During the past few years, the Philippines “has amazed itself and others by being both boring and successful”, says The Economist. It had overcome years of coups and economic mismanagement, morphing into a regional star, with annual growth steaming ahead at an annual rate of more than 6%; foreign investment and consumption have risen, while public debt has fallen. But could the country’s new-found stability now be at risk?
The worry is that Rodrigo Duterte, the newly elected president, “could prove to be a very loose cannon indeed”, says The Guardian. He will be sworn in on 30 June.
A former mayor of a city in the southern province of Mindanao, his “vociferously populist” campaign included jokes about rape and a promise to dump the bodies of 10,000 criminals in Manila Bay. The elites surrounding the outgoing president, Benigno Aquino, had failed to appreciate just how much gun violence and corruption affected people, especially outside the cities that have been the main beneficiaries of the boom.
Duterte insists he “can fix everything and does not care what corners he has to cut in order to do so”, says The Guardian. “It is a story many politicians in many countries have told before, and it does not usually end well.” He hasn’t proposed a major change in economic direction, and apparently plans to hire the Philippines’ best economic brains, as The Economist points out. “But much remains vague.”
If Duterte is indeed happy to leave the day-to-day running of the economy in the hands of more qualified people, policy-making “will not deteriorate overnight”, says Capital Economics. The longer-term issue, though, is that the Philippines’ own history shows how political uncertainty and erratic leadership can undermine an economy’s prospects. Aquino was key to steadying the ship. Investors will need to keep a close eye on this regional star and beware of history repeating itself.