Philippines’ crime war a risk for economy, S&P warns
S&P maintained its stable outlook for the Philippines, but highlighted a range of ‘weaknesses’ under the new Duterte administration
President Rodrigo Duterte’s deadly war on crime is threatening the Philippines’ economy and endangering its democratic institutions, international credit rating agency Standard and Poor’s warned on Wednesday.
S&P maintained its stable outlook for the Philippines, but highlighted a range of “weaknesses” under the new Duterte administration that also included his foreign policy and national security statements.
“The president has a strong focus on improving ‘law and order’, which has allegedly resulted in numerous extrajudicial killings since he came to power,” S&P said.
“This could undermine respect for the rule of law and human rights through the direct challenges it presents to the legitimacy of the judiciary, media and other democratic institutions.
“When combined with the president’s policy pronouncements elsewhere on foreign policy and national security, we believe that the stability and predictability of policymaking has diminished somewhat.”
Duterte won elections in a landslide in May after vowing an unprecedented crackdown on illegal drugs in which 100,000 people would die.
About 3,000 people have been killed since he took office on June 30. About a third of the victims were shot dead by police and the rest murdered by unidentified attackers, according to official statistics.
Duterte has vowed to ignore a wave of international condemnation over the killing spree, with US President Barack Obama, the European Parliament and the United Nations among the many critics.
He has typically used abusive language in responding to the criticism, branding Obama a “son of a whore” and UN chief Ban Ki-moon a “fool”, and lifting his middle finger while saying “f*** you” to the European Parliament.
Duterte has also sought to loosen the Philippines’ decades-old alliance with the United States, such as by saying he wanted to kick out US troops who are in the country for anti-terrorism efforts, while courting Chinese investment.
Nevertheless, the charismatic 71-year-old remains wildly popular as many Filipinos embrace his promise of a quick solution to the deep-rooted crime problem.
The Philippines enjoyed strong economic growth during the previous administration of Benigno Aquino, who was required by the constitution to stand down after a single term of six years.
S&P, as well as competitors Moody’s and Fitch rating agencies, in 2013 all raised the Philippines to investment-grade level for the first time, indicating a lower risk to investors.
In maintaining the stable outlook, S&P said on Wednesday it believed the Duterte administration would “broadly continue” the Aquino administration’s macroeconomic policies.
But it highlighted “rising uncertainties surrounding the stability, predictability and accountability” under Duterte’s leadership.