Political noise and the economy

“Uncertainty is not a good thing,” JP Morgan Chase CEO Jamie Dimon remarked when asked about the direction of the American economy.  For America, its biggest economic threat is the chaos sown by an unpredictable White House, a New York Times opinion piece observed.

The business sector is allergic to political risks. Investors want as much certainty as they can get. They don’t want black swans or unforeseen events with grave consequences. In America where the political climate is more or less stable for decades up until the Trump era, they are not as used to political black swans as we are in our third world country.

Zanny Minton Beddoes, editor-in-chief of The Economist, reports from New York that the mood among the business leaders and financiers she had spoken to is not so sunny. “In private, at least, there seems to be growing concern about where America is heading under Mr. Trump… It is dawning on some of the denizens of Wall Street that the revolutionaries in the White House may do serious damage.”

Political risk has also increased here in the Philippines over the past week. But it is not likely to seriously affect the trend of local businesses. SM will still go ahead with plans to add 205,400 square meters of new retail space and redevelop 124,488 sqm of existing areas and focus on large scale events. SM will likely breach their record 5.2 million visitors per day regardless of what political repercussions we end up seeing with BBM’s decision to send Duterte off to The Hague.

Not too many of us really thought the day would come. Much less, expected the near flawless execution of arresting Duterte and sending him off. Sure, it took 12 hours before Duterte finally agreed to board the chartered Gulfstream private jet but he did board the plane and there was nothing that his supporters could do about it.

To the credit of the PNP and the senior officer on top of the operation, General Nicolas Torre III, the job was done with determined precision including crowd control outside the gates of Villamor Airbase. Of course, this happened only because BBM decided the time was ripe for it to happen. It was professionally carried out not only by the PNP but also by other government agencies that provided cover.

This means BBM weighed the pros and cons and concluded it had to be done. BBM must have considered the ability of the Dutertes to instigate civil disturbance. How will this affect the May election? There is the danger of Duterte presenting himself as an oppressed underdog and the Pinoy masa love supporting underdogs.

On the other hand, many Filipinos may be simply glad it has come to this as a warning for future leaders. According to Dr. Mahar Mangahas of the Social Weather Stations, “the investigation by the International Criminal Court has public support. The four polls about the ICC investigations of drug-related killings during the administration of Rodrigo Duterte, two each in 2023 and 2024, all found high approval. The latest one, in June 2024, found approval at over two to one.”

Additionally, on the question of the Dutertes still enjoying widespread support, Dr. Mangahas also pointed out that “the impeachment of Vice-President Sara Duterte is relatively popular. Last December, half of Filipino adults already knew about the impeachment complaint against her. A plurality of them agreed with it. The unexplained use of confidential and intelligence funds topped the people’s grounds for impeachment.”

Some are saying it was wrong to have Duterte tried by the ICC because it is an admission that our judicial system is not up to it. But it truly isn’t. Can our judicial system honesty make Duterte take accountability? It’s time we admit the reality of our judicial system’s inadequacies. Maybe the shame and embarrassment will spur it to reform.

Even investors hesitate to risk capital here because they know getting a fair deal from our judiciary is an iffy proposition. All the tax incentives will not be able to overcome the fear of being potentially victimized by the best judicial system that money can buy.

Thinking about the day’s event as the chartered Gulfstream jet took off, I saw a Marcos Junior acting like the original Marcos. When push comes to shove, BBM showed decisiveness many of us didn’t think he was capable of. If only he could be as decisive in tackling the many problems the nation is facing now, the rest of his term may yet be more fruitful than many of us thought possible. Let’s start with the right-of-way problems plaguing our infrastructure development.

The next reckoning point would be the May election. BBM needs a Senate that would favorably vote on the Sara Duterte impeachment. If the different surveys are any indication, BBM has to work harder to make that happen.

Shutting out the Duterte Senate slate is too much to expect. But the election is close to two months away and many things can happen between now and then.

The public mood, as the trial in The Hague unfolds, has political risk implications on our country’s economy. For now, all that political noise is certainly turning potential investors away. But that doesn’t matter much. Very few investors have us on their radar screens precisely because they have always been afraid of our excessive politics, faulty judicial system and the high political risk all that creates.

For us ordinary Pinoys, the political theater has never been as exciting as it is now. That’s not good for business but we all get entertained. My Facebook algorithm is now showing a lot of advertising on how to get a Schengen Visa to visit The Netherlands.

We are living in an era only journalists can love.

Boo Chanco’s email address is bchanco@gmail.com. Follow him on X @boochanco