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Duterte's populist rants risk further harm to ailing economy

Philippine president had more to say about anointed successor than economic recovery

| Philippines
Rodrigo Duterte, right, speaks beside Senator Christopher "Bong" Go on Mar. 12: the Philippine President repeatedly praised his likely heir apparent.   © Malacanang Presidential Photographers Division/AP

Richard Heydarian is an Asia-based academic, columnist and author of "The Rise of Duterte: A Populist Revolt Against Elite Democracy" and the "The Indo-Pacific: Trump, China and the New Struggle for Global Mastery."

Confronting the greatest crisis in a generation, Philippine President Rodrigo Duterte delivered his fifth state of the nation address this week. Instead of providing a clear road map toward revival, it exposed his growing sense of vulnerability, and how he can extend his authoritarian agenda.

Instead of using the speech to outline how his administration will rebuild an economy brought to a virtual standstill by the COVID-19 pandemic, an exhausted and increasingly besieged Duterte fell back on the populist posturing that has served him well in the past, lashing out at the straw men he blames for his country's problems.

Constitutionally limited to a single six-year term, with the next presidential election less than two years away, Duterte and his allies appear increasingly worried at the mounting discontent over his job performance. Ensuring the victory of a preferred successor has now become an existential issue. Concerned not just about his legacy, Duterte wants to shield himself from, among other things, possible prosecution over his human rights record.

When COVID-19 first reared its head, Duterte, similar to other populists around the world, adopted a broadly dismissive attitude, claiming "everything is well in the country," even though a clearly alarmed China had already locked down the entire province of Hubei. To his credit, Duterte was nimble enough to perform a U-turn in March, deploying the military to enforce one of the world's longest and strictest lockdowns.

But Duterte had no follow-up plan, failing to balance public health concerns against economic recovery. By shuttering up to 75% of commercial activity, Duterte unleashed the worst economic crisis since the 1980s. But he still failed to contain the spread of the virus. Today, the Philippines has the worst outbreak in Southeast Asia, with the largest spikes in new cases and the highest fatality rate.

Moody's Analytics has warned that the Philippines is the only country in the Asia-Pacific region that has failed to secure a third-quarter rebound. Oxford Economics, meanwhile, has projected a 6.9% contraction this year, the worst in contemporary Philippine history.

The government's fiscal response has also been tepid. Though Duterte correctly highlighted the Philippines' improved credit rating, which has helped to secure large-scale recent borrowing, more than four months into the crisis there is no sign of a consolidated recovery and stimulus program.

More than a third of businesses have been forced to close. Millions of Filipinos face unemployment. The International Monetary Fund has warned that decades of anti-poverty gains are now in peril. Yet Duterte is still to present a blueprint for rebuilding the economy.

A deserted public market in Manila, pictured on Apr. 24: more than a third of businesses have been forced to close.   © Reuters

While the lockdowns have hampered the ability of polling agencies to measure Duterte's approval ratings, past patterns suggest he is vulnerable in the face of a poorly performing economy. A quality of life poll by Social Weather Stations in June revealed the "worst trend in survey history," with more than 8 out of 10 Filipinos complaining of deteriorating living conditions.

No wonder then that Duterte is reverting to the populist rhetoric that drove his approval ratings to record highs last year.

He kicked off his state of the nation address with an attack on the Lopez family, owners of the ABS-CBN media empire that Dutere succeeded in shutting down. Other targets included the Ayala family, who control some of the Philippines' biggest infrastructure assets, and Manny Pangilinan, another liberal-minded billionaire.

After winning popularity points last year by questioning the privatization of public utilities such as water, Duterte is now zeroing in on the telecommunications sector, warning the owners of the country's two biggest networks, namely the Ayalas and Pangilinan, to lift their game or face losing their networks.

The president's words matter. Earlier this year Duterte forced the Ayalas to sell a major stake in their water company after the value of the shares started falling. His latest populist rants could precipitate a similar outcome in the telecommunications sector.

By all accounts, the maverick populist seems to have all but officially endorsed his longtime aide, the recently-elected Senator Christopher "Bong" Go as his preferred successor. Throughout his state of the nation address, and in many other recent public appearances, Duterte has repeatedly praised his preferred heir apparent.

A loyal and reliable adviser, Go is widely seen as Duterte's ultimate alter-ego. If anything, the aide-turned-senator has acted as the de facto liaison for coordinating the administration's executive and legislative policies over the past year. Were Go to secure the country's highest office, he would likely continue Duterte's key policies, rely on his advice and political support as an elder statesman, and, most crucially, check any attempts at political reprisal.

It is far from clear, however, whether Duterte's latest populist posturing will strengthen his ability to shape the outcome of the next election. What remains certain is that it will further undermine business confidence, and overall stability, just when the Philippines is facing its greatest crisis yet.

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