Is Duterte’s Rhetoric Damanging Philippines Investment Climate?

Is the Philippine’s President Rodrigo Duterte swashbuckling manner damaging the economic climate of the country and frightening outside investors? The answer seems to be “yes” and “no” and “maybe.”

If you start with “yes” the figures show investment is down by 41% this year and the peso fell to a seven-year low, and the stock market showed repeated downward movement. So Mr. Duterte’s presidency is hurting the economy, right?

Well, maybe not. CNN Money reports the Philippine economy grew by 6.9% in the first half of the year, and Moody’s rates the nation favorably citing strong consumer spending and stable inflation. More?

In fact, the novice diplomat with the rumpled style has secured loans from China to the tune of $24 billion and $17 billion from Japan private firms and $204 million from the Japanese government in loans and equipment. So maybe he has not damaged the economic climate of his country.

On the other hand, there is “maybe” he has. US investment in the Philippines is estimated to be at $4.7 billion, and then there is  a whopping $9.6 billion in overseas remittances sent annually from the US to the Philippines. Also US–Philippine trade is estimated to be around $18 billion annually. If Mr. Duterte continues with his anti-American rants and consistent anti-American policy will American money find a friendlier place to park itself?

The jury is still out on this question. Time will tell, and certainly no one will ever be bored by watching events unfold in the Philippines in 2016, 2017 and beyond.

Photo: Asain Development Bank via flickr