Marcos-Duterte rift seen taking toll on investor sentiment
The ongoing political rift between President Marcos and former President Rodrigo Duterte is considered a significant risk factor, according to the head of a trade group representing aeronautics firms.
John Lee, chair emeritus of the Aerospace Industries Association of the Philippines, told the Inquirer last week that he believes the Philippines will not get any major investors in their industry unless the political situation is stabilized.
“It’s considered high risk now for investors with two executive offices battling it out,” Lee said in a message.
Business as usual
Last week, the country’s largest business organization as well as the government’s main agency in trade and investment promotion said they remain focused on economic growth and investment promotion.
This is despite the arrest on March 11 of Duterte, who was apprehended upon his arrival from Hong Kong and flown the same day on a chartered flight to The Hague, Netherlands.
He is now standing trial before the International Criminal Court for crimes against humanity in connection with his administration’s bloody war on drugs.
Aside from political uncertainties, Lee also expressed concerns over the rising cost of labor in the Philippines, which he said was making it increasingly difficult for manufacturers to remain competitive.
He pointed out that contributions to the Social Security System have now reached 15 percent, adding to the financial burden on employers.
“Our labor cost will soon be not viable unless we automate, which could lead to more unemployment,” he said.
Lee also warned that the proposed mandated wage hike is another major concern for the manufacturing sector.
He stressed that if the measure is approved, it could trigger a significant downturn in the country’s manufacturing industry.
“If that passes, I see a huge plunge in manufacturing here,” he said, emphasizing the need for balanced policies that support both worker welfare and business sustainability.
