Philippines' Duterte distracted by drugs

Since being elected president of the Philippines last May, Rodrigo Duterte’s war on drugs has overshadowed his tenure.

When Rodrigo Duterte was elected president of the Philippines last May, he promised a war on drugs. His crackdown "has seen more than 7,000 drug suspects killed by police, vigilantes and rivals (the three categories overlap)", says The Economist. It has overshadowed his tenure so far, which is a pity: there are other policies he heralded that could improve the economic outlook.

A tax-reform bill before the legislature proposes lowering the top personal income-tax rate from 32% to 25% and raising the tax-free income threshold while increasing indirect taxation. A second would trim corporation tax from 30% to 25%.

These measures should lower the incentive to dodge taxes, raise cash, and entice foreign investment. The money is supposed to be put towards infrastructure, on which the Philippines spent a mere 2% of GDP in the 1980s and 1990s. Duterte plans to raise this figure to 5%-7%.

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However, the worry now is that he has become so distracted by his drug war he now plans to reinstate the death penalty that he won't get round to crucial reforms. Investors will be keeping a wary eye on him this year.

Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.