Philippine President Rodrigo Duterte to deliver key speech, as conflicts cloud his year ahead

Philippine President Rodrigo Duterte is set to deliver his second State of the Nation Address on Monday (July 24).
Philippine President Rodrigo Duterte is set to deliver his second State of the Nation Address on Monday (July 24).PHOTO: REUTERS

MANILA - President Rodrigo Duterte will deliver his second State of the Nation Address Monday (July 24), clouded by a protracted battle between government troops and Muslim militants for the southern city of Marawi, a drug war that is just heating up, and martial law that may reach beyond the shores of the insurgency-wracked island of Mindanao.

Yet, the nation remains on an even keel. Growth is forecast at between 6 and 7 per cent this year and the next. That, however, has little to do with anything Mr Duterte's government has done so far.

The Philippine peso has fallen to an 11-year low, at 50.88 per US dollar, a reaction to interest rate movements in the United States. While a falling currency may unsettle nations that rely on manufacturing, it somehow works for the Philippines.

It buttresses the value of remittances by millions of dollar-earning Filipinos abroad.

And it lifts the income of outsourcing companies that employ nearly 2 million mostly young professionals. That is, in turn, stimulating consumer spending, the main driver of growth.

The middle class is still growing, and they are spending even more.

But things could have been better, if not for the wars that are likely to bedevil Mr Duterte till at least his second year as president and delay his ambitious, 8 trillion-peso (S$214.5 billion) "Build, Build, Build" infrastructure programme.

Because of the government's inability to swiftly contain it, the battle for Marawi city in Mindanao, now on its third month, is seen fueling Muslim militancy, with the ultra-radical Islamic State in Iraq and Syria pushing even harder to carve out a territory in Mindanao.

Even as government troops continue to battle militant groups that seized parts of Marawi on May 23, Mr Duterte last week opened another front, declaring all-out war against the communists. He has called off peace talks with the National Democratic Front, after attacks by the New People's Army that left five of his security men wounded, and two marines and six policemen dead.

Addressing a communist leader who called him a "bully", he replied, "That is my job: to bully you and to kill you because there is a war going on between us and you".

The police, meanwhile, continues to pursue Mr Duterte's war on the narcotics trade, with small-time drug dealers popping up dead in some street or alley each night.

All these wars are sapping momentum from years of fast-paced growth under Mr Duterte's predecessor Benigno Aquino.

Investment pledges for Mindanao has plunged 63 per cent to 6.87 billion pesos from January to June. Ratings firms and multilateral institutions, meanwhile, have either kept or lowered by a few notches their forecasts. They are not expecting anything spectacular from the Philippines this year.

These do not bode well for Mr Duterte's cornerstone infrastructure programme meant to give millions jobs and take them out of poverty.

As things stand, most of the big-ticket items are still on paper, and it is unlikely the Philippines will see this year a single yuan from the over US$30 billion worth of investments and credit lines China has promised Mr Duterte.

There are, meanwhile, efforts in the US and Europe to impose human rights-related trade sanctions on the Philippines for the thousands being killed by police and vigilantes in Mr Duterte's anti-drug war.

To deal with both terrorists and communists, Mr Duterte has declared martial law across Mindanao. Far from offering assurance, however, it has led to concerns that military rule may fuel resentment among Muslims that militants may exploit to shore up their depleted ranks. A Marawi civic leader told lawmakers the military is already committing human rights abuses. A 20-year-old with special needs was interrogated by government troops by pouring hot water on his hands, she said.

The communists, meanwhile, fearing a crackdown, are stepping up attacks on the military.

Mr Duterte's communications chief Martin Andanar said the president's State of the Nation Address will talk about a "comfortable life for all".

"The theme is a comfortable life for all. It will focus around prosperity for all, law and order, and peace," he said.

But it is a sweeping theme that the facts on the ground do not support. Offering a sobering reminder, Ms Liza Maza, lead convenor of the National Anti-Poverty Commission, said "more than 20 million are still in poverty".

"There are a lot of things that still needs to be pursued. We're not even halfway there. We're just actually starting," she said.