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.
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.