Duterte Claims Big Philippine Win Amid Doubts on Economic Smarts

What Duterte's Victory Could Mean for the Philippines
  • Tough-talking mayor has focused on pledge to curb crime, graft
  • Vice presidential vote count remains too close to call

Rodrigo Duterte, the tough-talking mayor who claimed a decisive win in the Philippine presidential election, has begun to flesh out his likely inner circle as investors seek clarity on his economic policies.

QuickTake Philippines Path

With 90 percent of polling stations reporting, Duterte had secured 39 percent of ballots in an election held amid sporadic violence and delays. Former government minister Mar Roxas was in second place on 23 percent. Turnout was a record 81.6 percent of voters, well above 74.8 percent in the 2010 election.

Rodrigo Duterte on May 9.
Rodrigo Duterte on May 9.
Photographer: Veejay Villafranca/Bloomberg

The race for vice president remained tight. Congresswoman Leni Robredo led Ferdinand Marcos Jr, whose dictator father was ousted in 1986, with 185,000 votes.

Seeking to break the establishment mold exemplified by outgoing President Benigno Aquino, voters embraced Duterte’s promises to reduce traffic jams on Manila’s congested roads and fight crime and graft. His support didn’t falter through a campaign that saw him make light of a rape incident, deny accusations of undeclared wealth and back the extra-judicial killing of criminals.

Growth Challenges

Duterte now faces the challenge of sustaining investor confidence that helped fuel economic growth that averaged more than 6 percent under Aquino, while managing the expectations of an electorate swayed by populist pledges such as taming crime within six months. Investors have previously expressed concern over his lack of economic experience and at-times whipsaw policy promises.

“For six years all I have to do is work,” Duterte told reporters on Monday in Davao. “Judge me not with the newspaper articles they come up with everyday. Judge me at the end of my term. If I do bad, shoot me.”

The Philippine peso rose 0.4 percent against the dollar as of 11:25 a.m. in Manila, after dropping as much as 0.3 percent from Friday’s close to 47.21 per dollar. The peso declined 1.8 percent in April in Asia’s worst performance.

The country’s benchmark stock index rose 0.5 percent, having fallen earlier by as much as 0.7 percent.

‘Honeymoon Period’

"There will be a honeymoon period moving forward as investors give Duterte the benefit of the doubt," said Smith Chua, chief investment officer for the asset management and trust arm of Bank of the Philippine Islands in Manila. "His popularity is very resounding and investors are interested to see what he will do with this strong popularity and how he will conduct peace with other parties and run the government.”

Duterte hinted at possible cabinet appointees, telling reporters in Davao City on Monday he may tap his childhood friend Carlos Dominguez, who worked as agriculture secretary for the late President Corazon Aquino, to head the finance or transportation departments.
 
Another friend, classmate Jesus Dureza, who was press secretary to former President Gloria Arroyo, may lead a peace panel for a long-running Muslim insurgency in the south, while the job of foreign minister may go to his running mate Alan Cayetano, Duterte said.

‘Very Experienced’

"The two people he mentioned are very experienced," said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. "Their expertise is more of grassroot economics, they know the local front, what is lacking on the ground. But it’s still too early given there are so many positions to be filled. People are waiting for the others, especially the economic team, to get a better feel how policies will be crafted and the timeline.

Born in Southern Leyte province in the central Philippines, Duterte, whose lawyer-father was governor of the old Davao province, worked as a prosecutor in Davao for nine years before becoming vice-mayor in 1986. Two years later he took over as mayor, a post he has since held seven times. Once notorious as the nation’s murder capital, Davao is now one of the country’s safest and more prosperous cities.

Duterte has offered at-times contradictory comments on relations with China.

He’s said the Philippines will take a multilateral approach for now to its territorial disputes in the South China Sea, including working with the U.S., Japan and Australia. Still, earlier this month he said he’d consider direct talks with China, an approach that contrasts with Aquino’s move to take the case to an international tribunal.

Jet Ski

He’s said previously he’d take a jet ski out to islands reclaimed by China in the area to plant the Philippine flag, but also indicated he’d tolerate China’s presence if it built new railways in the Philippines. He has been less firm than Aquino in backing a stronger strategic alliance with the U.S., its major military ally.

Aquino has reached agreement to let the U.S. station troops and operate bases in the Philippines for the first time in more than 20 years.

White House press secretary Josh Earnest said the U.S. would wait until the election results were certified to comment. “When it comes to resolving the claims in the South China Sea, the United States is not a claimant," but urges those who are to resolve their disputes through diplomacy, he said.

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