OPINION: Philippines risks economic gains with new president

Jose M. Galang

Posted at May 05 2016 02:03 PM | Updated as of May 05 2016 09:12 PM

The Philippines is "at a crossroads" as results of the May 9 presidential elections looked set to "dent" the economy, which has grown steadily under incumbent Benigno Aquino III, according to an analyst for The Economist magazine.

Aquino, who steps down on June 30, is the "competent and popular incumbent" who has made "slow and steady improvements in infrastructure, the regulatory environment and in reducing corruption," said Simon Baptist, head economist of The Economist Intelligence Unit (EIU) in an email to subscribers on Thursday.

Baptist noted a 10-percent "boom" in investments in the last three to four years.

"Unfortunately, this election looks set to put something of a dent in this performance, whatever the result. For a start, none of the front-runners is likely to secure a mandate as strong as Mr. Aquino’s,” Baptist said, adding the country was "at a crossroads."

ROCKIER RIDE

Baptist said the Philippines' bid to become the world's 21st largest economy by 2030, from the current 33rd as projected by the EIU, could be "a bit rocker."

"While a messy transition in government is a given, things will look very different depending on who wins," he said.

The most recent poll by Pulse Asia and ABS-CBN showed tough-talking Davao City Mayor Rodrigo Duterte leading by a comfortable margin over Sen. Grace Poe and Aquino's preferred successor, Mar Roxas.

The EIU also said the upcoming Philippine election holds regional significance.

"Tensions will steadily worsen between the Philippines and China over the countries’ South China Sea dispute in the next few years. The Philippines requires a skilled and steady operator to manage the delicate diplomacy needed to contain rising tensions,"it said.

'DON'T SPOIL IT' 

The EIU is a research group that provides economic forecasting, industry special reports, and country risk analyses to a wide range of clients that include governments, large corporations, NGOs and academic institutions, among others. The EIU is a sister group of The Economist magazine.

Last week, The Economist said that while the benefits from the recent economic growth in the Philippines have not been even, with the cities getting most of the jobs created under the Aquino administration, many rural families remain in deep poverty.

The economy has grown steadily and "the system hardly looks broken," said The Economist magazine. Nonetheless, there are still not enough jobs for the millions joining the workforce each year, urban poverty is rising, and corruption is endemic.

Duterte, the magazine commented, is "well-positioned to capitalize on that resentment." The magazine said Duterte taps into what political analyst Richard Javad Heydarian calls "cacique democracy fatigue": fading tolerance of a feudal politics long dominated by a few prominent families.

"More annoying than Duterte's boorishness is his contempt for democracy and the rule of law," said The Economist, adding that Duterte has spoken approvingly of the extrajudicial killing of suspected criminals and sneers at Westerners who "want to rehabilitate instead of just killing" criminals.

The Economist commentary sounded alarmed at the prospect of a Duterte presidency. Along with the analysis is a chart illustrating the overall economic gains of recent years. The chart was titled: "Don't Spoil It".

"Another [Filipino] politician once said something similar [about adopting a system that is less democratic]: 'The times are too grave and the stakes are too high for us to permit the customary concessions to traditional democratic processes.' That was Marcos in 1973, months after he declared martial law. He went on to torture and kill thousands of his countrymen," The Economist magazine reminded its readers.

BIG BUSINESS SPEAKS

Makati Business Club chairman Ramon R. del Rosario Jr. recently reminded members that their choice to replace Aquino "deserves close scrutiny" as the economy had performed well in the last six years.

The electorate must decide "not out of despair or sheer disgust at an indecisive, slow-responding administration, or the infuriating traffic, or rampant crimes," he said.

"Let us not go for a solution that may be far worse than the problems we are addressing. Think instead of what your vote will mean for your future and the future of millions of younger Filipinos, including your children or your younger siblings and coworkers. Consider the tremendous cost of the wrong choice,” he said.

(Disclaimer: The views of the author are his own and not necessarily the views of ABS-CBN Corp.) 

Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.