As President Ferdinand “Bongbong” Marcos, Jr progresses through his second year in office, we look at key policy developments over the past year and what they mean for the Philippines as an important regional player over the coming years. 

  • Marcos’s first year in office has been marked by a focus on easily achievable reforms, with a concerted effort to attract foreign investments, especially targeting sectors like renewable energy, infrastructure and mining.
  • In terms of foreign policy, Marcos’s calculated personnel choices ensure more predictability compared to his predecessor’s term, but with strategic re-alignments such as granting the US military base access tempting tension with China.
  • Nevertheless, political intricacies remain at play, with the looming 2025 midterm elections potentially disrupting the president’s political coalition and a particular concern around the highly contentious Maharlika sovereign wealth fund.
  • Critical sectors like business process outsourcing face considerable challenges, while the country’s place in the electric vehicle (EV) revolution also remains ambiguous.

Scoring easy wins

When the Marcos family returned to the Malacañang presidential palace on 30 June 2022, many anticipated a rerun of a familiar political script. Yet the subsequent moves by the administration appeared refreshingly agile and singularly focused on the economy, with its inaugural year characterised by efforts to rejuvenate business confidence and jumpstart easily achievable reforms. Marcos himself became something of a jet-setter, embarking on 12 international working trips with a contingent of the country’s top business leaders. On these trips, Marcos peddled a revitalised vision of his country dubbed “Bagong Pilipinas” (or “new Philippines”) to eager boardrooms and state halls alike.

The response from international business communities has so far been positive, particularly regarding steps the government has taken to open up sectors with immense potential, such as renewables. Prior to the change in government, the domestic energy landscape had resembled a squabbling schoolyard, thanks to ego clashes among the regulatory top brass. This chaos set the stage for Raphael Lotilla, Marcos’s handpicked green energy czar, who leans more towards pragmatic action than turf wars or red tape. Among his notable shifts: a policy greenlighting comprehensive foreign involvement in renewables, implementation of a competitive green energy bidding process and rollout of an ambitious Philippine Offshore Wind Roadmap, which has identified 178 GW of technical potential in total. 

Marcos’s adoption of a “less is more” approach in his interactions with the private sector has also been warmly received by both local tycoons and foreign investors, many of whom are still nursing flashbacks from the tempestuous presidency of Rodrigo Duterte (2016-22), when regulatory mood swings and capricious presidential meddling in private business were the norm. Concerns that Marcos might dance to a similar tune, especially with business figures not singing his political notes, have so far not materialised. Similarly, the domestic mining sector, previously stifled under consecutive presidential administrations, is finally free to woo international investors and tap into resurging global demand for nickel, copper and gold, of which the Philippines boasts among the world's largest proven reserves.

Meanwhile, the president’s legislative agenda, for the most part, has been unremarkable, zeroing in on mundane bureaucratic housekeeping, such as an excise tax on single-use plastics, value-added tax (VAT) on digital services and reforms on pensions and government procurement, which local and foreign businesses do not seem to mind. The exception to this is the creation earlier this year of the contentious Maharlika sovereign wealth fund, which has left both the president’s critics and supporters questioning the prudence of establishing such a fund for a nation grappling with swelling debt. 

Making new friends, keeping old ones 

Perhaps the most striking pivot under Marcos has been in the realm of foreign policy, which has garnered him unexpected accolades and friends, especially from the West. With the unpredictable proclamations that typified Duterte’s foreign policy now consigned to quips about what used to be, Marcos has charted a steadier course by taking a “friend to all” stance and enlisting the widely respected career diplomat Enrique Manalo as his foreign secretary. Meanwhile, Duterte's former chief diplomat, Teodoro “Teddy” Locsin, has been deftly repurposed as special envoy to China – a move seemingly designed to offset the former president’s continued unofficial forays to Beijing and minimise the potential fallout from deepening military ties with the US. As temperatures rise in the Taiwan Strait, Marcos made headlines this February by authorising US access to an additional four Philippine military bases under the Enhanced Defense Cooperation Agreement (EDCA). The details of this access are still under negotiation with the US, thrusting Marcos onto the main stage of regional security dynamics. 

With this auspicious start to his six-year tenure, Marcos seems to be on the cusp of completing his family’s redemption saga, one that has spanned nearly 35 years since his father, the former dictator Ferdinand Marcos (1965-86), was ousted in a bloodless revolt. Although the spectre of a grand Marcos restoration initially aroused apprehensions, the bottom line for foreign businesses and governments is that the younger Marcos is evidently on a mission to rewrite his family's legacy through a display of statesmanship and competence.  

However, with Philippine history often casting its favour to the triumphant, the next litmus test awaits in the 2025 midterm elections, where legislative and local positions are up for grabs. Ahead of that, the political chessboard could see Marcos’s allies weighing their options between remaining in his broad political coalition or rallying behind a new one led by Vice-President Sara Duterte-Carpio, especially as her father's charisma still resonates deeply. Key to this objective of keeping old friends is an accommodation strategy that caters to the preferences of entrenched political incumbents throughout the archipelago. Yet, given the country’s persistent struggle with government malfeasance and regulatory capture, this approach might not bode well for the country’s long-term risk profile. Notably, there has been diminished emphasis and demand for anti-corruption efforts now compared to a decade ago. 

The next five years 

Businesses are keenly watching Marcos’s unfolding presidency. For one, there is a palpable commitment on his part to keep delivering positive economic headlines, hoping to galvanise foreign investment and write his legacy. The sectors poised to benefit most prominently in this regard are renewable energy, mining and infrastructure development, with a significant emphasis on public-private partnerships. On the foreign policy front, stability seems to be the watchword. Although Marcos is threading a fine line, he is notably circumspect when it comes to maintaining harmonious relations with his country’s largest trading partner, China. 

Nevertheless, there are evident vulnerabilities in Marcos’s risk-averse grand strategy. Two critical sectors for the country, overseas remittances and business process outsourcing, face significant challenges. The former grapples with a decelerating global economy and labour market, while the latter is confronted by the disruptive potential of advanced language models, threatening job security for millions. Additionally, as regional peers rush to capitalise on the global EV surge, Marcos’s plan on this front remains ambiguous. While the stability and practicality promised by his leadership are undeniable, the effectiveness of his policies and feasibility of his vision at such a crucial time will ultimately determine if the Philippines can emerge as a pivotal regional player or remains entrenched in the same old challenges of the past. 

This article is based on a research note originally published in Seerist. Find out more about how Seerist’s adaptive artificial intelligence combined with localised geopolitical risk expertise can help you identify, monitor and mitigate risks. 

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