Don’t forget to come hear Sara Johnson, Economics Executive Director at IHS Markit, speak tomorrow at the NABE Econ… https://t.co/yHX8U9SP8Z
Philippines security risks
The Bangsamoro Organic Law has received strong support from most of the Autonomous Region in Muslim Mindanao and will generate security stabilization on the mainland, but not in the Sulu archipelago.
- The overwhelming ratification of the Bangsamoro Organic Law creates greater autonomy for Muslim Mindanao and is risk-positive for security in the region, paving the way for the demobilization of at least 30% of Moro Islamic Liberation Front (MILF) fighters as per the 2014 peace agreement.
- Numerous legal and procedural issues will delay implementation - a constitutional challenge already has been launched, and the national government will need to maintain focus to manage the transition period effectively before the first elections are held in the new autonomous region in 2022.
- Islamist groups that do not have an agreement with the government, such as the Bangsamoro Islamic Freedom Fighters (BIFF), will continue attacks against security forces, occasionally targeting religious sites across Mindanao. However, the heightened tempo of counter-terrorism operations by the Philippine Armed Forces, combined with the MILF's increased co-operation with security forces, is likely to reduce the frequency and intensity of attacks over the next year.
On 21 January 2019, an overwhelming majority of voters in the Autonomous Region in Muslim Mindanao (ARMM) voted to ratify the Bangsamoro Organic Law (BOL). Once implemented, the BOL will replace the ARMM with a new region, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). The law grants greater autonomy for the region over all policy areas, with the exception of defense and security, and guarantees that 5% of the Philippine national government's annual internal revenue, estimated to be PHP59 billion (USD1 billion), will be transferred to the new autonomous government as a block grant.
The Commission on Elections announced it had counted 1,540,017 votes in favor of the BOL, while 198,750 voted against. Sulu province voted against ratification but will be included in the new region, given that the plebiscite was ratified by the overall majority. Two Muslim-majority cities, Cotabato City on the mainland and Isabela City on Basilan Island in the Sulu Archipelago, were asked if they wished to join the new BARMM - Cotabato voted in favor while Isabela voted against. A second plebiscite will be held on 6 February 2019 in Lanao del Norte and North Cotabato, similarly asking if they wish to join the new BARMM.
The BOL fulfils a key requirement under the 2014 peace agreement between the Moro Islamic Liberation Front (MILF) and the government. Under the agreement, the MILF is now required to decommission at least 30% of its combatants and weapons.
Separately, on 27 January 2019 on Jolo Island, two improvised explosive devices (IEDs) were detonated at a Roman Catholic cathedral, killing 20 people and injuring more than 100. The first IED was detonated inside the cathedral, with the second one then detonated in a nearby car outside the cathedral as emergency services arrived at the scene. The Islamic State has claimed responsibility for the attack. It is unclear if the motive for the attack related to the plebiscite.
Several legal and procedural issues must be overcome before the BOL takes effect. Sulu Governor Abdusakur Tan II has filed a constitutional challenge against the plebiscite in the Supreme Court - he specifically claims that Sulu should be allowed to opt out of the BARMM since it voted against ratification.
Furthermore, the transition will be procedurally challenging. President Rodrigo Duterte will need to appoint a Bangsamoro Transition Authority (BTA), which will be in place until elections in 2022. The BTA will manage security jointly with the Philippine police and army, also working together with MILF militants.
Outlook and implications
The BOL's ratification is a risk-positive development for security in Mindanao - it is likely to enhance co-operation between MILF militants and the Philippine Armed Forces (AFP) in western Mindanao. This effect will not be felt in the Sulu Archipelago, however, where other Islamist militant groups that do not have a peace agreement with the government, such as the Abu Sayyaf Group (ASG), are stronger and the MILF has limited influence.
The ASG was likely to have been responsible for the church bombing in Jolo and will continue kidnappings, armed assaults, and IED attacks against security forces, occasionally targeting Christian religious sites. Despite the government recognizing the ASG as a critical security threat and even creating a new division specifically to combat the ASG in Jolo, poor command and focus, combined with the ASG's influence within the local population, make the group unlikely to be defeated over the next year. It is noteworthy that the bombing occurred in an area that was ostensibly being secured by the army.
Other Islamist militant groups on mainland Mindanao, including the Bangsamoro Islamic Freedom Fighters (BIFF), will also continue attacks against security forces, but the intensity and frequency of attacks - already in decline because of the AFP's increased counter-terrorism operations in Mindanao under martial law - are likely to diminish further.
Increased security risk would be indicated by reports of defections from the MILF. If the lengthy transition process generates disillusionment among currently inactive MILF combatants, at least some fighters would be likely to defect to more active Islamist groups.
In contrast, an indicator that Mindanao will remain on its current risk-positive trajectory would be clear evidence of co-operation between the MILF and the AFP for the 6 February 2019 plebiscite. Effective co-operation for this event would increase IHS Markit's confidence that an interim transition period that features joint policing involving both groups is feasible.
- Capital Markets Weekly: Investor yield hunger underpins record Italian syndication
- Malaysian economic growth moderates in Q4 2019
- Houthis selecting more UAVs over ballistic missiles in Arabian Peninsula attacks
- Coronavirus economic shockwave hits the APAC aviation industry
- Weekly Pricing Pulse: The coronavirus hammers commodities
- Djibouti contract and tax risks
- US Regional economic predictions for 2020
- Capital Markets Weekly: India sets ambitious privatization program including LIC IPO
See you next week at the NABE Economic Policy Conference. Don’t miss hearing our Economics Executive Director, Sara… https://t.co/GcyKfIe9wu