Philippines President Duterte's report card: Why he remains popular

Manila: His foul mouth and "strongman" tag have endeared Rodrigo Duterte to Filipinos, who voted for him by a wide margin in a five-way presidential race in 2016.

It was a period when the economy was on the upswing. But the city streets were dangerous. In the countrysides, armed communist rebels and Moro separatists challenged government troops.

When Duterte, 73, made a euphoric entrance, inflation was low — built upon the economic achievements set in place by his predecessors — and optimism for change high.

In his spirited campaign, he vowed to solve runaway crime, corruption, the communist as well as Moro insurgencies. Duterte became the country’s 16th president, scoring a landslide win, garnering 16.6 million votes (6.6 million more than the second-highest, former Senator Mar Roxas, scion of the Philippine ruling elite).

Duterte drew overwhelming support from overseas Filipino voters.

Fired up by populist rhetoric, street language, and backed by a strong social media support, his victory was fuelled by a groundswell of a mix of anger and hope among the electorate to solve everyday issues.

Many Filipinos saw Duterte's predecessor, Benigno Aquino III, as an OK economic manager but with an undesirable flipside: Aquino was seen as indifferent, reluctant to make tough calls — and largely ineffective against the triple whammy of drugs, crime and corruption.

During the campaign, Duterte gave a timeline for solving the drug menace: "Within three to six months."

That bold promise worked.

Nearly 30 months under his watch, many Filipinos would argue that much has already changed for the better, both big and small, though there's so much yet to be done.

Strengths

The former Davao City mayor took no time in unleashing a raft of reforms. He started by crushing drug gangs, including those within the police ranks, name-shaming "narco-generals". He summoned mayors and local officials suspected of involvement drugs.

An April 2018 survey by independent pollster Pulse Asia Research shows Duterte's anti-narcotics drive is his most important accomplishment so far, with 69 per cent of those polled satisfied with his rule. This, despite criticisms from the international community over alleged extrajudicial executions carried out by police and state agents.

Near the halfway mark into his presidency, Duterte’s way of doing — and saying — things continue to enjoy a strong public support, with 78 of those polled in September (1,200 respondents) giving him a pat in the back for his anti-drug campaign.

What's more, the Phippines is still largely a democracy, despite the localised Martial Law in Mindanao. And thanks to a “super-majority” support in both Houses of Congress, many of his priority laws were passed.

Among the significant legislations or orders passed under Duterte's watch:

Universal Access to Tertiary Education Act

The long-term effects of this law, signed in August 2017, is epic. Under Republic Act 10931, underprivileged Filipino students now have a chance to earn a tertiary education degree — for free. It institutionalises free tuition and exemption from other fees in state universities and colleges (SUCs), local universities and colleges (LUCs) across the archipelago. It also foresees subsidies for private higher education institutions.

Ease of Doing Business Act

The Philippines had an sclerotic business registration and tax-filing process, where every step means greasing the palm of officials. RA No. 11032, also known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018,” signed on May 28, 2018, seeks to do away with that. This serves to improve peoples’ dealing with the government by streamlining bureaucracy.

Tax Reform for Acceleration and Inclusion (TRAIN) Law

The Tax Reform for Acceleration and Inclusion (TRAIN) Act, RA 10963, is the initial package of the Comprehensive Tax Reform Program (CTRP) signed into law by Duterte on December 19, 2017. This new progressive taxation law demands lower personal income taxes to offset the impact of higher taxes on sugar-sweetened beverage, automobiles, coal, fuel, and tobacco.

The OFW Bank

Overseas Filipino are some of Duterte's most ardent supporters, allowing him to corner more than 70 per cent of Filipino votes in many overseas polling places. On June 2018, the Overseas Filipino (OF) Bank was launched, fulfilling a campaign promise, through the acquisition of the moribund Philippine Postal Savings Bank by the Land Bank of the Philippines. Both are government-owned and controlled corporations.

10-year Philippine passports

On August 2, 2017, Duterte signed into law Republic Act (RA 10928) providing for a 10-year validity of the Philippine passport. The 10-year validity only applies to Filipino citizens who are over 18 years of age. Those who are under 18 will be issues passports with five-year validity.

5-year validity of Philippine drivers’ licence

Also on the same day, August 2, 2017, Duterte signed into law a measure extending the validity of drivers’ licenses to five years from the previous three years. Republic Act No. 10930 amended Section 23 of the Land Transpottation and Traffic Code (Republic Act No. 4136) to extend the validity period of drivers’ licenses.

Bangsamoro Organic Law

On August 6, 2018, Duterte signed Bangsamoro Organic Law (BOL), during which he aired hopes the new deal would put an end to the conflict in Mindanao, turning it instead into the country's major economic powerhouse. The edict took more than two decades to pass and seeks to address the flaws of an earlier law on Moro autonomy.

National ID Law

This law took more than 20 years. Previous leaders reeled under the pressure of various groups concerned about potential abuse, hacking or misuse of a national ID database. It took Duterte just two years. On August 6, 2018, he signed the Philippine ID System Law, a long-debated measure that aims to provide a nationwide database of all Filipinos and a chip-based identity card with biometrics. The new ID system, set to kick in from January 1, 2019, will help ease transactions with the government, curb crime and enhance security.

Mandatory SSS coverage for OFWs

On October 10, 2018, the Philippine Senate has finally approved a legislation amending the law on the country’s Social Security System (SSS). More importantly, it mandates compulsory membership for all overseas Filipino workers (OFWs) under the age of 60. This legislation proved too difficult to hammer in the past, but is now seen as a way to address the pension "timebomb" that awaits millions of non-member OFWs.

Duterte's government also announced the state coffers would to bear the airfare of OFWs who availed of the amnesty offered by the UAE government, also offering them some cash assistance.

Tough calls

The seige of Marawi City on May 23, 2017 by extremists was a tough test for Duterte. He declared Martial Law on Mindanao, one of the major island groups in the archipelago.

On October 23, after five months of street fighting with well-armed extremists, Duterte stood on gym stage with a ruined roof near a tarpaulin bearing large photos of the dead militant leaders, declaring the liberation of Marawi from the clutches of militants. His popularity went through the roof.

Duterte then turned to Boracay, one of the world's most bueatiful beaches, which he dubbed as a "cesspool" due to years of disregard of sewage treatment rules. Despite the protests by affected businessmen and resort employees, Duterte shut it down.

He also ordered businesses there to comply with environmental rules before they will get a licence to re-open six months later. He also stopped wild beach parties for good.

The Philippines, a highly mineralised country, has numerous mines. Duterte and former Environment Secretary Gina Lopez targeted miners, ordering them to comply with environmental rules — or face shut down.

The eventual shutdown of mines drove up the global price of minerals including nickel, a key component of battery electric vehicles. The powerful Commission on Appointments, however, ditched Lopez many times, forcing a frustrated Duterte to replace her with a less combative minister, Roy Cimatu, a former military general, who has since allowed most mines to re-open.

Drug war

Drug use and addiction has been a social menace and health concern of the Philippines since the 1970s. At the start of his watch, Duterte rallied Filipinos against substance abuse and the syndicates and personalities that profit from them.

Various accounts placed the number of deaths from drug busts and supposed "shootouts" at 5,000 to 7,000, though the numbers are hard to confirm.

Long before he became President, Duterte’s name had become synonymous with the vigilante group, the Davao Death Squad (DDS).

Duterte used his take-no-prisoners reputation to go down hard on criminality and illegal drugs trade, achieving what previous leaderships found impossible to attain.

In a country with 105 million inhabitants, the numbers involved in the drug-war are mind-boggling: 

Drug war by the numbers

Public profile

The road taken by Duterte to become the country’s chief executive took nearly three decades. A lawyer who admitted having attempted to kill a schoolmate during his law school days at Manila's San Beda College during the late 1960s, he eventually graduated and passed the Bar Exams in 1972 to become prosecutor in his native Davao City for more than a decade.

In 1988, after the ouster of Ferdinand Marcos' government, he was appointed by the Cory Aquino government, along with several other politicians and local leaders, to become Officer in Charge, a de-facto mayor. For more than two decades, he continued to lead Davao City as mayor.

In the years in between, he alternated as vice mayor. Although supporters as early as 2014 had been drumbeating through social media the possibility that he would be running for the country’s highest office, Duterte had projected himself largely as a reluctant president.

Family

Duterte readily admits his frailties. He has made no effort to hide matters pertaining to his family life. He is civilly wedded to Elizabeth Zimmerman, a Jewish-German.

Their union produced three children, Sara Duterte-Carpio who is the incumbent mayor of Davao City, and sons Paolo, elected vice mayor of Davao City in the last elections but had resigned from his mandate due to lingering rumours of his ties to smuggling and drugs.

The third child from the marriage is Sebastian. The President’s marriage with Zimmerman was annulled in 2000. Duterte has a common-law wife, Honeylet Avanceña, with whom he has a daughter.

Duterte had warned relatives of avanceña to avoid using his name to secure government contracts. Sara, his eldest, is now a front-runner in the mid-term 2019 Senate race, according to polls.

FDI

Among the major economic sectors, services recorded the fastest-growth at 6.6 percent. Industry followed with a growth of 6.3 percent, and Agriculture with a growth of 0.2 percent.

Foreign direct investments (FDI) posted an all-time high. Data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows amounted to $2.2 billion for the first quarter of 2018, a 43.5-per cent spike from the $1.5 billion recorded in first quarter of 2017.

Foreign direct investments (FDI) posted an all-time high. Data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows amounted to $2.2 billion for the first quarter of 2018, a 43.5-per cent spike from the $1.5 billion recorded in first quarter of 2017.

Social media

The Philippines is prime Facebook country — smartphones outnumber people, and 97 percent of Filipinos who are online have Facebook accounts.

Duterte, who has made vicious tirades against traditional media, the church, and the Filipino oligarchs behind them, has quickly assembled an army of uninhibited social media supporters. Through the so-called "patriotic trolling", his supporters have been tagged for using Facebook as a weapon.

His most vociferous supporters are bloggers of various shades. Some even do long-form research attacking the "yellow army", combined with extolling the wealth and wisdom of the late dictator Ferdinand Marcos, and denigrating any shade of liberalism. His campaign is also known to have hired online strategists who helped him transform his modest online presence, creating an numerous Facebook personalities and bloggers worldwide.

Today, any social media post against Duterte, or even against Marcos, stirs up a troll's nest, potentially unleashing an avalanche of low-blows and legendary claims. Duterte's camp has ably used it to their advantage.

'Strongman'

Over the more than two decades that he had been Davao City Mayor and later, President, Duterte’s name equate to “political will” and “consistency” — something most Filipinos perceive as severely lacking in his predecessors. In his anti-corruption drive, Duterte did not spare even the people who had supported him during his presidential campaign and his close friends.

A few months after his presidency, Duterte sacked and continues to fire a number of officials he personally appointed. Among them was a drug agency chairman and his justice secretary over a drug kingpin arrested in Abu Dhabi but was acquitted by a local court for "lack of evidence".

Weaknesses

Inflation

Rising cost of goods is a concern. A kilo of rice, for example, cost P50 (Dh3.43) in early July. At the end of that month, it spiked to P54 (Dh3.71) while other basic food items prices are rising at a fast rate given the 5.3 per cent inflation in June.

Filipinos have been confronted with high inflation over the past several months reaching 5.7 per cent in July, 6.4 in August, and 6.7 in September — the higest in Asean region— as prices of basic commodities reached high levels.

To tame inflation, he sought advice from ex-president Gloria Macapagal-Arroyo, an economist and now Speaker of the House of Representatitves. He also warned using emergency powers to go after rice hoarders.

To put the inflation story in context, however, data released by the Philippine Statistics Authority (PSA) show the average inflation rates during the respective terms of the past five presidents are:

If prices spikes are not managed well, and the peso continues to dive, it could weaken people's trust and satisfaction ratings of Duterte.

Customs

Under Duterte’s gaze and that of the international media, bulldozers crushed dozens of luxury and sports vehicles brought in by smugglers, conniving with elements inside the Bureau of Customs (BOC).

But smuggling of vehicles at BOC is just the tip of the iceberg: Drug smuggling is worth so much more.

Evidence gathered by anti-drugs team (PDEA) revealed at least two huge shabu drug shipments went through Customs since the start of Duterte’s watch, including the shipment valued at 11 billion pesos stashed in four magnetic lifters found in a warehouse in Cavite, outside the capital, after it slipped through inspectors at Manila International Container Terminal.

In 2017, a "shabu" (meth) shipment worth P6.4 billion got through, leading to the relief of then Customs Commissioner Nicanor Faeldon, a Marine Captain, who was then replaced by Isidro Lapeña, a retired police chief, and who now has been relieved Rey Leonardo Guerrero, a retired ex-chief of staff of the military. After Duterte moved Lapeña out of Customs, the latter was made head of the Technical Education and Skills Development Authority (Tesda).

In August 2017, allegations emerged during a Senate hearing when a customs broker told the panel he had heard the names of Duterte’s son, Paulo, and son-in-law Manases Carpio, mentioned while seeking to expedite the shipment.

On October 29, 2018, Duterte placed BOC under military control, citing “anarchy” at the agency. He ordered the military to check and clear container vans in Manila and other Philippine ports.

The parade of ex-military men at Customs shows even these few good men found the job too much. Duterte's recent military-takeover order also drew flak as some senators questioned the order's legality. It appears no president, past and present, could ever get anywhere near the smuggling black hole at the messed up BOC.

Foul mouth

The traditional media, the church and the largely emaciated opposition do not pose such a big threat to Duterte, which is quite an accomplishment in itself.

Duterte, who shuns prepared notes and goes into extemporaneous speeches, has customarily hurled swear words at druggies, those suspected of corruption, his political opponents, UN officials, and, recently, God. He even offered to resign if anyone could conclusively prove that God exists.

Duterte believes his mouth won't bring down the Philippines. Many of his supporters don't mind his manner of speaking, and tell others to focus instead on what Duterte actually does, of which they're mostly happy about.

Opportunities

There are real opportunities Duterte and his team could still grab within the second half of his six-year term. The 2019 elections, on May 13, could shift the numbers in the Senate with enough votes to make a shift to a federal form of government happen.

The drive to stem corruption and the massive infrastructure build-up, alongside the moves taken by under Duterte's leadership, could present "tipping-point" opportunities for the Philippines.

Federalism

Duterte has campaigned hard to shift Philippine governance to a federal one, instead of unitary. He believes it will solve many problems, including Manila's clogged up roads and separatism. Federalism, however, is dead in the Senate. Like the horrendous traffic in the capital, the mindset of Manila-based lawmakers (who comprise most of the 24 senators) on federalism is immovable, if not slow. 

Despite his party's "super majority", only four out of 24 Senators actually favour the shift.  

At least 18 Senate votes are required to amend or change the 1987 Philippine Constitution to make it happen.

This could change after the 2019 mid-term elections, if voters elect the required number of senators who favour the shift, giving Duterte a better good shot at one of his key campaign promises.

Build-build-build (BBB)

Infrastructure in the Philippines is currently in disarray due to years of neglect.

Dismal telecommunication services are among the worst in the Asean bloc. Manila’s traffic chaos is legendary and the Metro services in the capital have gone from bad to worse.

One estimate states that traffic in the capital bled the economy tune of 2.4 billion pesos in 2012, an amount expected to increase three-fold by 2030.

Duterte’s answer is BBB, a massive and ambitious 9-trillion-peso ($168-billion) Keynesian spending plan slated until 2022 and aimed to boost productivity through massive infrastructure spending, create jobs and decongest Manila. Funding for these project come under Senate oversight.

Key infrastructure projects under the BBB:

Other major projects:

BBB is an aggressive solution to years of under-investment and daunting problems that had crippled the country even as neighbours like Malaysia and Singapore have zoomed past.

An anti-corruption hotline (8888) is also in place, which Duterte said is a direct number of his office.

Whether it actually works to curb the build-up of inferior-quality government projects or downright siphoning off of public funds — a rampant practice under previous administrations — remains to be seen. Any improvements in transparency of governance has a massive knock-on effect on the economy.

Competitive advantages 

As he approaches the half-way mark into his six-year presidency, could Duterte's policies help the country break out of a low-income nation to a higher middle-income nation? There's a real clamour and oppotunity for this "break-out" moment in the next three years.

With the tax and administrative reforms, BBB and improvements in public order, Duterte has laid down the groundwork for boosting both consumer demand and national productivity — though such a situation could also be inflationary.

Today, Filipinos are proud of the two pillars of their economy — the business-process outsourcing (BPO) industry and overseas Filipino workers (OFWs) — which earned for the country a combined $55 billion ($32 billion in OFW remittances and $23 billion in BPO income).

However, absolute dependence on these two sectors — with the labour-intensive “call centre” industry and OFWs — won’t be sustainable. Without economic development in the countrysides, excess rural population will continue to move into urban areas, providing cheap labour.

While cheap labour boosts competitiveness and powers economic growth, the Philippines can’t compete on this factor alone. Cheap labour, with shrinking birth rates, would eventually get exhausted. The country has to start pushing innovation, much like its richer neighbours, did which saw a spike in per-capita incomes.

Economy

Duterte admits that he is not much of an economist. The Philippine economy grew at a fast clip since he assumed presidency in 2016, a carry-over from the prudent policies of his predecessors. His economic managers are a capable team: the economy grew by 6.0 percent in the second quarter of 2018, largely on the improved peace and order and better investment climate, riding on the anti-corruption drive and cubring government red tape.

Further tightening of regulations in the mining sector and the closure of several mining sites and higher excise taxes on non-metallic and metallic minerals also contributed to the slower economic growth rate.

Bloomberg quoted the Philippine finance chief, Carlos Dominguez, as saying the country could grow by 6.5% in 2018. Manufacturing, trade, and construction sectors are main growth engines.

This puts the Philippines as one of the best-performing economies in Asia, after Vietnam at 6.8 per cent growth and China at 6.7 per cent growth, and ahead of Indonesia’s 5.3 per cent. Ernesto Pernia, Duterte's Socio-Economic Planning Secretary, acknowledged the slowdown was partly due to policy decisions by the government, which include Duterte’s order to close the resort island of Boracay in Central Philippines’ Aklan for a period of six months starting from April.

Threats

China

The Philippines under Duterte appears to be in a bind in its relations with big powers. The Asian nation had been a traditional ally of the United States.

Duterte changed that. He had issued statements about charting a "separate" foreign policy for the Philippines apart from the US sphere of influence. He warmed up towards China and, to a limited extent, Russia.

He had largely been cautious about China's moves over the islets which form part of the Philippines' Exclusive Economic Zone. Duterte frequently praises Chinese counterpart Xi Jinping.

He had largely been cautious about China's moves over the islets which form part of the Philippines' Exclusive Economic Zone. Duterte frequently praises Chinese counterpart Xi Jinping. In February, Duterte caused a stir when he jokingly offered the Philippines to Beijing as a "province" of China. He had been trying to craft a framework on the Philippine-China joint exploration in the South China Sea.

At the same time, Duterte has called upon China to “temper” its behaviour on its claims to the potentially resource-rich area. He had largely been cautious about China's moves over the islets which form part of the Philippines' Exclusive Economic Zone. Duterte frequently praises Chinese counterpart Xi Jinping.

The Philippine leader issued the call amid reports that China warned Philippine military aircraft while flying over its man-made islands in the disputed region. “Well, they have to rethink that because that would be a flashpoint someday,” Duterte said.

Friends

Duterte picked some of the "best and brightest" among his old buddies to help him run the government.

His biggest threats, however, come from some of his own. Though Duterte is not shy to sack his friends — including his former Justice minister Vitaliano Aguirre, as well numerous heads of agencies — government records show many projects had been bagged by his own allies, including Christopher "Bong" Go, whose family-owned construction firm reportedly cornered hundreds of millions worth of government projects, despite not being rated a Category A builder.

Going forward, Duterte has to keep a close eye on the awards of big-ticket projects to ensure the process is fair and that the BBB projects do not end up being lemons to be paid in full by Filipino taxpayers.

Communist rebellion

Duterte's administration has been engaged in on-and-off talks with representatives of the National Democractic Front and the Communist Party of the Philippines (CPP), after freeing some of their leaders. Talks were terminated by the government because of the rebels' attacks against civilians and security forces.

On December 5, 2017, Duterte issued a proclamation designating the CPP-NPA a “terrorist organisation”. Philippines for nearly 50 years.

It was an iteration of a previous declaration by the United States of America, which on August 9, 2002 designated the CPP-NPA as a foreign terrorist organisation (FTO) and continues to include the CPP-NPA in its list of FTOs. The armed communists have been waging an low-intensity war in the hinterlands to establish a communist state in the Philippines for nearly 50 years.

Moro separatists

On July 27, 2018 Duterte finally signed Bangsamoro Organic Law (BOL), previously known as the Bangsamoro Basic Law, providing for enhanced autonomy to the Moro region in Southern Philippines in a peace process helped by Europeans.

The law recognises struggles of the Moro region, in southern Philippines, for its own identity and the right to manage its own affairs in all aspects of governance with less intervention from Manila. A new entity will replace the current Autonomous Region in Muslim Mindanao, which despite years of being in force, had failed to address the root causes of conflict in the South.

Under provisions of the BOL, there will be 75-25 sharing of revenues in favour of the Bangsamoro, an automatic allocation of the annual block grant for the Bangsamoro equivalent to 5 per cent of the net national internal revenue, and cases involving Muslims will be tried in Sharia courts.

As a result of the implementation of the BOL, some 30,000 members of the MILF’s Bangsamoro Army will be deactivated. The Moros in the south have waged a struggle against the Manila government in the north for centuries. It remains to be seen whether BOL will indeed lead to peace in Mindano, and the the rest of the Philippines.

Health

On October 6, 2018, Duterte has revealed that he is awaiting the results of fresh medical tests, adding that “if it’s cancer, it’s cancer”. Duterte, 73, is the oldest person elected president in the country and speculation about his health has cropped up regularly since he took power in 2016.

In a speech late Thursday, the president said he underwent an endoscopy and colonoscopy about three weeks ago but that he was advised this week to repeat the tests. “I don’t know where I’m at now physically, I have to wait for that. “But I would tell you that if it’s cancer, it’s cancer,” he said.

Duterte had earlier admitted to a few non-trivial but non-life threatening ailments, from spinal pain due to a motorcycle crash about a decade ago to a smoking-related disease where blood vessels in the arms and legs can swell and become infected.

“And if it’s third stage, no more treatment. I will not prolong my agony in this office or anywhere,” he added. The statement triggered speculation about his real condition, but Duterte has also made deliberate statements in the past about his health that threw the media into a tizzy.

Is Duterte a 'break-out' leader?

Could Duterte be the "breakout" leader who could drive the Philippines forward to where its better-off neighbours like Singapore has gone?

A breakout situation is characterised by a sudden significant improvement in a short span of time. It appears that despite his verbal tirades that grabs the global media limelight, Duterte has been fairly successful in laying down the basics: curbing crime, corruption and boosting government efficiency.

To leapfrog its more well-off Asean partners, the Philippines must now a adopt and implement an economic strategy away from low-cost, labour intensive industries to high added-value goods and services.

Whether or not Duterte and his managers are able to lead the Philippines to a "tipping point" from low-income to a middle-income nation remains to be seen. It must continue to invest in infrastructure, protect intellectual property, push universities to work with industries and innovate products and services for the word.

By 2020, IMF estimates that the Philippines per capita GDP could further improve to an estimated $9,944, almost double from $5,710 in 2017, based on World Bank estimates. By comparison, Malaysia’s GDP per capita jumped from $18,530 in 2007 to $28,650 in 2017.

As for other Asean countries, IMF estimates GDP per capita levels by 2020: $15,052 for Indonesia, $20,6398 for Thailand, $33,470 for Malaysia, and $105,357 for Singapore.

Will Duterte and his team make the big push to bring the Philippines to the middle-income nation group (per capita of $12,056)? 

His way of doing things have certainly gained unwavering support from the same people who voted him into office. Beyond headline-grabbing verbal eruptions, Duterte has shown a rare ability to address some of the fundamental issues that the impatient Filipino electorate seeks from their leader.

His moves — on taxation, national ID system, boosting goverrnment efficiency, curbing red tape, crime and corruption — are tipping-point moments that, together, form the key to boosting national competitiveness.

Would the Philippines become an economic star with sustained growth under Duterte? It would be interesting to watch how things unfold in the second half of his six-year term.