Monday, April 20, 2015

Declining fortunes of Benigno Aquino raise fears among investors, Financial Times

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Declining fortunes of Benigno Aquino raise fears among investors

Philippine President Benigno Aquino delivers his address during a graduation ceremony at the Philippine National Police Academy (PNPA) in Silang town, Cavite province, south of Manila on March 26, 2015. Philippine President Benigno Aquino, who attended the graduation, reiterated in his speech that he is blameless in the death of 44 police commandos during the botched January 25 operation against Islamic militants. AFP PHOTO/TED ALJIBE©AFP
President Benigno Aquino of the Philippines is facing growing political pressure as his approval ratings tumble to record lows.
The latest dent to Mr Aquino’s credibility has added to concerns among investors over the outcome of next year’s presidential elections, analysts say.
Satisfaction with Mr Aquino’s performance fell to 47 per cent in the first quarter from 63 per cent in December, amid continuing fallout over a series of crises — most recently a botched counter-terrorism raid in January that claimed the lives of 44 members of an elite paramilitary police unit.
His position had already been weakened by criticism of his handling of Typhoon Haiyan in 2013, the deadliest to hit the archipelago, and failed efforts to bring convictions in the 10bn peso ($225m) “pork barrel scam” in which leading senators and congressmen were implicated.
The latest poll, commissioned by Social Weather Stations in Manila, mirrors similar findings in March.
The police deaths and Mr Aquino’s opaque response to questions about his role in the chain of command angered lawmakers in congress, who responded by shelving a peace deal with the Moro Islamic Liberation Front aimed at ending years of conflict on the restive island of Mindanao.
The landmark agreement was seen as one of the future pillars of Mr Aquino’s political legacy. Along with an aggressive anti-corruption drive, the prospect of a peace deal had seemed to offer assurance of a strong voice in the 2016 elections.
Amid damage to his defence and security credentials, Mr Aquino appears to be hardening his negotiating position with China over disputed territory in the South China Sea. At the weekend he ratcheted up his rhetoric, warning that China’s increasingly assertive actions pose a threat to global security and trade.
Mr Aquino’s domestic salvation may be that only 32 per cent polled believed he should resign. Tess Del Rosario, visiting senior research fellow at the Asia Research Institute, says the president’s integrity sits well with Filipinos and distinguishes him from regional contemporaries.
“President Aquino is widely perceived as a non-corrupt leader who has eschewed the privileges of office,” she says.
Percentage of the population who believe Mr Aquino should resign
Mr Aquino’s problems do look manageable compared with some of his regional peers. Malaysia’s Prime Minister Najib Razak faces a revolt from within his own party amid allegations of mismanagement at national development fund 1Malaysia Development Berhad, which he chairs.
Meanwhile, Thailand’s former prime minister Yingluck Shinawatra is due to stand trial over charges of negligence in the country’s rice subsidy scheme.
The highly resilient Philippine economy is also likely to shore up his position in his final year in office, with the country continuing to outperform. The IMF forecasts gross domestic product to expand 6.7 per cent this year, the fastest in Southeast Asia.
However, the possibility the country could lurch backwards and ditch Mr Aquino’s reforms is causing alarm among investors.
“It is potentially very concerning,” says Gareth Leather, economist at Capital Economics. “But it is difficult to imagine Mr Aquino having much influence on who succeeds him in the run-up to the elections and that raises the possibility there may not be the same emphasis on governance.”
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