Elections in the Philippines are almost always disruptive, politically risky affairs. New leadership means new decision-making power networks (formal and informal), plus new winners and losers amongst domestic business conglomerates and elites. The May 2022 presidential race will follow this trend, with themes of history and family vengeance adding additional layers of intrigue.

Return of history

If pre-election surveys and lobbying efforts by Manila’s elites are to be believed, the Philippines is about to hand a convincing win to presidential candidate Ferdinand “Bongbong” Marcos, Jr – the son and namesake of the late long-time dictator who was unseated by the 1986 EDSA People Power Revolution. The most recent credible polling show Marcos comfortably ahead of his only viable challenger Vice-President Leni Robredo – a rare reformist politician whose supporters continue to hold out hope for an election upset.

The former dictator’s son’s campaign to succeed the equally controversial Rodrigo Duterte as president has created a polarised public and media discourse, from which it is difficult to sift out real sources of anxiety amidst pervasive fears about the next six years. Progressives denounce the Marcos family’s probable return to power as the culmination of a relentless disinformation campaign and misplaced nostalgia, and as a threat to more than three decades of political and economic reforms; whereas Marcos’s overwhelmingly young base of supporters are stoked by the prospect of rebuking what they have been convinced are the incompetence, hypocrisy and prejudices of the post-EDSA political economy.

Unlike Duterte, who as a presidential candidate made clear his priorities of waging a deadly anti-drug campaign and going after what he perceives to be entrenched oligarchic interests, Marcos has shied away from participating in public debates and taking meaningful positions on a range of key policy issues. To assuage concerns over his agenda as president, Marcos would at the onset be likely to roll out a post-pandemic economic recovery plan and assemble a team that includes figures from past presidential administrations, including Duterte’s.

However, the force that ultimately drives Marcos’s ambition and that is likely to become the defining theme of his probable presidency is his desire to rehabilitate the Marcos family name, which has become synonymous with authoritarian excess and corruption in Philippine history. As president, Marcos would likely seek to redress what his family perceives to be historical injustice done to them and their closest associates. The strong mandate he is likely to receive on election day – and the broad coalition he has built to make that possible – would translate to significant political capital and enable him to achieve these aims at least partly.

(Mostly) business as usual, with new winners and losers

Markets appear to be in a wait-and-see mode, bracing for what exactly could come from this extraordinary presidential agenda. Local businesses claim to be broadly confident about mostly business as usual under a new Marcos administration. However, Marcos’s historic election is certain to evoke unfinished feuds, which could manifest in the targeting of elite families and businesses that immediately benefitted from the fall of his father’s regime. Many are wary of how this potentially vindictive agenda could create instability and arbitrary policy that ultimately favour those who have remained loyal to the Marcos family over the last few decades.

Meanwhile, there is no real indication that the business outlook and attitude toward foreign investment would change drastically under Marcos, especially as the requirements of a post-pandemic economy would be sure to take precedence for the next administration. Concerns in some sections of the public around the potential return to authoritarian rule are overstated, mainly because the political economy that Marcos would preside over and the external environment that he would navigate as president are unlikely to accept the curbing of civil liberties in any significant way. The interests of many of the country’s largest conglomerates and industry groups are also represented in Marcos’s broad coalition, which would constrain any temptation to pursue substantial radical policies.

In many ways, Duterte has already tested the limits of what is politically permissible – with his war on drugs, extreme rhetoric against the Philippines’ treaty ally the US, and regulatory shake-ups of various industries, such as telecommunications and mining. Marcos’s presidency is unlikely to be more disruptive than that of Duterte. However, these remain possible outcomes that foreign businesses in the Philippines should prepare for and be ready to explain to their headquarters, investors and other stakeholders in the event of a Marcos victory, when the inevitable “return to dictatorship” headlines would emerge.

Businesses should base decision-making on inconvenient truths

Both supporters and critics of Marcos will agree that the Philippines has long struggled with a fractured and arbitrary style of governance. The silver lining to this is that businesses familiar with the Philippines would have become well used to the chaos that operating in the country can entail. Although such chaos naturally intensifies in the lead-up to and aftermath of a presidential election, the tendency is in practice for power to be shared widely – no matter how polarising the discourse during the election. The country’s weak government institutions have also proven their capacity to control situations even when the problems look unmanageable from the outside. An appreciation of the dynamics through which the Philippine economy copes amidst messy politics is precisely what sets successful ventures apart from those that fail to survive political transitions.

Decision-makers would be wise to be wary of good-versus-evil narratives that find basis in history but disguise inconvenient truths about Philippine governance, which are most relevant to strategic business decisions. Businesses should take this opportunity to identify and monitor the right triggers for risks to their business or sectors, as well as reassess their exposure to legacy issues and links to companies or elite families that could fall target to Marcos’s apparent desire to rectify history as he sees it. Gaining an early understanding of the various informal – but crucial – networks of influence that are now taking shape around Marcos, such as those around his wife, siblings and closest business associates, and knowing where their respective interests lie, will be equally central to this pre-emptive and essential risk assessment exercise.

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