Two years have passed since President Rodrigo Duterte took office. In that span of time, how has his administration affected the Philippine economy and markets?
Contrary to what the president said in a summit in Davao last June 22 that “the economy is in the doldrums,” data show that the Philippine gross domestic product growth has been sustained in the previous quarters. The unemployment rate has also been going down and is at a noticeably lower rate compared to the period before Duterte took office.
The government’s tax collections have risen by 41 percent since the president's inauguration. And as expected from the administration’s aggressive push for its Build, Build, Build program, infrastructure and other capital outlays spending have increased by 26 percent since June 2016.
To be sure, it is not enough to look at just one or two indicators to fully assess how the Philippine economy is faring under Duterte. Other data suggest that along with the expansion of the economy are the rising prices and fall of the markets.
Largely driven by the tax reform law and world oil prices, the Philippine headline inflation is now at a five-year high.
The Philippine peso is falling at an alarming rate, closing at a 12-year low on June 28, Thursday. As well, the Philippine Stock Exchange Composite Index (PSEi) has recently entered the bear market after suffering a 20-percent decline from its recent peak in January.
Lastly, Treasury Bill rates, which are used in setting lending rates that are considered one of the major costs of doing business, have been rising, too. The 91-Day Treasury Bill rates have more than doubled in Duterte’s first two years.
The general consensus among economic analysts seems to be that despite the short-term bleakness in the stock and foreign exchange markets, long-term prospects for the economy seem very good, especially with rising infrastructure spending and tax revenues. If Duterte could only go easy on what London-based research firm Capital Economics analyst called his “erratic and crass leadership style,” the prospects might even be better.
This story originally appeared on Entrepreneur.com.ph.
* Minor edits have been made by the Esquiremag.ph editors.