Corporate Securities Info

Flip-flops on economic issues

/ 04:01 AM November 26, 2019

Last year, upon the recommendation of his economic managers, President Duterte certified as urgent the enactment of the rice tariffication bill.

Believing that liberalization of rice importation would make the basic commodity more affordable and, at the same time, help lower the inflation rate, Congress immediately obliged.


True enough, with the facilitated entry of imported rice, prices stabilized and the inflation rate went down to 1.75 percent. In light of these developments, lawmakers and economic managers patted themselves on the back for what they believed was a job well done.

The jubilation proved to be short-lived. After several months, farmers complained of low farmgate prices for their harvests and called for the amendment or repeal of the law.


In response to the complaints, the President said he would ban rice importation during harvest seasons. But before the order could be issued and after conferring with his economic managers, he backtracked and said the importations would continue.

To assuage the farmers, he ordered the ramping up of palay purchases and distribution of cash subsidies to small farmers.

This means imported rice can continue to come into the country and the farmers have to learn to adjust to the situation with the promised financial aid from the government.

That’s for now. Whether or not Mr. Duterte may change his mind on this issue in the future cannot be discounted. He is known to make spur of the moment decisions without prior consultations with his advisers.

The President’s about-face on rice importation does not come as a surprise. This is not the first time he reversed himself on an economic issue he had earlier publicly taken a stand on.

In his first Cabinet meeting, he expressed his displeasure for gambling and ordered a halt to online gambling. After he called Roberto Ongpin, then chair of PhilWeb Corp., a major online gaming operator, an oligarch, PhilWeb’s contract with the government was not renewed.

The President’s order unnerved thousands of Filipinos who depended on the gaming industry for their livelihood and the gaming operators who have invested millions of pesos in that business.


Three weeks later, Mr. Duterte did a 180-degree turn. He said he would allow online gambling again on condition, among others, that its operators pay the proper taxes.

With that blessing, online gaming operations that cater to Chinese gamblers boomed and thousands of Chinese nationals descended into the country to man them.

The mining industry also got some nasty words from the President in the early days of his administration. Reacting to reports of environmental degradation caused by mining companies, he said the Philippines could live without them.

That statement adversely affected listed companies and investors.

Three days later, Mr. Duterte softened his rhetoric. He said mining operations would still be allowed under certain limits and that the gains from their operation should be reconfigured to benefit the affected mining areas.

Climate change was not spared the President’s change of mind. Early this year, the President, in the belief the Paris agreement on climate change—backed by 184 countries—was unfair and economically disadvantageous to the Philippines because it favored industrialized countries at the expense of less industrialized countries like the Philippines, said he would not honor it.

That statement drew strong criticisms from local and international environmentalist groups. They said the Philippines stood to benefit from the agreement considering it was one of the countries most susceptible to climate change.

A few days later, Mr. Duterte had a change of heart. Without making reference to the agreement, he said addressing climate change should be a top priority of his administration but it should not stymie the country’s industrialization.

Amid these flip-flops, we can take consolation from the saying, “only fools do not change their mind.”

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