If the growth of the gross domestic product were a flower, it would have to be described as very delicate, with each of its contributing elements – investments, exchange rates, outputs, costs and interest rates – quickly affected by a change in the environment in which the economy operates. This fact of economic life has once again been shown to exist during the first five months of the administration of President Rodrigo Duterte.
The period since June 30, 2016, when Mr. Duterte’s term began, has unquestionably been the most turbulent first five months in the history of the post-World War II Philippine presidency. And they have been rendered turbulent not by a foreign potentate or by a homegrown rebel or by an ambitious Filipino politician but by Duterte himself.
Uncertainty is part and parcel of business life, but unstable governance is something that the business community abhors. And there has been unstable governance aplenty.
The displays of unstable governance have included a rash decision to not honor this country’s adherence to the UN-sponsored climate change mitigation treaty, equally rash statements on the Philippine mining industry and capricious declarations relating to this country’s relations – diplomatic, strategic and economic – with its No. 1 ally and economic partner, the US. These Duterte pronouncements and positions have been – to borrow former President Ramos’s adjective – “discombobulating” for the Philippine business community.
The domestic and foreign business communities of this country don’t relish being discombobulated by the government, especially by its head. They realize that governments and Chief Executives cannot be perfect, but they do expect the political leadership of this country to at least provide a national environment in which businesses can operate in a stable, rationale and reasonably predictable manner.
This kind of environment – stable, rational and reasonably predictable – is not what Mr. Duterte and his administration have been providing. For many businessmen whom I have spoken to, things have gotten to a point where, they say, they open their morning newspapers or tune in to the evening TV news and ask, “What has Duterte done this time?”
Benigno Aquino III was not a great president – I definitely am not a member of the Yellow Army – but for six years, Mr. Aquino provided stable and rational government and at the end of that period he left an economy that was displaying steadily good economic fundamentals, was growing at the fastest rate in Asia (not excluding China and India) and had received investment- grade credit rating from the international rating agencies for the first time in its postwar history.
In the remaining five and a half years of the Duterte presidency, is the Philippine economy likely to perform equally well? On the basis of Rodrigo Duterte’s first-half-year performance – as in theatrical performance – I have my doubts. Once the lagged benefits from the Aquino administration’s economic management begin to wear off, Mr. Duterte’s crew will have to begin to show their mettle.
With a population of 105 million people – and counting – and a poverty rate of approximately 26 percent, Mr. Duterte’s administration will have to deliver the goodies. Like all intelligent Filipinos, this country’s businessmen are saying that it cannot be about drugs alone.
The Philippine economy needs to at least maintain, and ideally raise, its recent growth rates. This country is the “my country” of 105 million Filipinos. It is my country too. My countrymen and I don’t want our future – political as well as economic – to be waylaid by the instabilities and irrationalities of any one person.
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