Technicalities aside, let us say, that the Philippines did control that chunk of Borneo called Sabah, or at least what the sultanate of Sulu claims. What would it look like now that Borneo is now divided into three, and that the Philippines has a land-border with two countries?
- Would the place be richer or poorer than present day?
Depends on how Philippines progresses in ATL. So the answer depend on your POD, screwing or wanking Philippines.
It can be richer or poorer. Assuming after Macapagal's presidency ending in 1965, Philippines goes back in track with Quirino level president, Philippines may grow 7% annually(which make Philippines at par with OTL South korea, or the same replacement as Macapagal(Richer than OTL Malaysia but poorer than South Korea. Or same old Marcos leadership, poorer than OTL Malaysia.
- Would it be more peaceful or more volatile?
This also depends on POD, situation of ATL Philippines. Would you go OTL path, or will you butterfly Marcos level presidents in the Philippines.
Volatility in Muslim areas in the Philippines only reappeared in 1972(Marcos being president in 1965). Muslim areas were at peace since 1910s.
So it depends if you got an abusive authoritarian who does not care about people like Marcos or not. The main trigger for MNLF started rebellion alleged deaths of 11 Muslim soldiers meant for the invasion of Sabah in 1968.
The same can be said on Sabah. How they are treated by the president and his/her policies.
- What relations with Malaysia and Indonesia look like now that there is a Land border between these countries?
This would depend on development in ATL.
But from 1963 POD, assuming Sabah went to the Philippines, at that point, the richer, better manage country would be the Philippines among the 3. Philippines got more diplomatic allies and sure superpower supporter.
Assuming Konfrontasi happens in ATL 1963-66, the Philippines will have the better equipped military even vs Indonesia. Or the Konfrontasi might not happen since Philippines can pressure Indonesia to back down as Indonesia might fight two wars vs Malaysia and British Commonwealth and vs Philippines and US(triggered by the mutual defense treaty).
- Would this area be influential when National Elections come? Would we see senators, or even a president come from there?
Using the system left by the US, used by the Philippines in 1963, the answer is yes. Philippines had presidents from minorities(minority from the largest/Tagalog speaking) even before 1965. Quirino from Ilocos, Roxas from Capiz, Osmena from Cebu.
It is a matter of talent and support you can bring to the two party system, Liberal Party or Nacionalista Party.