> What might be a more appropriate element in P5?

It would depend on the purpose of your encoding. I'm not sure about the 
need for encoding this at all. You said earlier you wanted the 'that 
is'-expansion for search and retrieval purposes. A search by lemma? By 
regularised spelling?

I'd be tempted to use


or to go by James' suggestion and use lemmatisation

<w lemma="be">'s</w>