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FORBES: Duterte continues to rise

Duterte Is Rising
Panos Mourdoukoutas
President Rodrigo Duterte is getting more popular -- his approval and trust rating are rising among the Filipinos.

That’s according to a Pulse Asia survey conducted last month and released on Friday.

Duterte enjoys an approval rating of 88% and a trust rating of 87%, up from 80% and 82% back in January.

That should come as a surprise to outside observers.

What’s behind Duterte’s surge in popularity, then?

A strong economy.

The Philippines economy continues to grow at a fast pace, matching China’s. In the most recent quarter of 2018, the Philippines economy grew at 6.8%, well above its long-term average of 3.76%.

That’s in line with China’s growth rate, and roughly one point below that of India.

The Philippines economy has benefited from a stable macroeconomic environment of low inflation and low debt to GDP ratio, which has helped sustain a healthy domestic demand growth; and from a revival of the Asian Pacific region, which has boosted exports, accounting for close to a third of GDP.

Still, Duterte has something to do with the economy’s strong performance. He has maintained a stable macroeconomic environment of low inflation and low debt to GDP ratio, which has helped sustain a healthy domestic demand growth.

But that may change soon, as inflation has made a big comeback recently. It is currently running at 5.2%, well above those of China’s and India’s.

Higher growth also comes with a widening of the country’s trade deficit, which reached $1.55 billion in April 2018. This means that the country is living beyond its means, a dangerous situation at a time when capital flows from emerging markets back to developed countries.

Rising inflation and growing trade account deficits prompted the Philippines central bank to hike its overnight reverse repurchase (RRP) rate recently. It was the first rate hike since September 2014.

Apparently, Philippines central bankers do not want to let inflation get out of control -- inflation is one of the top killers of emerging market growth. It killed the Philippines growth back in the 1980s, when it was running at 62.80%.

Meanwhile, higher interest rates will cool the Filipino economy. But will they cool off President Duterte’s popularity among the Filipino people?

It remains to be seen.

FORBES: Duterte continues to rise FORBES: Duterte continues to rise Reviewed by AsianPolicy.Press on 6:58:00 AM Rating: 5

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