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Thoughts for Investors: Bongbong Marcos Wins the 2022 Philippines Elections in a Landslide
Bongbong Marcos has won the 2022 Presidential elections in a landslide. Some key takeaways and thoughts for investors to consider.
Like many people nowadays, I don’t spend much time looking at my Facebook feed anymore. When I did late last night, I noticed that a friend (a member of a Filipino political clan that has produced a number of politicians and even a President or two) had posted a meme about moving to Canada. That’s when I remembered to check the 2022 Presidential election results and saw that Bongbong Marcos was winning in a landslide.
To be honest, I was not at all surprised. I had seen enough pictures of Leni Robredo rallies from Filipinos in my Facebook feed with her supporters (“kakampinks”) decked out in pink (minus the vagina hats…), the glowing local or foreign media coverage of her and her celebrity supporters to figure out who was going to win that election...
With the elections over, I commented to a Filipino Facebook friend how I was now waiting for my feed to be once again filled with angry educated upper class Filipinos suffering meltdowns and insulting the masses for having the audacity to vote, rightly or wrongly, for the unapproved [Marcos] candidate (then I asked what's the Tagalog word for "Deplorable…”) His reply:
I’m seeing it already. The closest I could think of would be “bobo” or “inutil”
But let me digress: Its easy to fall into the trap of being cynical about the Philippines. Some years ago after Noynoy Aquino (son of assassinated Benigno Aquino and President Corazon Aquino) was elected President, I had written a Seeking Alpha piece (A 'Damaged Culture' No More? An Investing-In-The-Philippines Reality Check) with the title based on the controversial essay written by James Fallows for the Atlantic Monthly entitled: "A Damaged Culture: A New Philippines?"
Fallows had written the article not long after the Marcos family fled into exile. Its still a good read because some things about the Philippines never changes and there is one person who is sort of the epidemy of the “damaged culture” he wrote about. That person would also be the subject of The Kingmaker documentary:
NOTE: The whole film can be watched on Vimeo here and is well worth watching:
When Nonoy Aquino had finished his presidency and died in 2021, I remember asking another Filipino Facebook friend what, if anything, did he do as President for six years. The response I got was the sort of mumbo jumbo that would surely send a thrill up the leg of any WEF member or IMF economist; but not for your average Filipino struggling to survive on $1 or $2 a day.
In his defense though, the low-key Noynoy apparently tried to run as clean of an administration as possible for a country like the Philippines. He mostly avoided the sorts of allegations and controversies that plagued his predecessor “GMA” and successor Duterte. But very little seemed to get done to improve the lives of the $1 to $2 a day crowd - like actual (and badly needed) infrastructure construction (Perhaps because nobody was getting their palms greased?)
Then the controversial but charismatic Rodrigo Duterte got elected. My Facebook feed was soon inundated with the sort of daily meltdowns from (upper class) Filipinos that we also saw from certain quarters during the four years Trump was President - especially when Duterte launched his violent war against drug dealers.
Like it or not, Duterte’s drug war strongly appealed to the $1 to $2 a day crowd and the lower classes (I noticed the dichotomy in my own Facebook feed) - even as they often bore the brunt of it. Then again, its the $1 to $2 a day crowd (just like the working class or working poor in the USA) who suffer the most from the effects of drug use on a society and the crime that goes with it.
Philippine Election 2022: Key Takeaways
With the above said, here are some Philippine Election 2022 takeaways (NOTE: Many of these takeaways were just posted by a Filipino Facebook friend and I have modified or expanded on them):
The “Yellow narrative” vs the “Marcos dictatorship narrative” is dead and will never triumph as another campaign strategy. Most Filipinos are too young to remember the Marcos dictatorship, EDSA 1 or even EDSA 2 (against President “Erap”).
In the Philippines, the Presidential and Vice President candidates can come from different parties. After experiencing a President with incredible approval ratings from the masses paired with a VP from the elite that kept opposing (or sniping at) him, the masses made sure to elect a VP that has the back of the commander in chief and not the elite.
Filipinos may love their “chismis” (gossip, rumors or chit-chat) but like voters everywhere, they do not appreciate negative campaigning - even if it’s packaged as the truth or facts (aka about the Marocs dictatorship). Politicians still need a CLEAR message of what they are going to do for voters and preferably one that broadly appeals to the non-educated, non cosmopolitan and non-middle class crowd. Just ask President Hillary Clinton…
Polls, media or celebrity support, and Google Trends all continue to largely be a mirage or a meaningless joke (and are all probably being manipulated or rigged). Again, ask President Hillary Clinton…
On the other hand, Social Weather surveys of the masses in the Philippines are more credible and reliable.
Bloated rally turnout numbers of pink clad educated cosmopolitan middle class white collar types don’t mean anything in a third world country like the Philippines where most people are struggling to earn a few dollars a day.
For better or for worst, social media continues to play an outsized role in politics everywhere.
However and like Twitter everywhere, Twitter Philippines is it’s own (remote) island far away from reality while Facebook Philippines might be better as it has more users. However and aside from the comments section for news articles, how much real interaction is there between the social classes or people who disagree on any social media platform these days?
The Philippines uses the Smartmatic voting system. I will direct readers to Smartmatic’s Wikipedia page and specifically to the Philippines Controversy section regarding its use...
Some things never change in the Philippines as Mindanao is still a hotbed of political violence in every election, and political dynasties are just as entrenched as ever throughout the country.
“Forgot to add: the level of fanaticism attached to a political personality is cultic and exceedingly toxic. Hence the need for a shift, that we follow and support political parties based on platforms we gravitate towards…” In the Philippines, political parties are weak and politics tends to be relationships (often between political families) of mutual convenience. Its the family political dynasties and their relationships with each other that matter most and he or she who has the gold (and gives it away) tends to get elected. There’s long been talk of changing the Philippines from a federal system to a parliamentary system (charter change or “cha cha”), but good luck getting that to happen and without creating a whole new set of (unforeseen) problems.
What sort of Presidency can we expect from Bongbong Marcos? To me, he comes across as another Nonoy Aquino - a bit of a technocrat lacking the charisma of his parents Ferdinand and Imelda along with Duterte’s seeming instability and Trump-like outrageousness. It will also be interesting to see WHO Marcos surrounds himself with in his administration and inner circle.
That leads me back to two chismis I had heard many years ago in the Philippines that touches on some of what James Fallows had written about Filipino culture:
Someone who’s family had been part of the Marcos inner circle (merely as aides) told me the Marcos family (as in the sorts of family, relationship and marital problems they had) were just a normal family - except for Imelda… To put it mildly about her ostentatiousness, she was the outlier…
I had once heard someone who was part of GMA’s inner social circle make a comment complaining about “some of the people she surrounds herself with…” They (some of them were her own family members) were often the source of the controversies that plagued her administration and continue to surround her…
What Do the 2022 Philippines Elections Mean for Investors?
For most foreign and especially American retail investors, Bongbong’s election will not mean much of anything since there are so few easy ways to directly invest in the Philippines (albeit many big American MNCs like Coca-Cola and P&G have long standing ties the country and would derive a noticeable percentage of their revenues from there). There is a list of Philippines ADRs along with some investing or news resources here (the stock table will be updated soon) and ETFs here.
Of the main ways for retail investors to invest in the Philippines, the iShares MSCI Philippines ETF (NYSE: EPHE) is back to where it was in August (but its hardly the only emerging market ETF that’s been loosing ground):
Telco giant PLDT Inc (NYSE: PHI) has performed better, but investors need to keep in mind that its also a BPO-outsourcing play and thus has exposure to the US-global economy and American politics:
NOTE: I should point out that PLDT dates back to the American commonwealth period and it came under the control of Ramon Cojuangco, a cousin of Cory Aquino, in the late 1960s before being seized by Marcos during the martial law period. Ramon Cojuangco's son, Marcos Antonio "Tonyboy" Cojuangco, then got it back after Cory came to power…
Most other major Philippine stocks with OTC listings are actually listed entities of closely controlled family run conglomerates. How they might fair under a new Marcos Presidency may depend upon the owning family’s relationships with the Marcos family.
The Bottom Line for Investors
The Philippines has its share of disadvantages as well as advantages which I had discussed in the past (A 'Damaged Culture' No More? An Investing-In-The-Philippines Reality Check and The Philippines: More 2 Steps Forward And 1 Step Back?) e.g. an economy fueled by remittances and the BPO-outsourcing industry. Then again, remittances and outsourcing have not helped Sri Lanka all that much as its now mired in political and economic crisis.
Given how most governments right now (especially the Western ones) are in a race to the bottom to see who can outdo each other with corrupt incompetence, outright economic malfeasance and self-destructive policies, we are in a world of “pick your poison.” Thus, its too early to speculate on what sort of poison, if any, another Marcos in power might bring to the Philippines.
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Africa, Central Asia, Emerging-Eastern Europe & Latin America ADR, ETF & closed-end fund list pages are updated (April 2022). Asia lists are being updated now (May 2022). For the full lists of emerging market ADRs, ETFs and closed-end funds that have already been updated and a site map, see:
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