Return to 'the good old days' in the Philippines?

On May 9th, the Philippines will vote for a new president. The front-runner and likely next president is the son of Ferdinand Marcos, the president/dictator that ruled the island for nearly two decades in the 1960s, ‘70s and ‘80s. The Marcos era was a dark period for the country’s democracy, with high level corruption and a crackdown on individual freedom that ultimately resulted in martial law. Ferdinand Marcos Jr., known as Bongbong, is well ahead in the polls. He has equated his father’s rule with stability and nostalgically spoken about price controls on food and fuel, saying it is better for Filipinos to decide the price of gas and other commodities, not outsiders. These were disastrous policies of his father’s regime that led to high deficits and debt levels. There is some voter sympathy for ‘the good old days’. Interestingly, Sara Duterte, the daughter of the current president, is Mr. Marcos’ running mate. There has so far been little in the way of economic policy from the ticket, but the hope is that her presence translates to policy continuity. Although President Duterte is well known for his outspokenness, he has also overseen a revival of investment in the country, with investment/GDP up to 25% pre-Covid after over a decade of low investment levels. As the country re-opens after intermittent Covid lockdowns, the IMF is forecasting GDP growth of >6% per annum in both 2022 and 2023, placing the Philippines in rare company. We do not believe the election will derail this positive outlook. After underperforming in 2021, Philippine equities are off to a good start in 2022, down only 2.8% vs the MSCI EM index’s 11.8% fall. We believe this streak will continue