Business World, 3 April 2017


Pogrom is Europe’s infamous contribution to the lexicon of barbarism. The Jewish pogroms in Europe lasting up to the mid-20th century were state-perpetrated or state-sanctioned spectacles of wanton violence where mostly crazed and drunken anti-Semitic rabbles descend into Jewish ghettoes to kill or maim whoever they chance upon. They wreaked havoc and destruction alright but if they hoped to inflict vengeance on their real or imagined tormentor, the hated and ruthless Shylock, they were out of their depths. For Shylock and the other ghetto deep pockets, dining with Dukes and Barons (who wanted to borrow money) in the latter’s chateau, were untouchable to the drunken rabble. Their victims were mostly winos, homeless, wastrels, petty shopkeepers, and prostitutes who made the dark alleys their homes. Many of these would be, like the pogromers themselves, among Shylock’s tormentees. The pogroms, some commentators would later claim controversially, cleansed the Ashkenazi (European Jewish) gene pool of weaker strains; that the remaining stronger strains produced scientists (Einsteins), bankers (De Rothschilds), and musicians (Mendelssohns). One wonders whether there is a Mendelian twist to the Duterte drug war.

In July 2016, we wrote the piece “The Duterte-Dominguez Disconnect,” identifying possible fault lines within the Duterte Administration. Then, the ten-point program was our only clue to the economic direction of the Duterte administration. It was a vision to take heart. The framers fully intended to plug the known frailties of and outdo the Aquino III watch in growth and inclusion. For despite the anemia in investment, the economy bequeathed by Aquino was surprisingly buoyant. Aquino III’s watch accomplished what no other presidential watch in history could — quality growth — Manufacturing grew faster than the Services sector (see, e.g., Fabella, “Manufacturing, Quality of Growth, and Poverty Reduction.” To read the article, please visit the link

This normally augurs well for poverty reduction. Some confirmation of this Manufacturing-poverty reduction nexus emerged with the announcement in November 2016 by the Philippine Statistics Authority: poverty incidence drastically fell from 26.2% to 21.6% the year past! Nonetheless, the paper red-flagged a disconnect: “What should give us pause…is that…the 10-point program may just be a Dominguez-Economic Cluster (DEC) credo rather than a Duterte credo.” Instead of markers of ownership, that is, building coalitions behind the economic program, the president-elect displayed a penchant for insulting and threatening those who balked at his notion of the rule of law, a notion that smelled and felt like cemetery peace.

But the frontal threat to the 10-point program, we thought, would come from Duterte’s embrace of Maoists who were given charge of three crucial Cabinet positions.

Undue process

What has become clear since then is President Duterte’s follow-through on two core beliefs: first, “A good pusher is a dead pusher,” and second, “Every user is also a pusher.” Marry these to his boundless contempt for “due process Philippine style,” and the offspring is undue process. Due process Philippine style means criminals with money are, like Shylock, virtually untouchable: they buy the police and the judges; they kill or maim witnesses. Seeking redress in undue process (EKJ or DDS) is par for the course on the scorched earth of due process.

The war on drugs can take two paths (see e.g., de Dios, January 29, 2017): either drain the swamp of demand or squeeze the spigots of supply. But the spigots (drug lords) are too slippery? they either fly to other climes or bend due process in their favor; so draining the swamp of demand (users) carries the brunt of the boast to turn Manila Bay red. Unfortunately, these are, as Duterte himself admitted lately, mostly the very poorest, mostly the victims of the drug trade — the people who cannot make a joke of due process.

Pushed into near oblivion is the authentic rule of law challenge: to start to mend the bankrupt due process — say, by putting erring judges and enforcement scalawags under a Damoclean sword and occasionally letting it drop (say from a helicopter!). If you must have undue process (some will argue its interim necessity just as the occasional prairie fire renews the savannah), its axes must fall on the most guilty and not on the victims. If compliant with the Magsaysay doctrine (rephrased), viz., “Those who have more in due process should have less in undue process,” undue process may excite less abhorrence for the same level of bloodletting. The Espinosa fils and the Supt. Marcos syndicate, untouchable by due process Philippine style, should be first in firing line of undue process.

A solid economic program

The 10-point agenda has now morphed into the tax reform and spending program proposed by the economic cluster — it is bold and balanced. Who can argue against raising the infrastructure spending to 8% of GDP? Who can argue against bringing Manufacturing jobs into the regions? Who can argue against raising the infrastructure spending to 8% of GDP? Great harvest is promised here.

But the seeding and the weeding have to be paid for. That is where the pushback starts. To date, the tailwind coming from President Duterte feels more like a headwind. Nibbled at its revenue core, the program risks being like 1996 Comprehensive Tax Reform Program — a revenue-loser. Without financing, the program is dead.

The question of the moment is: Will Duterte ever own the program? (Bernardo, R., “Dominguez’s Tax Reform?” To read the article, please visit the link and (Chanco, Boo, “Duterte’s Political Will” To read the article, please visit the link

There is a clash of China-inspired world views in the cabinet: one is Maoism (shared poverty), the other is Dengism (no free lunch). Duterte’s reluctance may be a nod towards Maoist friends.

Between Mao Zedong and Deng Xiaoping

Duterte seems fascinated with China and who can blame him. China has pulled 600-million people out of poverty. It is an economic miracle thrice over. But who can claim credit?

Mao Zedong shackled the market and managed only “inclusive poverty”; Deng Xiaoping by contrast unleashed the market, graduated 600-million out of poverty and made China the economic miracle we envy and fear. The Maoist anti-market dogma will wreck the market-based plan of the economic cluster.

Peter Wallace ( has called as “idiocy” the plan of DAR now under the sway of Maoism to break up the highly successful Marsman Estate Plantation, Inc. (MEPI) in Mindanao and a template for our agricultural future. Amen. Sounds familiar? Maoists hounded Deng Xiaoping as capitalist roader and sent him into exile because he let farmers play the market and applauded when they became affluent. Allergy to affluence and the market is a congenital Maoist malady.

The question of the ages: Will Duterte turn out to be a Deng Xiaoping steadfast behind the market and affluence, or will he turn out to be a Mao Zedong steadfast behind shared poverty?