DUTERTE’SACHIEVEMENTS AND FAILURES

By Antonio S. Lopez

Fifty months and two weeks into his presidency, people must remember 10 things about the ailing Rodrigo Roa Duterte—his five major achievements and his five major failures.  The achievements gave the Filipino strongman a dizzying public approval rating of more than 81% in most of 2019 (2020 tells a different story).

His five major achievements:

1)  Significant poverty reduction and economic inclusion

Significant or a 6.8-percentage-point reduction in poverty from 23.5% of the population when Duterte began his presidency to 16.7% by the end of 2019—equivalent to 6.1 million Filipinos rescued from poverty, defined as earning just $2 a day, thanks to three major policy reforms – the Rice Tariffication Law (which removed rice monopolies and allowed importations that brought down rice prices; rice is 15% of the consumer basket); the TRAIN or Tax Reform for Acceleration and Inclusion Law of January 2018 (which exempted from hefty income taxes those earning no more than P250,000 a year, the bulk of low income earners, thus freeing billions for consumption or savings); and the Universal Health Care Act, a socialist act copied by countries like Thailand but which is being undermined by massive corruption at the state health insurance agency, PhilHealth.

2) The campaign against illegal drugs

Hugely popular, with almost two of every three Filipinos believing the number of drug users in their area has been reduced since Duterte came to power in 2016, Tokhang (a slang meaning knocking at your doors in search of criminals) has resulted in some 7,000 drug lords and addicts eliminated from the face of the earth in just two years (twice the number the late Ferdinand Marcos was accused of killing in 20 years of strongman rule; human rights watchers insist Duterte killed more than 27,000  but give no proof).  

Crime likewise came down.  The campaign invested Duterte with the gravitas of a strongman, a leader who can get things done by the sheer power of his will – and that of his police and armed forces.

3) Sanctioning of abusive utilities

The President went hammer and tongs against the utilities like water and telcos.   He sought to scrap the long-term contracts, secured in 1997, of the two major water concessionaires serving 16 million customers in the Metro Manila and nearby provinces—the Maynilad Water of the First Pacific Ltd group of Antoni Salim of Indonesia and Filipino CEO Manuel V. Pangilinan, and the Manila Water Co. of the old-time Ayala family and the Singapore government—unless they accepted new contract with better terms to the Philippine government.  Stung, the two water companies gave up P11 billion in arbitral awards –refund from unapproved rate increases.  Ayala’s Manila Water sold 25% of its equity to ports tycoon Enrique Razon for P10 billion with the latter eventually taking control of the utility.

4) Breakup of some oligarchies

The closure on May 5, 2020 of broadcast behemoth ABS-CBN Corp. of the old Lopez oligarchy is not a retribution against a pesky media institution nor intended to intimidate if not silence critics in media.  It is, if you believe government, an attempt to break up oligarchies.  The Lopezes are the original Philippine oligarchy, with their power and influence dating back to the 1800s, or seven generations.

The House of Representatives, where radio-tv franchises originate, rejected on July 10, 2020, nine bills seeking to renew for another 25 years, the franchise of ABS-CBN, which expired on May 4, 2020.   In one year, listed ABS-CBN’s market value dropped by 56% from P13.54 billion in May 2019 to P6 billion today.  The company had to lay off nearly all its 11,000 workers.

In the first three years of his six-year presidency, Duterte had lashed out at so-called oligarchs, among them self-made property tycoon Roberto V. Ongpin (who is actually related to Duterte on his mother side, Roa), Manuel V. Pangilinan of the telco behemoth PLDT and its Indonesian First Pacific companies, and the Ayala family, owners of the Philippines’ oldest conglomerate. Later, in the wake of the pandemic, Duterte apologized to Pangilinan and the Ayala family for the hurting words.

Ongpin divested from one of his listed companies and was not bothered by Duterte ever since. Pangilinan’s Maynilad Water and the Ayala family’s Manila Water waived claims to arbitral award of more than P11 billion in water fees due from the government and promised to remedy allegedly “onerous” provisions in their long-term concession contracts. Relatedly, the government managed to collect P6 billion in overdue aviation fees from Philippine Airlines owned by Lucio Tan, once reckoned as the country’s second richest Filipino.  After a warning from Duterte, the Consunji family which built the quake-damaged Ecoland condos in Davao was forced to refund unit owners at 125% to 150% of acquisition cost.

Martial law not needed to run after oligarchs

Four days after the House rejection, Duterte addressed troops in battle-weary Jolo, Sulu. The President enthused in Pilipino and  English: “I can die, fall from a plane. I am very happy. You know why? Without declaring martial law, I dismantled the oligarchy that controlled the economy of the Filipino people.”

“The rich,” he said, “milk the government and the people.  Without declaring martial law, I destroyed the people who strangle our economy and do not pay (taxes).  They take advantage of their political power.”

The emphasis on “without declaring martial law” is meant to convey that Duterte was more powerful (or probably smarter) than the late Ferdinand Marcos who had to declare martial law in 1972 and proceeded to breakup the various oligarchic families starting with the Lopezes whose ABS-CBN radio-tv network was seized as part of the strongman’s effort to reform society.

5) Savvy fiscal management

Under Duterte, the Philippines achieved its highest ever credit rating—BBB+ in April 2020, despite COVID-19.  In June 2020, Japan Credit Rating Agency even upgraded the Philippine rating to A-, with a stable outlook.

Japan’s top debt watcher, JCR is smaller than the top three credit rating agencies Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings.

But the JCR upgrade came at a time when the Philippines was deep in the deepest recession in its history as result of the world’s longest and most severe lockdown that shut down the economy for seven months, eviscerating 73% of GDP, closing 70% of businesses, laying off  some 20 million workers, and impoverishing half of the population in an instant.

The five major failures of President Duterte are:

1) The Philippines’ Greatest Depression

In the second quarter 2020, the Philippine economy slumped to its lowest ever in the country’s history, a 16.5% contraction in economic production.  On top of the 0.2% contraction in the first quarter 2020, the 16.5% GDP growth drop means the country is now in recession with first half contraction of 9%.  It is the worst recession in our history. 

For the whole of 2020, the economy is expected to decline by 10%. BizNewsAsia estimates the GDP contraction for the whole could be as large as 30% — assuming a loss of P1.5 trillion for each month of lockdown and the lockdown – the longest and severest in the world – has run for seven months—meaning half of economic production is gone.

Finance Secretary Carlos Dominguez explains that “no matter how much money countries pump into their economies, their GDP would have shrunk massively, anyway. It is not the sheer size of the stimulus package that matters now but also whether it is actually saving the productive parts of the economy. This is because the problem is not a systemic contraction or a cyclical bust. Simply, necessary mobility restrictions hamper aggregate demand.”

No recovery in 2021

Government economists had earlier projected a recovery of 7% to 8% in GDP growth rate in 2021.  That is now overly optimistic.  Without a vaccine for general use, contraction could continue well into 2021.

When the President came to power in July 2016, he stumbled into the greatest and longest economic expansion in the country’s history—70 consecutive quarters of growth.  Duterte himself added 14 quarters of growth before it went negative in the first quarter of 2020.

Begun in 1999, the expansion meant a 4.2-fold increase in the size of Philippine economy (from $72.2 billion in 1998 to $304.9 billion in 2016), a dramatic reduction in poverty, and middle income status for Filipinos, with their per capita income exceeding $3,000.

Worst economic performance

Today, Duterte presides over the worst economic performance of the Philippines ever. It is also the worst in ASEAN.  The economic collapse also makes him the worst president ever in terms of economic performance.

And that is all due to the second biggest failure.

2) Pandemic mismanagement

Duterte imposed one of the earliest lockdowns in the world. The longest and most strict lockdown in the world failed to contain the pandemic.  When the President imposed the lockdown on March 15, 2020, there were only two confirmed cases 10 days before that. At this writing, the Philippines is the pandemic epicenter in the 11-nation ASEAN with a total of 248,947 cases.  It is No. 22 in the world in number cases, only 9,000 cases below No. 21, Germany.

Still, Finance Secretary Carlos Dominguez says “the decisive (lockdown) helped us avert an estimated 1.3 to 3.5 million infections according to researchers from our universities.  The lockdown enabled us to reinforce our health system and build up our capacity to do widespread testing in our communities. From just around 1,282 actual PCR tests per day conducted in the last week of March, our capacity has grown to about 32,000 average daily tests this (August).”

Infections worse without lockdown

Adds Dominguez: “Without the lockdown, the rate of infections and deaths could have been much worse. The latest data suggest that a little over 1% of all COVID-19 cases in the country are severe or critical. Our mortality ratio, on the other hand, is at 2.5 people per a hundred thousand. We are deeply concerned about the mortality ratios we are seeing in some countries. Based on recent data, the EU member states average 31 deaths per hundred thousand, the UK is at 70, Spain at 61, Sweden at 57, and the US at 52 people per hundred thousand.”

3) Unprecedented human rights violations

What has made Duterte a strong president, the vicious illegal drugs campaign, has also given him one of his major failures—massive human rights violations.  Critics say he killed more than 27,000 in the guise of eliminating the pervasive illegal drugs curse. 

Human Rights Watch says many of the 27,000 are “vigilante-style killings perpetrated by police officers themselves or by killers linked to the authorities.”

Authorities admit to 7,000 deaths during the campaign.  Any numbers above that are classified as “homicides under investigation”.

Aside from the drugs war killings, the Human Rights Watch has also noted the politically motivated detention of his most prominent critic, Senator Leila de Lima, the removal in May 2018 of Chief Justice Maria Lourdes Sereno, the revocation of amnesty given Senator (now retired) Antonio Trillanes IV who led mutinies in 2002 and 2007, and the passage of a new Anti-Terror Act (ATA).

Recently, there had been sensational killings of known political activists, human rights defenders, and alleged New People’s Army commanders.

Reporting on events in 2019, the Human Rights Watch noted wryly that “State security forces and government-backed paramilitaries continue to harass, threaten, arbitrarily arrest, and in some instances attack and kill political activists, environmentalists, community leaders, and journalists.”

Relentless war on drugs

Duterte has vowed to continue his “war on drugs” which will be “as relentless and chilling on the day it began.”  He wants death penalty, banned under the Constitution for most crimes, to be reimposed for drug crimes.

But the people love the President for the “drugs war”.  In May 2019, two top allies made it handily into the Senate elections which solidified Duterte’s power base.  Longtime aide, Christopher Go, and Davao’s former police chief, Ronaldo dela Rosa, who initially spearheaded the “drug war,” were elected to the Senate. Dela Rosa was named to head the Senate committee charged with investigating police matters and the “drug war.”

4) Failure to contain the communist insurgency and the Muslim separatist movement

The killings of political activists and alleged NPA leaders have failed to dent the 52-year old communist insurgency.   Muslim terrorists are on the warpath marked by a new phenomenon – suicide bombers.

5) Coddling of the police and the military

Duterte has employed more generals, from the military and the police, than any other president before him.  More than 45 star-rank officers occupy cabinet and civilian positions in the government. 

Despite the overwhelming dominance of generals, the Duterte administration has not proved itself any more competent nor any less corrupt than past administrations.

When the chief of the national capital’s police force was caught on social media having a breakfast birthday party with more than 50 guests (despite strict lockdown prohibiting gatherings of 10 or more people in one place at the same time), Duterte refused to fire the erring general.

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