Crossroads (Toward Philippine economic and social progress)
Philippine Star, 11 May 2016


The presidential election of 2016 ends as a clear mandate for change on political, social and, perhaps, economic dimensions. Rodrigo Duterte, mayor of Davao, becomes the first Filipino president from the island of Mindanao. Geographically, this marks a shift from the geographic center of political power.

Decisive landslide plurality margin.  For all the last eight decades of presidential elections in the country (including 10 years of the commonwealth) since independence, the country’s president had come from either Luzon or the Visayas.

The margin of victory is a decisive plurality over the next opponent, making the electoral triumph one of landslide proportion. He leads by six million votes over the next opposing candidates, Mar Roxas and 6 .5 million over Grace Poe. Against Roxas, he has a 15.5 percentage point difference in terms of total votes cast.

These are unofficial returns (as of May 10, 2016, 5 am) for 88 percent of all precincts counted. The overall participation rate among all registered voters is 73 percent.

Duterte received only 38.7 percent of the total popular votes. The election returns so far exceed by five percentage points the voter preferences suggested by the last surveys reported by SWS and Pulse Asia.

In spite of the large margin of victory of the president-elect, he is still a “minority” president. Philippine rule for the election of the president is based on plurality of votes by the winner over other candidates. All the presidents since Fidel Ramos have won by plurality of the votes cast from a field of more than two candidates.

What this victory means. The strongest message of Duterte’s electoral victory is the promise to go after criminals and drug syndicates, to deal with corruption effectively, and to pursue law and order.

Great expectations are awaiting the promise that within six months of the presidency, major results on the war against criminality and drug syndicates are forthcoming.

To succeed in this, Duterte insists on the right of the “community” to be rid of criminals and drug syndicates. He deplores the excuse that criminals who do harm and are caught in the act of committing deserve the shield of human rights.

On another aspect of the law and order problem, Duterte is seen as someone who could effectively pursue a meaningful peace process, both concerning the Muslim problem in Mindanao and the long running NPA rebellion.

As a local leader, he has maintained open windows of contacts with both groups. In taking over the leadership of the nation, the paths toward the peace process might appear more possible.

His remedy for the Muslim problem is partly political reform. He thinks that the route toward the grant of autonomy to the Muslim region could be facilitated within the framework of a federal system of government.

How the federal solution would work, however, is not clear, except that it gives the same rights to all political units belonging to the nation under such a system of government.

Under the Aquino program, the Bangsamore entity is given autonomous powers that are denied to other political units within the country. Duterte would explore parity for autonomous powers of other local political units within a federal framework.

Rejection of Daang Matuwid. Another clear message for Duterte’s electoral victory is the defeat of the Benigno Aquino administration’s style of governing. The widely acclaimed anti-corruption program that is praised in international circles was perceived by voters as selective, mainly against political enemies.

The government overlooked corruption within the administration. The election campaign against the administration emphasized mismanagement, corruption and other problems, particularly in the departments of transportation department and of agriculture.

Moreover, indecision and incompetence characterized the infrastructure program. As a result, little was accomplished in the six-year term, except in the process of contracting PPP projects. Only a few PPP projects were actually started.

Faster decision-making is expected under a new administration.

Where goes the economy? During the campaign, economic policy discussion stayed in the backseat, little-heard of as a message of the Duterte campaign.

I reviewed my interview notes when I met Mayor Duterte last year, as I traveled to Mindanao. (I wrote about this in two Crossroads essays.)

His focus on the peace and order and campaign against criminality has improved prospects for business to feel confident about locating in Davao. Moreover, Duterte has seen to it that business permits be acted upon within 72 hours of filing. He required that any delays in the action be properly reported and explained by the government officer.

He also told me that in his early years as mayor, he told Chito Ayala (then an important businessman in that region): take care of your business and I will take care of the criminals.

He made the observation that small-scale mining in Diwalwal in the Compostela Region was inefficient and had high social and economic costs. He expressed appreciation for larger scale mining as practiced by Australian methods. From this, it would seem he would look forward to increasing mining exploitation in the country.

It was also candidate Duterte who said he would end contractualization during the election campaign, an issue that was followed by populist acclaim by other candidates. In a subsequent effort of labor leaders to suggest more labor protection laws, he also seemed to consider this measure in the context of larger labor market reforms.

These signals, few and scattered as they are, seem to indicate that Duterte would use a friendly and productive approach toward business. The fact that industry and agriculture have thrived in Davao indicates he would adopt business-friendly policies that attract investments.

It is, however, premature to make a clear case that better business policies await the Duterte administration.

We would explore many aspects of this problem in the context of improving economic policies as we get to understand how he appoints people who have to deal with the economic and business aspects of governing the country.

The fact is he comes to the picture not beholden to any of the major groups that have dominated business and economic policies in the country. On this basis, this is our best chance for economic reforms that opens up the country to more competition and foreign direct investments.