PH risk score retained but peace deal unlikely

PEACE talks with the Moro Islamic Liberation Front ( MILF) are unlikely to move forward given the Marawi crisis but the situation is not expected to heighten Philippine political risks, a Fitch Group unit said.

“With the ongoing battle against IS ( Islamic State)- affiliated Islamist militants in Marawi City, we believe that the peace process between the Philippine government and the MILF is unlikely to see any progress in the coming months,” BMI Research said in a new report.

The Philippines’ short- term political risk index score, however, was retained at 63.1 out of 100. The outbreak of fighting in Marawi had prompted the Fitch unit to cut the score from 63.5 in May.

BMI already downgraded the risk score from 64.6 in March, noting “growing divisions within the government, disagreement between the government and the Catholic Church, as well as [ President Rodrigo] Duterte’s non- adherence to established inter- governmental commitments.”

In its latest report, BMI said the current 63.1 risk score – below the regional average of 68.9 – reflected the complicated security situation in Mindanao.

“As the battle to liberate Marawi City from Islamic militants continues to rage in the Southern Philippines, we believe that the latest version of the Bangsomoro Basic Law ( BBL) will have little chance of moving forward, at least over the near- term, amid persistent security concerns” it said.

Given that the passage of the BBL has been delayed multiple times since 2014 because of the breakout of intermittent violence, BMI said the outcome this time would likely be similar.

The security situation is unlikely to improve over the coming months due to increasing complications from the proliferation of IS influence in the region, it added.

“Even as government troops regain control of Marawi city, we … believe that the terrorist threat in the region is likely to remain or worsen as remnants of the Maute group, backed up by the two factions of the Abu Sayyaf in Basilan and Sulu, the 3,000- strong Bangsamoro Islamic Freedom Fighters, and smaller IS- linked militant groups could stage coordinated attacks in other cities in Muslim Mindanao,” BMI said.

The participation of foreign jihadists in the Marawi fighting, especially those from Indonesia and Malaysia, also complicates the situation given Mindanao’s porous borders and proximity to both Muslim- majority countries.