The Philippines will hold general elections on May 9. The colorful Davao City Mayor Rodrigo Duterte is now the clear front runner poised to become the next president.

Duterte has taken over Senator Grace Poe and widened his lead. In the two polls conducted in mid-April, Duterte has 33% approval rating, while Poe lags with 22-24%. Mar Roxas, the markets’ preferred candidate, and Vice President Jejomar Binay, are fading, now with only 19% and 14% approval ratings.

Duterte’s surge can be explained by undecided voters going to him the last two weeks ahead of the general election. The next polls will arrive next week and all eyes will be on whether Duterte lost momentum recently since the 71-year-old’s rape remarks on April 12.

What if Duterte wins?

Analysts don’t think the next president will have much sway on the economy in the short-term anyhow. In particular, the Congress is so fragmented that the next president can’t push through landmark changes, according to Teneo Intelligence‘s Bob Herrera-Lim. Of the 24 seats in the Senate, 7 are independents and only 2 seats are associated with runner-up Poe. Laggards Binay and Roxas do have 5 and 4 senators in their camps, but that does not change the landscape: Grace Poe will also have a hard time making changes if she wins.

Plus, Duterte is unlikely to rock the boat. His energy will be mostly focused on tackling crime and anti-corruption, which is good for the Philippines economy in the long-run. HSBC wrote:

While Mr Duterte lacks policy experience in national-level politics, his record as mayor over 22 years does shed some light on the type of policies he might pursue. His most notable accomplishment in Davao was tackling high crime, partly a residue of a communist insurgency in the 1980s. This paved the way for Davao to undergo an impressive economic rehabilitation – attracting significant foreign investment, particularly in the outsourcing and business processing sectors. In recent years, the growth of Southern Mindanao (or Davao Region), of which Davao City constitutes most of the GDP, has outpaced national GDP by a small margin.

The Davao City example and comments from recent debates (CNN Philippines, 20 March) suggest that Mr Duterte would focus most of hisenergy on anti-crime and corruption policies, which he has pledged to tackle promptly, likely leaving economic management up to business leaders (some of whom may come from the current Liberal Party given the tiny size of his current PDL-Laban party, represented by one senator in the current senate).

Foreign investors largely brushed Philippines political drama away. Year-to-date, the iShares MSCI Philippines ETF (EPHE) gained 5.3%.