Duterte’s Popularity a Boon to Economy 2
PRESIDENT Rodrigo R. Duterte’s higher approval rating in December 2018 is a clear affirmation of his mandate to govern the country and implement policies to improve a lot of the Filipinos and the overall economy.
I think the President is in an ideal situation. With key indicators, especially inflation and the exchange rate, starting to stabilize, Mr. Duterte can better focus on the agenda at hand, create more jobs through “Build, Build, Build,” and significantly reduce the country’s poverty incidence.
President Duterte emerged as the most trusted government official in the latest survey conducted by Pulse Asia in December 2018. The President’s trust rating was at 76 percent, a 4-percentage-point increase from his previous 72 percent in September 2018. His approval rating, according to the survey, stood at 81 percent, up by 6 percentage points from his previous mark of 75 percent in September 2018.
Nearly halfway through his six-year term, President Duterte is still solidly popular among Filipinos. I think the confidence of the people in President Duterte is reaching near an all-time high. He received a 96 percent approval rating and a 91 percent trust rating in Mindanao; an 86 percent approval rating and 82 percent trust rating in the Visayas; and a 74 percent approval rating and 69 percent trust rating in Luzon.
The survey shows that the Filipino people, as noted by the President’s spokesman Salvador Panelo, fully believe in the way the President is running the bureaucracy and the nation.
The Pulse Asia survey is, therefore, another repudiation of the critics and detractors [of the President], Panelo says. “Their loud hysterical harping and assaulting the administration with their accusations and condemnation are in sharp contrast to the clamor of the Filipinos for genuine and transparent change,” he adds.
I believe President Duterte achieved a higher trust and approval rating because of, among other things, the way he and his economic managers handled the temporary imbalances in the local economy. World oil prices in the fourth quarter of the year were surging, while the inflation rate was at a nine-year high of 6.7 percent in October, mainly because of the rice supply shortfall. The exchange rate, meanwhile, hovered below 54 against the US dollar in October 2018.
But things quickly changed for the better toward the close of 2018. The inflation rate eased to 6 percent and 5.1 percent in November and December, respectively, after President Duterte ordered the importation of more rice to address the supply shortage. The peso has settled to 52 against the greenback since then, and even the stock market is recovering with the Philippine Stock Exchange Index closing above 8,000 points.
It is safe to say that the Philippine economy survived the brewing worldwide economic crisis in 2018 that was precipitated by the tit-for-tat tariff impositions of the United States and China, surging oil prices and the political and economic turmoils in Turkey and Argentina.
With a resilient economy, I believe the Philippines will perform much better this year. For one, the inflation rate will likely go down further this year after the signing into law of the Rice Tariffication bill. A lower inflation rate bolsters the spending power of the consumers. Increased household consumption, in turn, spurs demand and production.
President Duterte’s increasing trust and approval rating, meanwhile, reflects a stable political environment that investors prefer. I am confident more investments will come in this year given the impressive economic scorecard of the Duterte administration and the country’s growth story.
Moody’s Analytics, a division of Moody’s Corp., made the same upbeat forecast. It saw the Philippine economy rebounding with a growth of 6.8 percent in the fourth quarter from a sluggish 6.1 percent expansion in the third quarter because of strong private consumption.
Moody’s said in a report the fourth-quarter figure would bring the 2018 gross domestic product growth to 6.5 percent, representing the lower end of the government’s target range of 6.5 percent to 6.9 percent for the year.
“GDP growth in the Philippines likely hit 6.8 percent in the fourth quarter, after slowing to 6.1 percent in the third. Improvement is expected in private consumption after a slump in the third quarter on higher food prices squashing discretionary spending,” Moody’s said.
I am deeply saddened by the passing of Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. Since his appointment in May 2017, Espenilla has provided expertise, calmness, and stability to our monetary and economic policy. Our condolences to his family. May his soul rest in peace.