The ‘ris­ing’ risks for PH


Pres­i­dent Ro­drigo Duterte’s deadly drug war and armed Is­lamist re­bel­lion pose “ris­ing” risks to the Philip­pine econ­omy, although it should con­tinue to grow ro­bustly in the short term, Moody’s In­vestors Ser­vice said.

“The re-emer­gence of con­flict in the south­ern Philip­pines, as well as the Duterte ad­min­is­tra­tion’s fo­cus on the erad­i­ca­tion of il­le­gal drugs, rep­re­sents a ris­ing but un­likely risk of a de­te­ri­o­ra­tion in eco­nomic per­for­mance and in­sti­tu­tional strength,” the credit rat­ings agency said.

Duterte is bat­tling mil­i­tants in the south­ern city of Marawi, while hu­man rights groups have ac­cused him of or­ches­trat­ing a crime against hu­man­ity with po­lice killing more than 3,800 drug sus­pects in 14 months.

Sound eco­nomic and fis­cal poli­cies in­clud­ing a fo­cus on in­fra­struc­ture de­vel­op­ment bal­ance out po­lit­i­cal and other risks, the credit rat­ings agency said in a coun­try re­port re­leased on Fri­day that af­firmed the Philip­pines’ in­vest­ment-grade credit rat­ing and sta­ble out­look.

Mar­tial law

But mar­tial law, im­posed by Duterte on the south­ern re­gion of Min­danao to stop the Is­lamist threat, could be de­clared else­where in the coun­try and up­set this bal­ance, the coun­try re­port read.

“(A) wors­en­ing of the Is­lamist in­sur­gency in Min­danao… could lead to an ex­pan­sion of mar­tial law, un­der­mine both for­eign and do­mes­tic busi­ness con­fi­dence, and dis- rupt eco­nomic ac­tiv­ity in other parts of the coun­try,” it said.

Duterte has said the mil­i­tary cam­paign in Marawi, which has left more than 800 peo­ple dead in a re­gion wracked by decades of Mus­lim armed re­bel­lion, was on its fi­nal stages.

How­ever, on Fri­day, De­fense Sec­re­tary Delfin Loren­zana warned Duterte may also de­clare na­tion­wide mar­tial law if threat­ened protests against his rule turned vi­o­lent or dis­rupted the coun­try.

Anti-Duterte protests are planned for Septem­ber 21, the 45th an­niver­sary of the im­po­si­tion of mar­tial law by the late dic­ta­tor Fer­di­nand Mar­cos, who was ousted in a blood­less “Peo­ple Power” revo­lu­tion in 1986.

Mean­while, in Cebu, lawyer Dem­ocrito Barce­nas, who was among the vic­tims of mar­tial law de­clared by Mar­cos in 1972, said the sit­u­a­tion now is more like an un­de­clared mar­tial law.

Speak­ing at the So Ano Na Fo­rum, Barce­nas said, “What we are ex­pe­ri­enc­ing at present is more dan­ger­ous than dur­ing the time of Mar­cos be­cause be­fore, Mar­cos de­clared mar­tial law, but now there is an un­de­clared mar­tial law. Even with­out the pres­ence of a war­rant of ar­rest, if you are al­leged to be a drug per­son­al­ity, you can be killed in­side your own house. It is worse than the mar­tial law of Mar­cos.”

For­mer Com­mis­sion on Hu­man Rights (CHR) chief Etta Rosales pre­sented a chronol­ogy of events dur­ing the Duterte ad­min­is­tra­tion and lamented the death toll in the war on drugs.

Her data showed that as of Au­gust, 1,312 peo­ple died in the war against drugs, more than half of which, or 807, were killed in po­lice op­er­a­tions.

“For him (Pres­i­dent Duterte), it’s not a crime; it’s col­lat­eral dam­age. What the Pres­i­dent con­sid­ered col­lat­eral dam­age has taken the lives of in­no­cent chil­dren,” Rosales said.

Mag­dalo Rep­re­sen­ta­tive Gary Ale­jano, for his part, said the war on drugs is not just killing peo­ple but also the democ­racy of the na­tion.

Tax re­form law

Moody’s also cited “con­tin­ued un­cer­tain­ties” over Duterte’s pro­posed com­pre­hen­sive tax re­form law that Con­gress had yet to pass.

“In the ab­sence of a sig­nif­i­cant boost to gov­ern­ment rev­enues from the pas­sage of the (bill), the gov­ern­ment will likely pare back its plan to ag­gres­sively in­crease its spend­ing on in­fra­struc­ture,” it added.

But the coun­try’s eco­nomic man­agers later this month will seek more sup­port from the Chi­nese gov­ern­ment and in­vestors for the Duterte ad­min­is­tra­tion’s am­bi­tious “Build, Build, Build” in­fra­struc­ture pro­gram, the De­part­ment of Fi­nance (DOF) said.

Fi­nance Sec­re­tary Car­los G. Dominguez III said he will lead a Cab­i­net-level del­e­ga­tion for an in­fra­struc­ture road show in China on Sept. 27-29.

“The Philip­pine del­e­ga­tion will meet with Chi­nese min­istry of­fi­cials on Sept. 27 in Bei­jing and pro­ceed the fol­low­ing day to Shang­hai, China’s fi­nan­cial cen­ter, to gen­er­ate sup­port for the ‘Build, Build, Build’ pro­gram of the Duterte ad­min­is­tra­tion,” the DOF said in the state­ment.

Un­der Pres­i­dent Duterte’s ban­ner “Build, Build, Build,” the gov­ern­ment will roll out 75 flag­ship, “game-chang­ing” in­fra­struc­ture projects and plans to spend up to P9 tril­lion on hard and mod­ern in­fra­struc­ture un­til 2022.

The eco­nomic man­agers “will also meet with high-ranking Chi­nese of­fi­cials to dis­cuss the progress of the prepa­ra­tions for the Philip­pines’ big-ticket in­fra­struc­ture projects that would be partly funded by of­fi­cial de­vel­op­ment as­sis­tance (ODA) from China,” ac­cord­ing to the DOF.


Pres­i­dent Duterte’s rag­ing drug war and the on­go­ing bat­tle with the ter­ror groups in Min­danao are be­lieved to rep­re­sent a “ris­ing but un­likely risk” of a de­te­ri­o­ra­tion in the Philip­pine’s eco­nomic per­for­mance and in­sti­tu­tional strength ac­cord­ing to a credit rat­ings agency.

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