Duterte’s Luster Dulls as Rice Prices Soar in Philippines
October 15, 2018 at 18:00
Duterte’s Luster Dulls as Rice Prices Soar in Philippines
A National Food Authority rice warehouse in Quezon City, Philippines.CreditCreditHannah Reyes Morales for The New York Times
By Aurora Almendral | Oct. 10, 2018
MANILA — Through controversy after controversy, President Rodrigo Duterte of the Philippines has always been able to count on his appeal among the nation’s poor. But soaring prices for staples like rice are starting to alienate that vital base of support.
During his presidency, Mr. Duterte has clashed with cherished institutions like the Roman Catholic Church, made jokes about rape and led a brutal war on drugs that has left thousands dead.
But he now faces deepening discontent in an area that particularly affects the urban poor: the price of food.
The country’s inflation rate has hit a nine-year record — 6.7 percent — after climbing for nine consecutive months, the Philippine Statistics Authority said last week. That situation is bad enough that on Tuesday Mr. Duterte ordered restrictions dropped on the importing of rice, ending a decades-old protectionist policy administered by the country’s National Food Authority.
Over the past year, vegetable prices have gone up nearly 20 percent, fish prices 12 percent and meat prices 7 percent. And while global rice prices have been stable, prices in the Philippines have been as high as double the import price.
“Five hundred pesos feels like one peso now,” said Lilian Gomez, 52, for whom it doesn’t take long these days to hit her budget limit at the Agora market in Manila. “All the prices have gone up since Duterte became president.”
She said she had not bought fresh meat or fish in two months, and she reminisced about cooking dishes whose ingredients she could no longer afford: banana blossoms stewed in coconut milk, eggplant with shrimp paste, spicy taro leaves.
Filipinos lining up for National Food Authority rice, which is rationed out at a cheaper price than commercial rice, at the Agora wet market in Manila.CreditHannah Reyes Morales for The New York Times
To stretch the rice she buys for her family of three, she plumps it into porridge.
Characteristically, Mr. Duterte responded to the higher prices first with threats.
Publicly, he began suggesting that there was a conspiracy among rice dealers. He labeled them as cartels, hoarders and smugglers, telling them to “stop messing with the people.”
“Consider yourselves warned,” he said, “or the full power of the state will be upon you.”
Emmanuel Pinol, the agriculture secretary, backed up Mr. Duterte’s threats with high-profile raids of rice warehouses, and announced a bounty of 250,000 pesos, or about $4,600, for information leading to the arrest of rice hoarders.
The blame began widening, with Mr. Duterte suggesting that President Trump’s trade war with China was part of the problem — as were drug addicts, who he joked had replaced their meth habits by eating huge quantities of rice, driving up prices.
The arrival last month of Typhoon Mangkhut did not help: It destroyed about 250,000 tons of rice, according to the agriculture department.
The National Food Authority initiated several emergency imports of rice, each time assuring the public that the intervention would drop prices, but it proved too small and too late.
Experts say the country’s food agency has become paralyzed by infighting among Duterte appointees. And his administration is being widely accused of mismanagement that has steadily worsened inflation and threatened to slow the economic growth that Mr. Duterte has prioritized.
Ramon Clarete, a professor of economics at the University of the Philippines Diliman in Quezon City who specializes in agriculture and food policy, said the problem with rice, in particular, was a crisis of the government’s own creation.
Rice prices in the Philippines were running as much as double the average global price in recent months.CreditHannah Reyes Morales for The New York Times
“It was the incompetent mistake of the N.F.A. not stocking itself adequately that gave fuel to inflation,” Mr. Clarete said of the National Food Authority, which is responsible for maintaining rice stocks and influencing prices within the Philippines’ protectionist import regime. “It could be they are not appreciative enough of how the market works. Or cruel.”
Other factors are adding to Mr. Duterte’s problems. Global oil prices are rising, making fuel more expensive. The value of the country’s currency, the peso, has weakened because of broader investor concerns about global growth, driving up the price of imports.
But driven to keep the country’s growth revved up for years, leaders in the Philippines have contributed as well. In addition to tightly controlling rice supplies, the country has long kept interest rates low. Mr. Duterte has slashed taxes and increased infrastructure spending. All that adds to economic growth but tends to drive prices up, too.
This has created immediate frustrations among the poor and the middle-class Filipinos whom Mr. Duterte has heavily courted during his time in office.
The administration has lowered import taxes, and pledged to increase supplies of affordable fish and fuel — moves that the political analyst Richard Heydarian described “as a reflection of a sense of desperation on the part of the government.”
With Tuesday’s move to drop restrictions on rice imports, Mr. Duterte has taken the biggest step yet, most likely in recognition that his political base is wavering.
The urban poor are the largest voting bloc in the Philippines, and Mr. Duterte courted their votes with promises to transform their lives and bring in a wave of infrastructure improvements that would modernize the country.
A new tax law that was passed to help pay for Mr. Duterte’s infrastructure plan lowered income taxes for the middle and upper classes. But it increased excise and value-added taxes, pushing prices up across the board. Even as infrastructure projects stalled, continued investment in them contributed to increasing inflation, along with rising global prices for oil and a weakening currency.
Lilian Gomez, 52, said that she had not bought fresh meat or fish in almost two months. “Five hundred pesos feels like one peso now,” she said. “All the prices have gone up since Duterte became president.”CreditHannah Reyes Morales for The New York Times
While Mr. Duterte’s popularity has begun to drop among the poor and the middle class, according to recent polls, it has certainly not disappeared, with satisfaction ratings still topping 60 percent for his administration.
But pollsters who monitor issues of national concern say economic worries now dominate lists of national concerns, with inflation at the top, followed by stagnant wages and the need for job creation.
The Philippines has long been among the fastest-growing economies in Southeast Asia, and that has continued. But the rising prices have begun to have an effect. The World Bank downgraded Philippine growth prospects from 6.7 to 6.5 percent, as did Moody’s, citing the negative effect of inflation.
Maria Fe Villamejor-Mendoza, a professor of public policy at the University of the Philippines Diliman, said discontent could manifest in the midterm elections next May, with fewer of Mr. Duterte’s allies winning seats.
But in the short term, she said, “the administration is panicking and imagining scenarios to divert the attention of the people away from inflation,” citing allegations of a plot by university students, public statements about Mr. Duterte’s health and the resignation of a controversial government official after a series of scandals.
“They underestimated the effect of inflation,” Ms. Villamejor-Mendoza said, and the administration was doing “damage control, in order that people will not remember the hardship of the value of the Philippine peso.”
Mr. Heydarian said that events like the spike in prices eroded Mr. Duterte’s popularity and over time could diminish his power. As Mr. Duterte’s historically high approval ratings fall to more normal levels, he may be forced to provide concessions to the old elite and other centers of power, and the opposition will be more emboldened to criticize him.
“That kind of Duterte is increasingly becoming a reality,” Mr. Heydarian said. “That’s a huge climb down from the kind of aura that he projected in his first year of office.”
Fernando Gonzales, 51, with his family’s ration of National Food Authority rice.CreditHannah Reyes Morales for The New York Times
Mr. Heydarian said that while Mr. Duterte effectively distinguished himself from the political elite establishment with his vulgar and defiant style, economically he was more “conventional, rather than pro-poor and progressive.”
The idea resonates among people eager to see action from Mr. Duterte.
Angelito Batac, a 53-year-old carpenter in Navotas, in northern Manila, said: “This started when Duterte became president. We can’t breathe. He’s not doing anything but curse.”
Mr. Batac’s wife, Evangeline, agreed. “He said all the poor will no longer be poor,” she said. “But we’re even poorer.”
Birgit Hansl, lead economist in the Philippines for the World Bank, said some of Mr. Duterte’s policies could still bear fruit. A measure adding two years to mandatory education will better prepare future generations for the work force, she said. And even some of Mr. Duterte’s infrastructure projects coming to fruition would be of wide benefit, she added. However, it would still take years for the effects of those reforms to be felt.
Ms. Villamejor-Mendoza, the public policy professor, said that while there may be disappointment in Mr. Duterte’s unfulfilled promises, it is not turning into rage as much as disillusionment. “It’s a learned hopelessness,” she said.
Uvigilda Condez, 47, who lives in Navotas, said she had high hopes for Mr. Duterte when he was elected. She believed him when he said he would fight for Filipinos.
“It could have been great,” she said. “Maybe we have some hope that life will become easier, but nothing has happened yet. Life seems to have gotten harder.”
“I don’t know what he’s going to be able to change,” she added. “He’s just like everyone else.”
Source: https://www.nytimes.com/2018/10/10/world/asia/duterte-philippines-inflation-rice.html
