As mayor, Philippines' 'Trump of the East' wooed business

MANILA (Reuters) - It looks almost inevitable now that the Philippines’ next president will be a man who has said he would kill his own children if they took drugs and has vowed to challenge China by jet-skiing to a disputed island to plant his country’s flag.

Presidential candidate Rodrigo "Digong" Duterte wipes perspiration on his face beside an aide during election campaigning in Malabon, Metro Manila in the Philippines April 27, 2016. REUTERS/Erik De Castro

Rodrigo Duterte has a commanding lead in opinion polls ahead of the May 9 election, much to the dismay of business chiefs, investors and diplomats who see him as a clown with no clear economic policies and a possible liability for the country.

Brash and openly scathing of the political establishment on the campaign trail, he has been likened to Donald Trump.

And yet, Duterte’s supporters point to his past to argue that as president, he would not be the disaster that critics fear.

As mayor of Davao city in the south of the country, they say, the 71-year-old former prosecutor waged war on drugs, crushed crime rates, lifted investment levels, improved health and education, and delegated policy issues to technocrats.

“He communicates in a very rough way, but he has a policy group, he consults, he listens, there’s mitigation after his speeches,” said Jesus Dureza, a former congressman who went to school with Duterte and is now involved in his campaign.

Eurasia Group, a global risk research firm, said in a report this week that the Philippines is likely to continue on the pro-growth and reform-oriented path set by outgoing President Benigno Aquino, regardless of who wins the election.

It said that while Grace Poe, a senator who was at one stage the frontrunner in opinion polls, appears more engaged and knowledgeable on economic policy, Duterte defers to capable advisers and is likely to pursue infrastructure development, administrative streamlining and openness to foreign investment.

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Last week, members of the country’s leading business club were stunned when Duterte addressed them in his usual style, threatening to kill criminals and making risque comments about Viagra use and his sex life, but shedding little light on the economic policies he would pursue if he became president.

“Sometimes, more often than not, we hope that the candidates will do as they promised,” Ramon del Rosario, chairman of the Makati Business Club, said later.

“I think this is one time when I am hoping that this particular candidate does not do what he is promising to do.”

Mayor of Davao seven times since 1988, Duterte was nicknamed ‘the Punisher’ for his crime-busting crusade there.

His advisers say that by making the city of 1.5 million safer, he created the conditions for investment and growth.

The narrative is that what he did for Davao he can do for the country of 100 million people.

Government data show that the Davao region’s economy grew by 6.6 percent on average in 2010-14 compared with 6.3 percent for the whole country. According to a 2011 World Bank survey, it took 27 days to start a business there compared with 38 days in Manila, the capital, and the average setting-up cost was far lower.

Davao is one of the Philippines’ “Next Wave” cities, the Lee Kuan Yew School of Public Policy said in a report, which cited an estimate that in 2013 there were more than 20,000 people in business process outsourcing jobs, such as call centers, and this sector was growing at more than 20 percent a year.

“I used to run a factory in Davao back in the late 1970s,” Australian-born business consultant Peter Wallace wrote in a recent opinion column. “It’s a different city today, one that works — in safety.”


However, a 2015 Crime Situation Report released by the national police said that from 2010 to 2015, based on total incidents, Davao was top among 15 cities for murder, number two for rape and third for robbery.

The poverty rate in the Davao region stood at 25.0 percent of the population in 2012, significantly higher than the national level of 19.7 percent, according to the national statistics authority.

Duterte’s economic advisor, Ernesto Pernia, told Reuters that law and order would be the starting point for his policy.

“That is foundational for ... investments to come and for economic growth to be more brisk,” said Pernia, a former university lecturer and economist at the Asian Development Bank.

Much will depend on how much Duterte delegates and to whom.

“If he selects technocrats with experience, good track records and strong networks, it may not be as bad as the campaign rhetoric suggested,” said Ernie Bower, a senior adviser for the Southeast Asia Program at the Washington D.C.-based Center for Strategic and International Studies, who drew a parallel with Trump.

“The fear and anxiety come from the fact that we just don’t know - and neither Duterte nor Trump seem to know - who they would include in their cabinet teams if elected,” he said.

Additional reporting by Martin Petty and Neil Jerome Morales in MANILA, and by David Brunnstrom in WASHINGTON; Editing by Raju Gopalakrishnan