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Duterte’s dynastic ploy is a dismal omen for Philippine economy
Plan to seek the vice presidency in 2022 carries long-term risks
August 26, 2021 05:00 JST
Rodrigo Duterte, pictured at the Malacanang presidential palace on Aug. 24: the Philippine President has confirmed rumblings that he will run next year for vice president. © Malacanang Presidential Photographers Division via AP
William Pesek is an award-winning Tokyo-based journalist and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”
Rodrigo Duterte’s most potent weapon is denigrating critics in bombastic and colorful fashion.
Political opponents, journalists, the United Nations, the pope, U.S. presidents, Singaporeans, women and Holocaust survivors have been among those to suffer the Philippine President’s wrath.
But what history — and global investors — may remember most is the next target of Duterte mockery: the Philippine Constitution.
Since June 2016, Duterte has made it clear that he thinks the answer to any big problem is more Duterte. In keeping with this foundational view, he plans to seek the vice presidency in 2022, when his term ends.
In the Philippines, a president gets only one six-year term, but Duterte wants another six. That is not what is happening here, Duterte apologists say. The president, they claim, is merely heeding calls from supporters to accept his party’s VP nomination — and selflessly so. This is patriotism, not narcissism, they insist.
Anyone who thinks this will turn out well did not follow Vladimir Putin’s 2008-2012 stint as “understudy” to Dmitry Medvedev. The odds are high, too, that we will see a Duterte-Duterte ticket in 2022, with daughter Sara running for the top job.
The Philippines has long had a problem with political dynasties — from the Marcos family to the Macapagal clan, from which Gloria Arroyo hailed. Even when family dominions serve the nation comparatively well — as with Presidents Corazon Aquino and son Benigno — they can send the wrong message.
Possible contenders for next year’s who-is-your-daddy election include Sara Duterte, mayor of Davao, her dad’s old job; Ferdinand Marcos Jr., son of the dictator; Grace Poe, daughter of actor-turned 2004 presidential candidate Fernando Poe. The list goes on. The Philippines can often seem like “Game of Thrones” without dragons and sword fights. Its political center is a small gang of families battling for power, wealth and posterity.
Yet as constitutionally dubious as a Duterte-Duterte ticket might be — or a Marcos-Duterte team — the real loser of the Philippines’ going all-in on “illiberal democracy” is the economy.
To be sure, the strongman from the Philippine south is still very popular, defying the laws of political gravity. Even the cultish following U.S. President Donald Trump enjoyed failed to get more than halfway to the 90% support Duterte has boasted at times.
Yet this much is clear: Duterte has harnessed the “cult of GDP” masterfully. Though the addiction to big headline gross domestic product rates is not unique to the Philippines, Manila politicians perfected the strategy.
From the days of President Joseph Estrada to Duterte now, the idea is to get GDP to roughly 5% to give you space to pursue your real political passions. For Duterte, it is a bloody war of choice against the drug trade, one that earned his administration rogue status among human rights groups.
Along with turning off foreign investors, all those body bags may put Duterte in harm’s way with courts at home and abroad once he leaves office. That is, if he ever does.
“It shows a clear mockery of our constitution and democratic process,” warned opposition coalition 1Sambayan in a statement this week. “Obviously, this is driven by fear of accountability both from the International Criminal Court and from our own justice system.”
But the way in which Filipino voters grade Duterte on a curve, often based on misperceptions that the economy is booming, gives him reasonable odds of cementing a dynasty that escapes accountability. In reality, the Philippine economy is far worse off in 2021 than the one he inherited in 2016.
Here, COVID-19 gets only some of the blame. Oddly, scores of Duterte loyalists seem willing to give him a pass on a disastrous pandemic response.
Countless lockdowns have not contained the spread. The delta variant, meantime, is a problem he cannot spin or shout down in a hail of insults. The same with his obsequiousness toward China’s Xi Jinping. Duterte prioritized the questionable Sinovac vaccine to make President Xi happy. Now 109 million Filipinos are at risk from coronavirus variants.A health worker inoculates a man with the Sinovac vaccine at a temporary vaccination center in Manila on June 22: Duterte prioritized the questionable Chinese vaccine to make President Xi happy. © AP
The return of corruption is equally troublesome. From 2010 to 2016, the late President Aquino increased accountability, reduced graft and tax evasion, cleaned up Manila’s balance sheet and surrounded himself with many skilled technocrats to fumigate public institutions. Aquino bequeathed to Duterte the nation’s first-ever investment-grade ratings and a 95th-place ranking on Transparency International’s corruption perceptions index.
Today, that ranking is 115th, and will almost certainly get worse should the Philippines morph into Duterte Inc. Yes, the checks and balances and sustainability requirements that Aquino championed slowed down huge infrastructure projects. But a return to pre-2010 opacity will draw the attention of Moody’s Investors Service, S&P Global and Fitch Ratings before long.
The Duterte-era debt binge tells the story. Manila’s debt-to-GDP is on course to hit 59.1% by the end of 2021, a 16-year high. That puts the debt to 2005 levels, five years before Aquino arrived to save the Philippines from junk status. Even worse, the ratio is set to approach 61% by the end of 2022. Considerable harm was done well before COVID hit. Team Duterte went all-in on public financing for infrastructure, doing away with Aquino’s public-private partnership model.
Imagine the economic damage Duterte could do with another six years. As the chances of an Act Two for Duterte increase, so do risks to the economy — and Manila’s credit rating — returning to square one.