “respectable.” Outgoing President Duterte’s economic team had set a downscaled 7-8 percent GDP growth target for this year.
“The rising cost of living will make life hard for the victor of the Philippines’ presidential election, Ferdinand ‘Bongbong’ Marcos Jr.,” global risk intelligence firm Verisk Maplecroft said in its political risk outlook 2022 report.
As such, Verisk Maplecroft said the Philippines belonged to 10 emerging markets “most at risk of destabilization,” which also included Argentina, Bangladesh, Brazil, Egypt, Kenya, Lebanon, Pakistan, Senegal and Tunisia.
“These are the countries where the cost-of-living crisis will drive a spike in civil unrest, with knock-on impacts for political stability and investor confidence,” Verisk Maplecroft said, citing data from its civil unrest index projections as well as insights from its food and energy security indices.
‘High risk’
Verisk Maplecroft said the Philippines was at “high risk” both in terms of energy and food import security. Globally, these risks emanated from the prolonged COVID-19 pandemic, coupled with the protracted Ukraine-Russia conflict.
“Russia’s invasion of Ukraine has made a bad situation worse, causing instant disruption to energy markets and food supply chains, and provoking further price rises. With no resolution of the conflict in sight, the global cost of living crisis will continue deep into 2023,” it warned.
Also, Verisk Maplecroft said middle income countries like the Philippines were most at risk from civil unrest.
“Unlike low-income countries, they were rich enough to offer social protection during the pandemic, but now struggle to maintain high social spending that is vital to the living standards of large sections of their populations,” it said.
Verisk Maplecroft also flagged “the confluence of weak ESG trends and intense macro pressures” in the Philippines and Indonesia, referring to environmental, social and corporate governance initiatives.