BMI Research scales down political risk rating of Phl

MANILA, Philippines -  BMI Research has downgraded the political risk rating of the Philippines as President Duterte declared martial law in Mindanao in light of the series of attacks made by the Maute Group in Marawi City.

“We have downgraded the Philippines’ short-term political risk index score to 63.1, out of 100, from 63.5 previously,” BMI Research said.

The terrorist organization which ascribes itself to the Islamic State clashed with security forces during an attempt by the military to capture Isnilon Hapilon, a leader of another militant group Abu Sayyaf. 

According to the government, Hapilon is a point man for the Islamic State in the Philippines and has been working together with the Maute leaders. 

Following the declaration of martial law, the government mobilized attack helicopters and special forces on May 25 in an attempt to retake Marawi City which had been held by the militant group for two days.

The latest military deployment has resulted in over 46 casualties on both sides, and marks an escalation of the security situation in Southern Philippines.

Meanwhile, President Duterte has also threatened to impose martial law across the country once again in order to combat the rise of the Islamic State in the country. 

“However, we do not see this as a prelude to a return of dictatorship in the  Philippines or expect this to have a significant impact on the country’s economic growth outlook,” it said.

Financial markets reacted negatively to the news, with the peso briefly touching support at 50 to $1 on May 24, but have since recovered. 

“We maintain a relatively constructive view on the Philippine peso relative to emerging market foreign exchange forecasting the unit to end the year at 50 to $1,” it said.

BMI Research is a unit of Fitch Group of Companies.