Feud Between Clans Emerges as Risk to One of Asia’s Growth Stars

(Bloomberg) -- The coalition that gave Philippine President Ferdinand Marcos Jr. a massive landslide win in May 2022 is falling apart, raising the risk of political instability that could undermine one of Asia’s fastest-growing economies.

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The disagreements between Marcos and his predecessor Rodrigo Duterte — whose daughter Sara Duterte is the vice president — have played out in an increasingly bitter public spat over the last few weeks. Accusations of drug use. A threat to split the country. Talks of unrest in the military.

At the heart of the dispute though is Marcos’s support for a change to the country’s 1987 Constitution to attract more foreign investors. It has led to suspicions among the Duterte camp that Marcos is seeking to extend his stay in power. Presidents are currently limited to a single, six-year term under the nation’s charter.

A push to amend political provisions “will escalate tensions within the Unity Team, leading to political instability within the country,” said Sarah Tan, economist at Moody’s Analytics Singapore Pte Ltd., referring to the campaign branding used by Marcos and Duterte’s daughter in the 2022 election.

That could lead to a slide in Marcos’s approval ratings and thwart his agenda including boosting investment and expanding defense ties with longstanding ally, the US. Washington has committed to sending a trade delegation this year to Manila, led by Commerce Secretary Gina Raimondo.

“If the situation escalates so far as to a civil unrest because of deepening polarization among the people, we may even see a pullback in investments as foreign companies leave the country,” Tan added.

Marcos’s chief economic planner, Arsenio Balisacan, has warned as much, and said that political instability could hurt the economy — which despite growing below the government target last year notched the fastest expansion in Southeast Asia at 5.6%.

“We’re in a democratic space, so you expect those kinds of debates, but you don’t also expect that kind of debate to take forever,” Balisacan told reporters last week. “It will not do us good,” he said.

Bubbling Tensions

No stranger to bluster, Duterte has warned his successor that he could go the way of his father, the late dictator Ferdinand Marcos, who was ousted in a popular revolt in 1986. The constitution was ratified a year later and limited a leader’s term to prevent another abuse of power.

The 78-year-old former president has also threatened to split his native Mindanao region from the rest of the nation, prompting a stern warning from the country’s defense and security officials.

Even before this latest fallout, tensions between the two camps were bubbling under the surface.

Marcos has shifted the Philippines back to a closer defense partnership with the US, seen as a rebuke to Duterte who had pivoted towards China during his six-year tenure.

There have also been disagreements over confidential funds for Sara, the suspension of a media network associated with a Duterte supporter, and the Marcos administration’s move to restart peace talks with communist rebels.

While she respects the views of her father, “like my position on many issues, I don’t necessarily agree with all of them,” the vice president said last week. Her brother Sebastian, the mayor of Davao City, had called on Marcos to resign.

While Sara Duterte has largely stayed neutral since the spat between Marcos and her family played out, analysts say any changes to political provisions in the constitution may threaten her political future. She is seen as an early favorite to succeed Marcos in the 2028 election. Duterte’s daughter was also the frontrunner in the 2022 presidential surveys until she decided to team up with Marcos and run as his VP.

The ex-president may be right in speculating that the constitutional revision may “change more fundamental aspects of the political system, such as possibly removing term limits, or even shifting to a parliamentary or federal form of government,” said Bob Herrera-Lim, managing director at global advisory firm Teneo.

“This would be risky should public opposition emerge, because it would at the very least be distracting politically and may even increase the risk of a broader backlash,” Herrera-Lim added.

Loyalty check

Over the past year, the 66-year-old Marcos has pushed back against Beijing’s expansive claims in the South China Sea, expanded access for US troops and received security and investment pledges from the US and its partners. He will keynote Asia’s top defense meeting this year in Singapore, indicating Manila’s increasingly important geopolitical role as the competition between the US and China intensifies.

Analysts believe the public feud is distracting and could derail Marcos’s plans as next year’s midterm polls approach. It may even lead to a shift in political alliances as Marcos tries to shore up support.

“Since loyalties will undoubtedly shift among their allies, what Marcos will have to figure out is which support is necessary to stabilize his rule despite a Duterte fallout. The military? the US?,” said Julie Ann de los Reyes, assistant professor at the Center for Southeast Asian Studies in Kyoto University.

“Sara Duterte helped him win the presidency,” de los Reyes said. “But it is becoming abundantly clear that she is not going to help him keep it.”

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