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Duterte's China groveling tells wider story of his economic failures

Kowtowing to Xi Jinping was Philippine president's original sin

| Philippines
People stand outside shuttered businesses as they queue for free goods in Quezon city, Metro Manila, on Apr. 19: what Duterte forgot to look out for was the economy.   © Getty Images

William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."

For a supposed tough guy, Rodrigo Duterte sure does love bending over for China -- again, and again, and again.

The Philippine president assumed the position right out of the gate. In July 2016, less than two weeks into a presidency that can match Donald Trump's for chaos, Manila won a major case against Beijing over contested waters in the South China Sea.

The suit, filed by predecessor Benigno Aquino, gave the Philippines big bragging rights in Asia. Kudos to Manila, geopolitical wonks said at the time, for taking on Beijing's bullying, David-and-Goliath style. Manila's landslide victory at the Permanent Court of Arbitration at The Hague put China on the defensive in a region that shudders at its might.

Never mind, tough guy Duterte essentially said. China's largess, starting with aid, loans, and joint oil and gas exploration deals, was just too sweet for the man promising to make the Philippines great again.

Now, Team Duterte is suffering seller's remorse as China flexes its military muscle in Asian seas. The clearest evidence? An expletive-heavy May 3 tweet by Foreign Minister Teodoro Locsin, shocking a global community that had become desensitized to Duterte's penchant for dropping F-bombs.

This dust-up might seem unrelated to Duterte's economic failures. Yet it is a timely reminder of why the Philippines might be among the region's biggest losers post COVID-19.

Kowtowing to Chinese President Xi Jinping was arguably Duterte's original sin. Still, the longtime Davao City mayor has also prostrated himself at home to the Marcos family, a gang whose influence predecessors had sought to reduce.

Duterte took power 30 years after Ferdinand Marcos was ousted from the presidential palace. A People Power revolt led by Corazon Aquino, widow of assassinated Marco challenger Benigno Aquino, ended the cartoonishly corrupt dictator's three-decade reign, and Aquino was elected national leader in 1986.

Reformists found some poetic justice in her son being the man to get the Philippine economy back on track. From 2010 to 2016, Aquino attacked graft, went after tax cheats, increased transparency and restored order to the national balance sheet. That scored Manila its first-ever investment-grade ratings.

Aquino harnessed that success to take on China's maritime land grabs. And all those military ports and landing strips Xi claims Beijing is not building -- against mountains of satellite-image evidence.

And then Duterte arrived to ease Xi's mind in hopes Beijing might throw the Philippines economy some scraps. Irony abounds when you consider Duterte's 22 years running a southern city famed for smashing crime -- like some sheriff Clint Eastwood might play. It earned him the nickname "Duterte Harry."

Rodrigo Duterte, right, is shown the way by Xi Jinping in Beijing in October 2016: Duterte arrived to ease Xi's mind.   © Reuters

On Monday, hours after Locsin lobbed rhetorical bombs on Twitter, Duterte was again assuming the position. "China remains to be our benefactor," Duterte said. "Just because we have a conflict with China does not mean to say that we have to be rude and disrespectful."

This obsequiousness will seem at odds to the United Nations, former U.S. President Barack Obama, the European Union, Canada, Colombia, Mexico, the Pope, Holocaust survivors, women and everyone else Duterte has gone after.

An interesting question is how Joe Biden's arrival is throwing the Duterte-Xi bromance off balance. Though former President Trump played tough on China, the bull market in patents Beijing threw daughter Ivanka's way is a reminder of how Xi had his way with Trump, too.

Since Biden entered the White House in January, the U.S. signaled it has Manila's back. Last month, Team Biden hit China for using "maritime militia to intimidate, provoke and threaten other nations." Odds are, Biden also will stand with Scott Morrison's Australia and, increasingly, Jacinda Ardern's New Zealand in pushing back against Beijing's bullying.

If only Duterte had stood up to Beijing in 2016, his government might have a foreign-policy win or two to trumpet. If only at home Duterte had stuck to Aquino's guns. Duterte was elected to add firepower to Aquino's governance push, which morphed the Philippines into an investment darling. Instead, Duterte pivoted to a bloody war of choice against drug dealers.

Duterte's emphasis on speed-over-transparency with giant infrastructure projects has been great for the graft industry. On Aquino's watch, Manila's ranking in Transparency International's corruption perceptions index improved to 95th-place. Today, it is 115th, trailing Macedonia, Mongolia and Panama.

In this context, Duterte's odd obsession with the Marcos clan is a terrible look. He even gave plunderer Marcos, who died in exile in 1989, a hero's burial. He lobbied early and often to guide Ferdinand Marcos Jr. into the vice presidency.

What Duterte forgot to look out for was the economy. Mostly, he rested on laurels of the rapid growth Aquino bequeathed him. That, and whatever business "benefactor" Xi tossed Manila's way. Along with corruption returning, so is inefficiency. In 2016, the Philippines was ranked 42nd in the IMD World Competitiveness Scorecard. Today it is the 45th.

The most important failing grade, though, is COVID-19. Things are so bad that Duterte's government is asking Filipinos working abroad not to return home anytime soon as infections surge and quarantine-facility funds run low.

So is the confidence that Duterte, 1,771 chaotic days on the job, has what it takes for right an economy losing more and more ground. Somehow, I doubt continuing to roll over for Xi will save the day. Expletives are optional.

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