Three things stand out during President Duterte’s first 100 days in office: one, a vicious and bloody campaign against illegal drugs and its users and dealers; two, the hardening of presidential policy statements against longtime ally and mentor the United States; and three, failure to cut red tape and corruption in the bureaucracy.
The first cut drug supply by 90 percent from streets and reduced crime by 49 percent. Some 3,300 died in the campaign, half of them killed by vigilantes. In the process, the tough as nails Duterte acquired a global reputation as a murderer and one lacking in the manners and mores of a leader of a nation with more than 102 million, the 12th largest on earth. Meanwhile, some 800,000 drug addicts have surrendered. Duterte says their number will reach a million by yearend. Accordingly, the President has extended the drugs campaign from three to six months to another six months. Some 35 people are killed daily because of drugs.
The second strained relations with America and brought it to the precipice of ruin, breakup, if not total collapse. Commander-in-chief Duterte wants American troopers out of Mindanao, pronto. He wonders why the Enhanced Defense Cooperation Agreement, despite the fact that it has the effect of a treaty or an executive agreement (between two presidents of sovereign nations) and would effectively return US bases in five agreed locations the Philippines, was signed only by the Filipino defense secretary then and the US ambassador, the outgoing Philip S. Goldberg whom Duterte once described, in Pilipino, as “gay”. A supine Supreme Court last January 2016 declared the Edca “not constitutionally infirm.”
The third may be a reflection of the fact that corruption in government is so endemic bureaucrats treat it as a matter of right and perk and that the bureaucracy is so well-entrenched it is nimble enough to repel threats from no less than the President for reform or perish.
It still takes two months to get an appointment to apply for a passport at the Department of Foreign Affairs. The first available date is Nov. 29. Next to that of course, is December. The only thing that beats red tape at DFA and the slowest internet of Filipinos is the colossal traffic in Metro Manila, rated as the worst in the world.
On Friday, Sept. 30, floods coming from clogged drains in Balintawak market in the north rose more than a meter. They caused traffic to standstill for 22 kilometers and for six hours up to the Naia. Crossing from Resort World hotel to Naia Terminal 3 just across the street, took two hours by car. Walking, but under the rains, would have been 12 times faster.
The cherubic GM of the Metro Manila Development Authority, Tim Orbos, discovered the cause of the traffic at 11 p.m. After fixing it, he found two MMDA traffic enforcers under a dark shade mulcting a motorist. He scolded the two but they scolded back, angry that Orbos, their boss whom they did not recognize, was interfering with traffic duty. The first guy was fired the next day. The second, who had no business being in the field because he was supposed to be assigned at the main office, is undergoing “due process.”
Had the two enforcers been engaged in illegal drugs, they would have been shot on the spot, in accordance with Duterte’s doctrine of anyone caught in the act of committing a crime should be dealt with extreme prejudice. But then Tim Orbos is a former seminarian and according to the most celebrated tablet of all time, Moses’. murder (Commandment No. 6) is a crime worse than stealing (Commandment No. 8).
There are still fixers in various offices of the Land Transportation Office. There are still no new driver’s licenses and no vehicle plates. October was the promised arrival of nirvana (arrival of licenses and plates). No sight of that. And the three days maximum time demanded by Duterte for government agencies to process papers, permits or applications of ordinary mortals doing business with government remains a dream.
Overall, the medium and long-term outlook is mixed at best. The Philippine economy remains robust. But global growth is sluggish.
Duterte plans to impose massive tax increases on products and services consumed by the poor—diesel, by P10 per liter; sugar by P10 per liter of soft drinks, and no more value added tax (VAT) exemption for seniors. VAT itself will rise to 16 from 12 percent, already the highest in Asia. The tax on the rich will go down. Inheritance tax will drop to six percent, from 20 percent; the highest tax rate on corporate income will drop to 25 from 30 percent. Only 20 families own the more than 230 companies listed in the stock exchange.
The World Bank gloats about the Philippines’ strong and stable economic fundamentals begun and achieved during the nine years of the much-maligned Gloria Arroyo administration, resulting in unprecedented 71 quarters of consecutive economic growth. At the same time, global growth will contract to 2.3 percent this year, from 2.6 percent in each of 2015 and 2014.
The economy grew 6.9 percent in the first half this year, up from 5.5 percent in the first half of 2015. “The economy continues to defy global trends,” notes the World Bank. Recovery in rich countries failed targets. Global trade growth remains sluggish. Capital has become volatile, thanks to “Brexit” or Britain’s departure from the European Union beginning March 2017.
Credit for the Philippine growth goes to Filipinos, not outside investors. Capital formation, or investments made by businesses in machinery, equipment and buildings or factories rose 27.1 percent in the first half of 2016, up tremendously from the 16.7 percent rise in investments in durable equipment and construction in the first half of 2015.
Credit goes to the Filipino consumers, too. Their spending this year has been the fastest since 2012, at 7.2 percent year-on-year, thanks to strong remittances of Filipino expats.
Services, basically wholesale and retail (the malls), banking (which handles the remittances), and the selling of real estate, grew 8 percent in the first half to account for 60 percent of GDP (Gross Domestic Product or total economic output). Manufacturing was equally strong, up by 7.2 percent.
Food production has been bad, however. Agriculture is down 3.3 percent in the first half 2016. Blame bad weather and the incompetence of BS Aquino’s agriculture secretary, Proceso Alcala who was linked to smuggling and whose family is linked to illegal drugs.
Food is 55 percent of an average family’s spending. Without adequate food supply and onerous taxes like P10 a liter tax on diesel (the mainstay of fishermen and small irrigation pumps), how can Duterte reduce poverty incidence from 26 percent at present to 17 percent by 2022? The 9-point reduction is equivalent to freeing 10 million individuals from the clutches of poverty in six years.
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