The “Philippines’ Donald Trump” Surprises Critics By Unleashing “Long-Term Economic Boom”
ZeeoHedge.com
With shocking statements like “I don’t give a shit about… the son of a bitch United Nations“, “why are you Americans killing the black people there, shooting them down when they are already on the ground?”, calling the US ambassador to his country an “Annoying, homosexual, son of a bitch” and even joking about gang rape, not to mention his radical policies including the “no questions asked” killing of hundreds of drug dealers, the Philippines new president Rodrigo Duterte quickly got the nickname of the “Philippines’ Donald Trump.” More importantly, he is also seen as unleashing an unexpected “economic boom” success story.
As Reuters reports, less than two months in office, Duterte is getting high marks from the business community for policies that could engineer an economic surge and companies say they are making new investments as a result.
Shockingly, while the Philippines “Donald Trump” may be getting – and has been getting – headlines for a bloody war against drug dealers and users, less attention has been paid to one of Asia’s few economic success stories. To be sure, some of the groundwork was laid by Duterte’s predecessor, President Benigno Aquino, who took growth above 6% over his six-year term , but executives are cheering the new administration’s focus on building new infrastructure and say it could spell the start of a long-term boom. Some even see Duterte’s violent and highly controversial anti-drugs campaign as potentially positive.
“We are in a very good spot,” said Antonio Moncupa Jr., president and CEO of East-West Banking Corp, one of the top 10 lenders in the country. “The pronouncement of government prioritising infrastructure spending, accelerating it and cutting red tape, solving peace and order, I think all point to very good prospects ahead.”
It’s not just hype: last week, the government announced that the Philippines’ economy grew at 7% in the second quarter from a year earlier, its highest level in three years. It makes the Philippines the fastest growing among all countries that have reported so far for the second quarter.
When Duterte won the May presidential election, there were questions marks over how he would handle the economy, very much as there are countless question marks how Trump would handle the US economy should he become president.
Duterte, who is nicknamed “the Punisher”, has been unapologetic over unleashing the police on drug users and dealers. Philippine National Police Chief Ronald Dela Rosa said on Monday that there have been 1,800 drug-related deaths since Duterte took over as president, with 712 of those at the hands of the police.
Amonther his controversial policies, the new president has launched a crackdown on online gambling, vowed to destroy oligarchs, warned that the country could live without a mining industry if environmental standards were not met and called the U.S. ambassador a “gay son of a whore”.
Controversial, but effective.
Duterte has a 91% approval rating in the latest public survey and businesses are lining up to announce expansion plans. The mainstays of the economy – remittances and the outsourcing sector – are flourishing and boosting domestic consumption.
It is almost as if “strongman” administrations lead to an economic renaissance.
“Business will be good under this administration,” BDO Unibank executive vice-president Luis Reyes said of Duterte. “Concerns centre more on the extra-judicial killings.” Supporters of Duterte say even as the long-term mayor of the southern city of Davao, where he earned his reputation for busting crime, he created the conditions for business to flourish.
Reuters adds that Duterte’s reputation of carrying out his promises has given businesses plenty to look forward to – for instance his vow to make spending on infrastructure a priority. “I believe infrastructure is going to grow very fast and it will have a double or triple effect,” said Henry Schumacher of the European Chamber of Commerce in the Philippines. “Money will be available. An iron fist is going to be behind it.”
One example of how Duterte is supercharging the economy using “unconventional” means: in May, Duterte told the country’s main telecom providers to speed up the internet, or he would junk laws that prohibit foreign competition. It worked.
Duterte’s economic plan also includes lowering corporate and income taxes and a commitment to invest in education, to reap the demographic dividend of the country’s young population.
Before he was elected, few believed Duterte would succeed in turbocharging the economy. He is doing just that, despite being underestimated. More importantly he is doing that with absolute disregard for the “establishment”, for norms, and for conventions. Which begs the question: when norms, conventions and the establishment have failed again and again, perhaps openly flaunting them is the only approach that works (as much as this would lead to nervous breakdowns by the entire tenured economist establishment). In which case it is worth asking if the “US version” of Duterte would not lead to similar “greatly unexpected” results for the US economy?