Two years into Rodrigo Duterte's presidency, the Philippines' once-celebrated economy is beginning to display vulnerabilities. Inflation has breached the government's target, the peso is in free fall, and the country is suffering its largest current-account deficit in 18 years.
Amid deepening concerns over the rule of law as well as regulatory predictability, foreign investors remain unenthused. Western investors have described the Philippines as a "tough sell," thanks to Duterte's unpredictable policies, including the sudden shutdown of the resort island of Boracay this year, and the persistence of extrajudicial killings and corruption.
The economic jitters have begun to affect public opinion as a growing number of Filipinos openly question the government's macroeconomic management. Duterte is far from invincible and his administration will need to reassure foreign investors, restore confidence in the country's institutions, and encourage economic managers to operate as independently and professionally as possible.
Otherwise, Duterte risks his presidency, amid rising public discontent, while the country's economic growth could peter out and, eventually, lead to public investment crisis.
