The Hongkong-based Political and Economic Risk Consultancy Ltd. is a well-regarded consulting firm, founded and still led by American Robert Broadfoot, an Asian resident since 1975. Among other things, it tracks the comparative governance systems in various Asian countries.
In its latest report this week, PERC had some unkind words for the Philippines, calling our political governance the weakest in Asia. According to its analysts:
The quality of governance has deteriorated sharply under Duterte.
Abrupt policy changes under him have not delivered substantial gains, despite his popularity.
Duterte has consistently overestimated his ability to solve major problems and translate his policies into action.
As proof of these claims, PERC cited Duterte’s war on drugs, which he recently conceded was impossible to win within his original deadline of six months; his “inability to deal with the Marawi attacks”; and the lack of meaningful infrastructure investment inflows a year after he announced his foreign policy pivot to China, the country we hate on maritime grounds but love for investment reasons.
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We’re assuming that the guys at PERC have nothing but the best intentions for us, since they’re so impatient to see major improvement just a year into the current presidency. But perhaps impatience may not be the best default mode for consultants about Asia, who ought to be familiar, and comfortable, by now with the deliberate way that things are done in this region.
Had they waited a bit longer before writing their report, they would have seen the complete retaking of Marawi by government troops just last week. And if they’re willing to wait a bit longer in the future, they may be seeing a flood of investment inflows that were promised to Duterte only a few months ago when he visited China.
The progress of the drug war is an example of how one drives a car: not with steering wheel permanently fixed, but constantly adjusting left and right. PERC praised Duterte’s “strong, direct approach to dealing with problems,” and that is certainly the attitude he displayed about drugs—complete with the roughest of language—that helped get him elected to office.
Since then, however, he’s discovered that approaches that worked in a city like Davao do not simply or easily scale up for use in a metropolis like Metro Manila, let alone a country of a hundred million. And we’ll wager that he’s quite distressed about finding out that his spearpoint in the drug war, the PNP, is a pretty blunt and rusty weapon that may need a thorough cleaning-up.
These are lessons that had to be learned at some cost. From his latest pronouncements, it seems that the President has profited from the experience, is learning to use a whole armory of policy weapons in the drug war and not just one or two, and is settling in for a long, uphill fight against the ever-lengthening list of enemies that he was hired in 2016 to put down.
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Other ratings—the ones issued by people who vote with their pocketbooks—are more sanguine about our progress.
According to the Philippine Statistical Authority, the total of investment pledges approved by the country’s seven investment promotion agencies (IPAs) totaled P230 billion in the second quarter of this year, an increase of 30 percent year-on-year. [Note that these pledges are different from actual investment inflows which are monitored by the central bank.]
The picture gets a bit mixed when you take a closer look. Pledges by local investors explain ALL of the increase. This isn’t surprising, for the obvious reasons: they are thoroughly at home in this business culture; they face no currency risk; inertia and familiarity make it easier for them to reinvest here rather than go prospecting abroad; and, perhaps not least of all, they “get” the President, in a way that foreigners simply can’t.
In contrast, approved pledges by foreign investors totaled P18.2 billion last quarter, down by 55 percent year on year. A lot of this can be ascribed to the return—albeit slowly—of economic growth in their home countries, as interest rates rise. But some of this will also have to be blamed on increasing bearish sentiment, not just about the President but also about our entire political situation.
This is something we hope our senators will remember before going ahead with their version of a tax reform bill that may strip away as much as forty percent of the additional tax revenues originally contemplated by the administration. This wholesale weakening of political will—not by the Executive but by the Legislature—will not go over well with the foreign investors and analysts who’re watching us.
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A bullet that government dodged in the nick of time was a foolish attempt by House leaders to exempt congressmen from being arrested for traffic violations, even if a pedestrian had been run over. No less than the Constitution was cited, “that [senators and congressmen] shall, in all offenses punishable by not more than six years imprisonment, be privileged from arrest while Congress is in session.”
We’ll wager that that exemption was really intended to protect legislators from being arrested while in session, because that would obviously disrupt legislative proceedings. But interpreting it to mean protection even on their way to and from work was clearly an overstretch.
Luckily, Duterte himself, through his spokesman, asked the congressmen to emulate his own “modest lifestyle.” When the Speaker himself has taken to locking the doors of Congress against tardy House members, and marking down absences, you can see why that harebrained proposal thankfully died a quick death. Nope; at least on matters of punctuality and attendance, the congressmen haven’t earned the right to be treated better than the rest of us.
Readers can write me at gbolivar1952@yahoo.com.