By the Business Staff
The removal of Chief Justice Maria Lourdes Sereno by her own colleagues at the Supreme Court has generated mixed reaction from business leaders while the government’s economic team downplayed any negative impact on the country’s economy and on investor’s confidence.
For instance, Finance Secretary Carlos G. Dominguez III believes the controversial decision of the Supreme Court will not affect the country’s current economic condition.
“I don’t think so,” said Dominguez, the Duterte administration’s chief economic manager, said when asked about the possible effect of the decision on the economy.
Along with Dominguez, Socioeconomic Planning Secretary Ernesto M. Pernia said in a mobile phone message that the removal of Sereno is “unlikely” to have an impact on the economy.
Trade and Industry Ramon M. Lopez also expressed confidence that Chief Justice’s ouster will not derail any investments inflow into the country stressing that based on feedback, investors did not raise any domestic political issue.
“Investor confidence stays since they see the strong macroeconomic fundamentals, reforms, infrastructure program and even the recent GDP growth performance that are mainly led by investments and government spending on infrastructure which both indicate more sustained source of growth moving forward,” Lopez said.
Employers Confederation of the Philippines (ECOP) Chairman Ed Lacson said that investors are differently inclined when it comes to their views on the issue.
“Some maybe bothered by the potential political upheaval of the QW [QUO WARRANTO] while others may carry on with business as usual,” Lacson said.
For its part, the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, did not see any adverse impact on the economy and expressed hope on the soundness of the SC decision to oust its own top magistrate.
PCCI Chairman George Barcelon said, “I don’t see much impact in the immediate term. Business community’s trust in the government is still strong. I hope the SC’s decision on QUO WARRANTO is sound and no further debate on the matter. Otherwise there may be prolonged constitutional crisis that may give concern.”
“I don’t think Sereno’s ouster affects business. Investors whether local or foreign consider it more of political/judicial exercise which has no impact on their business even if they disagree with what happened,” said Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation of the Philippines.
For its part, the Makati Business Club was dismayed over the way the way the Chief Justice was removed from office.
“We believe the impeachment process would have better exhibited the adherence to rule of law that gives confidence to investors and all citizens,” MBC said in a statement aired by a television network. However, MBC added, “The Supreme Court is the final arbiter of all constitutional issues.”
MBC then called on President Rodrigo Duterte to maintain high standards in upcoming and future appointments in the judiciary.
MBC co-vice chairman Roberto De Ocampo was also quoted in the same TV program that if Sereno gains support, this could create stability concerns from investors, but if not, investors may be prepared to move forward and continue on their decision making.
Jose Luis Yulo Jr., president of the Chamber of Commerce of the Philippine Islands, said, “Ongoing business activities and on stream in the immediate short term will likely continue, albeit business is shaken by how the impeachment process was not followed.
The impact in the middle and long term will depend on the happenings that can unveil in the coming days and months, he said.
“If businesses, both foreign and local, feel or believe that the stability of the 3 co-equal branches of government is no longer balanced and that both the Judiciary and Congress are subservient to one branch then businesses will be restrained, and foreign investments will shift to our ASEAN neighbors.”
Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines, said they are still confused over the SC decision.
“So far, the only reaction has been a bit of confusion over the process. We are waiting to see the ramifications,” he said.
Christina Ulang, head of research at First Metro Investment Corp. (FMIC), one of the largest investment banks in the country, said she doesn’t see the SC decision “undermining” business confidence but will just be “viewed by business as just part of the usual political noise and will blow over.”
Instead, she said that what is critical right now and may affect the economic reform pace are calls in Congress to suspend Tax Reform for Acceleration and Inclusion (TRAIN).
“This is what’s going to weigh on sentiment because it will derail reforms and growth. More importantly we may not be upgraded to triple B+ by rating agencies which is already in the horizon given the rating outlook upgrade to positive by Standard and Poor’s,” Ulang said.
First Grade Finance Inc. Managing Director Astro del Castillo agreed to this, saying “investors continue to ignore the political events.”
He observed that, “most are focused on the improving fundamentals of the economy. Only a serious threat in the political environment can shake investor confidence.”
An energy industry player, who refused to be quoted, said that “Judicial interventions, regardless of the sitting personalities, are the biggest headaches we have in the energy sector”.
“They cripple not just investment flows, but also drive for innovations and policy reforms – that’s the area where investors would prefer to be addressed. We invest according to the rules of the game, we prefer not to meddle in the political aspect of things,” the source said.
It could be noted that dozens of cases involving the energy sector are now pending at the Supreme Court, including that of Retail Competition and Open Access (RCOA), a policy reform that shall be bestowing true-to-form choice on consumers as to their preferred electricity suppliers and at a per kilowatt-hour cost that fits their budgets.
On the export level, Semiconductors and Electronics Industries in the Philippines Inc. (SEIPI) President Dan Lachica said he doesn’t see the ouster having immediate effects on the goods the country sells abroad. (Chino S. Leyco, Bernie C. Magkilat, James A. Loyola, Madelaine Miraflor, Myrna V. Velasco)