The imposition of martial law in Mindanao by far has not made a dent on economic growth. Except maybe for tourism, the Philippine economy is poised to extend its robust growth this year.
Marawi City, besieged by Muslim extremists, and even the whole of Autonomous Region in Muslim Mindanao contribute less than one percent to the gross domestic product. Most business establishments and agricultural farms in Mindanao are normally operating, while the national government has so far stuck with its economic reform agenda.
A nationwide imposition of martial law, however, will jolt investors’ confidence, scare away foreign tourists and put many business expansion plans on hold because of uncertainty in the political front. The martial law imposed in the Philippines nearly 45 years ago paved the way for a dictatorial rule, that in turn led to a rise in human rights abuses, business cronyism, costly state subsidies and capital flight.
The economy then, beset by higher debt because of lack of foreign investments and falling revenues, soon collapsed after the inflation rate soared over 40 percent and the peso sank to over P20 at the end of the Marcos regime from P6 to a dollar in 1970. The foreign debt level ballooned from just $360 million in 1962 to $26.2 billion in 1986 due to a mismanaged economy.
President Rodrigo Duterte’s martial law, confined to Mindanao, will not likely lead the economy to a ruin that the Philippines experienced in the early 80s. But global credit rating agency Moody’s Investors Service has warned that a nationwide imposition of martial rule, although unlikely, could undermine economic expansion.
President Duterte could actually turn the Marawi siege into an opportunity to rebuild the city and energize the whole of Mindanao through a massive infrastructure program to create job and economic opportunities in the south. Despite his critics, President Duterte still has the goodwill and the backing of many political and business leaders over his martial law imposition in Mindanao. He should not waste his own opportunity to make a dent on the Mindanao economy, with or without martial law.