Philippines’ Election of nationalist Rodrigo Duterte Bodes Well for the Country Published Wed, May 18, 2016 | Martin Hutchinson, Global Markets Analyst
Philippines’ Election of nationalist Rodrigo Duterte Bodes Well for the Country On May 9, Philippine voters shook up their political system by electing a Trump-like nationalist from outside of their traditional oligarchy.
Luckily, the bombastic Rodrigo Duterte has a good track record as the Mayor of Davao and, more importantly for us as investors, he’s not a socialist. Like Thailand’s Thaksin Shinawatra (elected in 2001), his goal is to distribute the Philippines’ new wealth beyond Manila to the whole archipelago.
Hopefully, he’ll meet a better fate than Shinawatra, who was forced out by a coup in 2006. His election certainly bodes well for the country’s economy, as well as its companies.
Spreading the Wealth Since dictator Ferdinand Marcos was ousted in 1986, Philippines’ politics have been dominated by a number of elite families.
For example, outgoing President Benigno Aquino was the son of the 1986-92 President Corazon Aquino, who won the election that succeeded Marcos’ ouster.
Economic growth was sluggish for decades due to corruption, but picked up under Benigno Aquino, with the Philippines rising from 138 to 95 out of 167 countries on the Transparency International Corruption Perceptions Index.
The business process outsourcing industry has been growing especially fast, providing well-paid opportunities for Filipinos as well as opportunities for them to further develop their skills.
That economic development has been heavily concentrated around Manila, which explains Duterte’s goal of spreading the wealth. For example, the southern island of Mindanao has seen little growth and has living standards about halfof those of the capital region. It also has a substantial problem with Islamist guerilla insurgency.
This situation is similar to Thailand from 15 years ago. Growth was rapid in the 1980s and early 1990s, but remained largely concentrated around Bangkok, with a massive real estate boom that culminated in the Asian crisis of 1997 and a collapse in value of the stock market, real estate prices, and the Thai baht.
Shinawatra, a telecom tycoon, was elected in 2001 with massive support from rural Thais on his promise to spread the benefits of growth more equally. He achieved this while maintaining economic growth, but earned the enmity of the Bangkok elite, including King Bhumibol, and was ousted by a coup in 2006.
His sister later returned with a short-lived government, but another coup ousted her. A military government now rules the country, and there’s no sign of any kind of return to democracy.
In the Philippines election, Duterte won with about 38% of the vote, with the two candidates supported by Aquino running second and third, more than 10% behind him.
There’s no election run-off in the Philippines, so Duterte will be inaugurated on June 30.
The Vice Presidency, also an important position, is elected separately. Here, Ferdinand “Bongbong” Marcos, the son of the former dictator, narrowly lost to Leni Robredo, an ally of Benigno Aquino.
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Poster Comment:
I had some woman from an online dating site tell me she was into shoes. "Call me Imelda", she said. Imelda Marcos was the wife of former President of Philippines, Ferdinand Marcos. :-/