President Marcos' directive for Cabinet resignations has sparked a mix of hope and apprehension in the local financial market, as some view it as a necessary step toward improved governance and economic performance, while others are concerned about potential market volatility during the transition.

However, initial indications suggest stability within the administration’s economic team. The influential Makati Business Club (MBC) has called for President Marcos to keep his economic managers and other "efficient" department heads. 

MBC officials believe most of the current Cabinet should stay, citing their strong performance in enacting policies that bolster the economy.

Meanwhile, Finance Secretary Ralph G. Recto stated he submitted his courtesy resignation "without delay or reservation." Similarly, Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan expressed his willingness to step down if the President deems another individual more suitable. 

"If deemed necessary, I stand ready to hand over the leadership to someone the President believes can better drive our nation's development goals," Balisacan said, confirming his compliance with the resignation order.

Budget Secretary Amenah F. Pangandaman also submitted her resignation as requested by the president.

For Energy Secretary Raphael P.M. Lotilla, who also tendered his resignation, "the midterm is an excellent opportunity for taking stock and re-energizing the government’s efforts to serve our people better" as he said the Department of Energy has also been "reviewing the administration’s accomplishments in the energy sector thus far and at the same time reviewing the challenges that still need to be addressed."

Transportation Secretary Vince Dizon, who was just appointed in February, said he tendered his resignation to support the President’s move to realign the government with the people’s expectations.

Meanwhile, Agriculture Secretary Francisco Tiu Laurel said he will leave it to the President’s judgment to determine whether he will retain his role as head of the agency after submitting his courtesy resignation.

Trade and Industry Secretary Cristina Roque, for her part, said she places her full trust and confidence in Marcos and the direction he will take in running the country.

President to decide on Cabinet fate

With the resignations in hand, President Marcos will now exercise his prerogative to accept, reassign, or replace some members of his Cabinet, sources said.

For the economic team, work will continue until such time that the President decides to keep or replace them.

Despite the apparent stability in the economic team, stock market players remain hopeful that the President's directive will catalyze much-needed reforms to boost the economy and foster inclusive growth. This optimism follows the country's weaker-than-expected first-quarter growth of 5.4 percent. 

The end-March growth figure was a slowdown from the 5.9 percent growth in the same period last year and falls below the government's target range of six percent to eight percent.

"The President’s directive for all Cabinet secretaries to resign appears to be a strategic move to reassess performance and realign priorities after the midterm elections. It signals a push for greater accountability and results within the administration," said Jonathan Ravelas, senior adviser at Reyes Tacandong & Co.

Rizal Commercial Banking Corp.'s (RCBC) chief economist, Michael L. Ricafort, noted that performance-based reviews and cabinet reshuffles are common in past administrations.

“This sends a good signal to the market on the willingness to bring about positive change in an effort to become more effective in delivering more results or accomplishments and be more responsive to the needs of the people," he stated, highlighting the importance of lowering prices, creating jobs, strengthening the rule of law, and fostering inclusive economic growth.

Biz groups await new Cabinet

Business groups are also awaiting a favorable decision from the President.

In a statement, the Management Association of the Philippines (MAP) said President Marcos’ call to overhaul his Cabinet is a testament to his leadership and accountability in “driving progress and delivering meaningful results.”

“We hope the President will find the appropriate talents for those he decides to replace—people who can effectively execute his government's plans,” MAP president Alfredo Panlilio said.

The Philippine Chamber of Commerce and Industry (PCCI), meanwhile, expressed optimism that such appointments will be done immediately to avoid “political instability and so as not to derail economic continuity.”

PCCI said it found Marcos’ call for the courtesy resignation of his secretaries as “quite surprising” given that government has been managing the economy well.

“It is just unfortunate that economic growth has been undermined by developments at the political front that have drastically brought down the public's approval rating of the president,” the group said.

Economic team’s support

The economic managers, in separate statements on Thursday, May 22, expressed their "full support" for the President’s directive. 

Pangandaman said that the best interests of the Filipino people guide the President’s decisions, while Recto acknowledged the President’s burden in navigating complex global and domestic challenges.

This bold decision was made with his desire to put people and country first,” the Finance chief said. He also reiterated, "That I serve at the pleasure of the President is a thought that has never been lost on me from the day I assumed office." 

Pangandaman, meanwhile, affirmed her commitment to supporting the President's leadership with "integrity, transparency, courage, and compassion."

“We at the Department of Energy (DOE) and its attached agencies are one with the President in working together to realize a future for all Filipinos where energy is accessible and affordable, reliable and resilient, and clean and environmentally sustainable,” Lotilla, for his part, said.

On the other hand, Ricafort outlined key challenges facing the government, including attracting foreign direct investments, lowering electricity costs, reducing business costs, stabilizing commodity prices, addressing corruption, improving governance, narrowing the budget deficit, enhancing tax collection, and optimizing debt management.

With this Cabinet reset, addressing the looming United States (US) tariffs may prove challenging, as it will likely require a more coordinated approach, according to Ser Percival Peña-Reyes, director at the Ateneo Center for Economic Research and Development (ACERD).

“We need a solid, closely coordinated Cabinet to navigate us through uncertain times brought about by tariff wars and other external problems. Revamping at this stage only brings more uncertainty, and those who will fill in positions might be left groping in the dark,” he told Manila Bulletin.

Uncertainty, market reaction

Stock analysts also expressed concerns regarding the potential uncertainty during the transition period. 

“It's a big move by the President, but at the same time, it leads to a lot of questions. Is the solution to the problem really the changing of cabinet secretaries? Why does it have to be all cabinet secretaries? The succeeding ones, are they going to perform better?” asked Philstocks Research Manager Japhet Tantiangco.

He noted that the move could negatively impact the market due to the resulting uncertainty.

Wendy Estacio-Cruz, Research Head at Unicapital Securities Inc., viewed the directive as a strategic effort to "reset his administration’s direction in light of disappointing election outcomes and growing public frustration." 

While acknowledging its potential for administrative renewal, she said that its effectiveness hinges on the retention of key personnel and the implementation of tangible reforms. 

"Without those tangible results, it risks being perceived as just another political reset rather than a serious effort to reform governance," she noted.

Malacañang announced that President Marcos's request for courtesy resignations aims to "realign government with the people’s expectations." The President emphasized a shift away from "business as usual," highlighting the public’s demand for results and the administration’s commitment to addressing their concerns. 

The move is seen as a "decisive move to recalibrate his administration following the results of the recent elections," where allied candidates secured fewer Senate seats than anticipated. The resignations will allow the President to "evaluate the performance of each department and determine who will continue to serve in line with his administration’s recalibrated priorities."