Economic reforms are expected to proceed, even as the political noise amplified by the midterm election results that "weakened" the Marcos administration's hold on power may hamper efforts to enhance public-sector effectiveness, according to the Economist Intelligence Unit (EIU).

"Partial and unofficial results from the midterm election in the Philippines on May 12 indicate a decrease in the political capital of the President, Ferdinand 'Bongbong' Marcos Jr., in the 24-member Senate," noted EIU Asia analyst Kalyani Honrao and Asia-Pacific regional director Alex Holmes in a May 13 report titled "Philippine midterm election weakens President's position," obtained by Manila Bulletin.

EIU cited that more candidates allied with former President Rodrigo Duterte and his daughter, Vice President Sara Duterte—plus a couple who are affiliated with neither the Marcos nor Duterte administrations—joining the Senate in July "will effectively erode the influence Mr. Marcos exerts" on the upper chamber of Congress.

"Even so, the President's allies will maintain their majority in the Senate, and EIU does not expect a significant deterioration in political stability or policy effectiveness as a result of the outcome," it said.

While this would allow President Marcos to finish his six-year term in 2028, EIU said that "the failure of either camp to achieve an emphatic victory means that the political temperature will remain high in the ongoing feud between the camps of the current and former presidents."

"The potential inability of Mr. Marcos to dominate the Senate means that Sara Duterte... should be able to find the nine Senate votes she needs to avoid the impeachment proceedings against her," EIU said, predicting at least seven votes for her acquittal, and another seven senators in the 20th Congress who would likely vote to remove her from office.

For EIU, "the comeback narrative of having defeated impeachment would raise Ms. Duterte's chances at the next presidential election in May 2028."

Back in March, when the elder Duterte was arrested and brought into the custody of the International Criminal Court (ICC) for alleged crimes against humanity committed during the deadly "war on drugs" at the start of his administration, EIU warned that such "could have negative repercussions on public support for the incumbent President, since it comes at a time when political rivalry between the Marcos-Duterte camps is intensifying ahead of the midterm elections."

Back then, EIU expected the Marcos administration to retain control of the political landscape, including the midterm polls.

But with actual votes showing the contrary, EIU is watchful of the Philippine political situation, especially the Vice President's impeachment trial, which it expects to be stretched until late this year.

Moving forward, "government effectiveness is unlikely to deteriorate significantly, but disruption caused by political feuds will remain a recurrent feature," EIU warned.

Even as the President "can still count on a majority of support in Congress," EIU cautioned that "the main risk is that senators could use their increased leverage to lobby for 'pork-barrel' projects, leaving less money for infrastructure and social services."

"In the previous budgets proposed by Mr. Marcos, substantial cuts were made to spending on public healthcare insurance, the military, and required counterpart funding for foreign development aid projects. Some of the funds were allocated instead to areas typically associated with opaque processes and corruption (such as flood control structures)," it noted.

This would also mean that "the business-oriented reform agenda will continue at a gradual pace," EIU said.

EIU expects the new tax incentives regime, simplified value-added tax (VAT) refunds, as well as the "Build Better More" (BBM) infrastructure development program to be the current administration's priorities to improve the investment climate.

"Poor infrastructure remains one of the main impediments to doing business in the Philippines," it pointed out.

As Manila Bulletin reported earlier, EIU sees the Philippine economy outperforming Southeast Asia and expanding by 6.1 percent this year, within the government's target range of six to eight percent gross domestic product (GDP) growth.

In particular, EIU is cautiously optimistic that the Philippines would be a "bright spot" in 2025 due to the relatively smaller exposure of its goods and services exports to global trade amid headwinds wrought by United States (US) President Donald Trump's tariff spree.