The political volatility currently engulfing the Senate will only worsen already fragile investor sentiment, according to Maharlika Investment Corp. Independent Director Stephen CuUnjieng.

Speaking in a recent television interview, the former investment banker said the political noise surrounding the Senate offers little reassurance to investors at a time when confidence is already weak due to last year’s flood control scandal and the ongoing national energy emergency.

Red light

“I think the red light would be more antics like what happened in the Senate. Because, I mean, here we are in a time of political and economic difficulty,” he said.

“[W]hat little investment there may [be], whether local or foreign, this doesn’t help. I mean, on the one hand, we have yet to face what we’re supposed to do, which is [to] have accountability for the flood control [scandal],” added CuUnjieng who had spent over two decades advising companies across Asia Pacific, serving as chairman and CEO of Evercore Asia (2011-2020), and other top executive designations at Macquarie Group, Merrill Lynch, and Salomon Brothers, among other investment banks.

Data from the Bangko Sentral ng Pilipinas (BSP) has shown a generally pessimistic outlook among both businesses and consumers since October last year. Even before the onset of the Middle East conflict, BSP surveys indicated that business and consumer confidence remained subdued as concerns over the flood control scandal continued to weigh on sentiment.

Foreign direct investments (FDIs), or investments by foreign companies and individuals in Philippine businesses, fell to pandemic-era lows in 2025 amid concerns over governance, reflecting growing investor caution.

Headwinds severe enough to slow growth

CuUnjieng said recent developments involving the Senate could bring the economy closer to a metaphorical “red light” scenario, wherein mounting political and economic headwinds become severe enough to slow growth and require urgent policy action.

On 13 May, shots were fired in the Senate premises as Vice President Sara Duterte’s articles of impeachment were set to be transmitted to the chamber. There were also indications that a warrant from the International Criminal Court for the arrest of Senator Ronald “Bato” dela Rosa over alleged crimes against humanity was expected to be served on the same day.

Damaging perceptions

Although the government denied reports of an attempted coup, CuUnjieng said the mere fact that gunfire was associated with the Senate was enough to create damaging perceptions among potential investors.

“If you’re not used to our OA (overacting) style of politics, and you hear multiple gunshots in a [hall of] legislature, anybody else would think there’s a coup attempt. And so that’s the optics,” he said. “It’s not, ‘they’re just chasing each other.’ No, it’s usually a coup attempt.”

Global analytics firm BMI said the political headwinds faced by the country, including the recent leadership shake-up in the Senate, with Duterte-allied Alan Peter Cayetano taking over the Senate Presidency, combined with a lack of success in holding corrupt officials accountable, may precipitate further political unrest and worsen the country’s already grim economic outlook.

Lingering impact of unresolved flood control scandal

CuUnjieng likewise highlighted the lingering impact of the still-unresolved flood control scandal, which state officials said shaved approximately 1.1 percentage points off 2025 economic growth as investigations disrupted public infrastructure spending and weakened investor confidence.

“[I]f the bulk of your investments are infrastructure-related, franchise-related, utility-related, then who the regulator is or the grantor is very important. And this kind of, ‘Where are we going? How is this going to play out?’ It doesn’t make you stop, but it makes you pause,” he said.