Done with Aquinomics? Here comes 'Duterte magic'
June 15, 2016 | 4:22pm
MANILA, Philippines — Step aside Aquinomics, here comes "Duterte magic."
Ahead of President-elect Rodrigo Duterte's takeover on June 30, his incoming economic managers will consult business leaders next week to secure specific policy recommendations.
The two-day conference in Davao City from June 20 to 21 will center on Duterte's now 10-point socioeconomic agenda, which his camp said was welcomed by investors as shown by stock market performance since last month's elections.
"Higher net foreign buying in the local bourse over May-June period is testament to resurgent investor confidence in the Philippines," said Paola Alvarez, incoming spokesperson of the Department of Finance.
"It cannot be denied that the election of a new President with a steadfast character and the appointment of a learned secretary of finance are contributing factors," she said in a statement on Wednesday.
Incoming Finance chief Carlos Dominguez III will lay the groundwork by presenting the 10-point agenda which, he claimed, will make economic growth inclusive or felt by the ordinary Filipino.
This covers continuing current macroeconomic policies, increasing business competitiveness, lowering income taxes, increasing infrastructure spending to 5 percent of economic output, promoting rural, human capital development and science and technology, ensuring land security, improving social programs like conditional cash transfers and better implementation of the reproductive health law.
Citing data from the Philippine Stock Exchange (PSE), Alvarez said Duterte's election brought net foreign buying from May to the second week of June to rise 22 percent to P20 billion.
"His economic policy is more micro than macro," said Emmanuel Lopez, chair of the economic department at the University of Santo Tomas.
"Generally, what he wants to do is to trickle down growth to the grassroots, something not done during the present administration," he said in a phone interview.
'Complementary' policies
Dubbed as Aquinomics, a play of the words "Aquino" and "economics", Aquino won on a platform to eradicate corruption through good governance, pushing six-year average economic growth to its fastest since the late 1970s.
But this was criticized of being largely unfelt as a little more than a quarter of Filipinos remain poor, according to latest census data. Under Aquino, the PSE index achieved more than 80 record highs.
"Aquino's and Duterte's policies are complementary, though. We have to accept the fact that Aquino did many things like infrastructure where Duterte can benefit," Lopez said.
For Duterte, he said new focus on eradicating crime, which is a "political move," could encourage more businesses to invest.
But Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, was not impressed, saying the recent local stock market rally is not isolated.
"Pronouncements by (Ms.) Alvarez are obviously fallacious as foreign buying has been in the net positive for the region, save for Japan," he said in an e-mail.
"Policies are there, but implementation will be the true test if the magic alluded to by incoming Duterte team will quickly be figured out like a cheap card trick or lead to true transformation for our economy," Mapa said.
Alvarez, for her part, said the incoming administration is confident investors would rally behind it.
"We hope this investor trust and confidence in the stability of our market continues...," she said.
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