Prospects for the Philippine economy under the Duterte presidency.

• Author: Villegas, Bernardo M.

President-elect Rodrigo Duterte is an enigma. Considered as an "outsider" in the current political structure, with meager electoral machinery at his disposal, he nevertheless confounded critics with a landslide victory on 9 May 2016. Unlike the other presidential candidates, Duterte's campaign was short on concrete economic policies, but long on areas that touched a sensitive chord with the citizenry: stamping out corruption; restoring peace and order; eliminating drugs (which he considers as the scourge of society); and exercising decisive leadership. Now that the electoral dust has settled, it is time to examine what type of economic order one might expect from a Duterte presidency.

The first major point to resolve is where to position Duterte on the political spectrum, as this will influence his economic policies. Prior to the elections, presidential candidate Duterte shocked members of the Makati Business Club--a forum composed of senior executives of the leading business corporations in the Philippines --with a rambling speech replete with expletives, but with little content about the economic policy that he would follow if elected as president. (1) During the campaign, he referred to himself as a "socialist".

How real this "socialist" streak is could be revealed through an examination of Duterte's accomplishments when he was mayor of Davao City. Davao entrepreneurs waxed lyrical about how business friendly their mayor of some twenty years had been. He not only transformed one of the most violent cities in the country into a very peaceful community with low crime rates, but he also significantly improved the business climate by shortening the time for securing all types of business permits, getting rid of corruption in the bureaucracy and significantly improving the city's infrastructure. Thus, his many years of experience of respecting market forces and the human rights of individual economic initiative contrast markedly with Duterte constantly referring to himself as a "socialist".

Given his track record, Duterte was in truth and in deed not a socialist but a social democrat along the lines of the social market economy of the former Federal Republic of Germany. As Carlos Dominguez III, the presumptive secretary of finance under the Duterte administration, announced the eight-point economic agenda that Duterte intends to pursue, it became clearer that Duterte is far from being a socialist. (2) He has no intention of nationalizing strategic industries, distributing private lands to small farmers...