Impeachment raising PH risks – BMI analysts

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The Impact of Impeachment on the Philippines' Outlook BMI Analysts Weigh
Weigh In

As the impeachment case against Vice President Sara Duterte gains momentum,
momentum, BMI analysts are sounding warnings about potential risks to the P
Philippines' outlook. According to Brandon Ong, country risk analyst at BMI
BMI, political risks and social polarization have increased as the power st
struggle between the Duterte and Marcos camps intensifies ahead of the 2028
2028 presidential elections.

Rising Government Risk

BMI acknowledges that government risk is gradually increasing, although it 
remains below levels seen during the latter part of former president Rodrig
Rodrigo Duterte's administration. Ong explains that social polarization ris
risks are also rising since the House of Representatives began formal impea
impeachment hearings against Duterte in late March.

Credit Outlook at Risk

Ross Schaap, head of political science at BMI, warns that rising political 
tensions could eventually affect the country's credit outlook if impeachmen
impeachment proceedings lead to turmoil. If impeachment leads to convictio
conviction and results in social unrest, that will weigh on investor sentim
sentiment, he says. However, Schaap emphasizes that this remains a low pro
probability risk for now.

Investor Sentiment

BMI analysts caution businesses and foreign investors to closely monitor po
political developments. While current conditions do not yet warrant reducin
reducing exposure to the Philippines, Schaap notes that concerns will likel
likely intensify if impeachment proceedings trigger prolonged protests or v
violent unrest.

Philippines' Credit Profile at Risk

Fitch Ratings recently lowered its outlook on the Philippines to negative
negative but affirmed its investment-grade BBB rating. A negative outlo
outlook signals an increased risk of a ratings downgrade over the medium te
term, which could be triggered by weaker confidence in medium-term growth, 
a rise in government debt or a worsening external position.

Key Takeaways

Political risks and social polarization are increasing as impeachment pro
proceedings against Vice President Sara Duterte intensify.
Government risk is rising gradually but remains below levels seen during 
Rodrigo Duterte's administration.
Credit outlook at risk if impeachment leads to conviction and results in 
social unrest.
Investors should continue monitoring political developments closely.

Stay informed about the impact of impeachment on the Philippines' outlook b
by staying ahead of the curve.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.