By Bianca Cuaresma, May 17 2019; Business Mirror
Image Credit to Wall Street Journal
FITCH Ratings on Thursday made a statement on the most recent partial and unofficial results of the country’s midterm elections, saying the leading administrative slate for the Senate could actually bode well for the country’s economics.
Partial, unofficial results from the Commission on Elections show that the administration’s allies are bound to dominate the Senate, with most of the 12 senatorial seats going to pro-administration political parties or bets endorsed by either President Duterte or his daughter’s Hugpong ng Pagbabago (HNP).
“Early results of the midterm elections suggest President Duterte and his allies would secure a majority in the Senate. This outcome, if confirmed, could bode well for policy continuity during the President’s remaining term,” Fitch Ratings Associate Director Sagarika Chandra said.
Earlier in the week, local economists said an administration-led Senate could prevent delays in the President’s legislative agenda.
Security Bank chief economist Robert Dan Roces, in his views on the partial and unofficial election results on Tuesday, said future budget proposals are likely to be approved within the timeframe with a Senate full of administration bets.
“With a Senate likely to be composed of admin bets, future budget proposals may most likely be passed within the time frame, and the tax-reform program will likely be revived,” Roces said.
ING Bank Manila Nicholas Antonio Mapa echoed the view, saying the results will lead to faster budget implementation in the future.
“The election returns point to what most of us had expected, a strong showing for administration candidates. This will help further Duterte’s legislative reform agenda with more bodies to drive TRAIN packages and hopefully lead to faster implementation and passage of budgets in the future to avoid the 1Q snafu,” Mapa said.
In the first quarter of the year, local economic growth was stifled by budget delays, as the two chambers of Congress failed to agree on certain budget provisions in the appropriations act.
As such, growth for the first quarter of the year suffered, hitting 5.6 percent, the lowest growth in four years.
For Fitch Ratings, the key economic factors they would be watching in the period ahead remain—the Philippines’s growth outlook, progress on tax reforms and fiscal policies.
Fitch Ratings last affirmed the Philippines’s Issuer Default Rating last December at BBB/Stable.