Investors unruffled by war on drugs

The recent statement of Socio-economic Planning Secretary Ernesto Pernia that the rising death toll in President Duterte’s war on illegal drugs was a “necessary evil for the greater good” was a reflection of the positive sentiments of the business sector on the campaign, in contrast to the indignation of human-rights groups. 

In comments before Palace reporters, which many viewed as “controversial,” Pernia, who is also National Economic and Development Authority (Neda) director-general, said the killings of people involved in the illegal-drugs trade were necessary to totally stamp out the drug menace in the country.

“It is a necessary evil that has to happen in the pursuit of greater good. I’d put it that way,” Pernia said.

He added that the police should not be blamed if suspects have been killed, because the law enforcers only acted in self-defense.

“It’s a self-defense thing, right? Self-defense is legitimate… When law enforcers try to do something and the criminal resists, is armed and is likely to get first, I mean, draw his gun first, faster than the police, then we have to do something,” Pernia said.

Pernia also guaranteed foreign nationals they will be safe in the country, as long as they were not doing anything wrong.

“I think foreigners have to be informed that if they come here and they behave, they didn’t do anything, you know, they don’t do any misdeed, then, they’re safe,” Pernia said.

“In fact, the crime rate has gone down substantially because of this fight against the drug menace. These are the kinds of things that we need to do to counter the perception from afar,” he added.

Business groups appear to “understand” the killings despite some earlier expressions of grave concern over perceptions of large-scale violation of human rights.

United Kingdom (UK) Trade Ambassador to the Philippines Richard Graham said British investors have renewed confidence over the Philippines.

“He (Duterte) made it clear to me that the rule of law is very important and that’s also important in terms of existing contracts being honored and that will give investors a lot of assurance,” Graham said.

Graham added that British businessmen were more interested in Mr. Duterte’s 10-point economic agenda than his policies on criminality and justice.

The country’s biggest trade group also indicated strong approval for the relentless Duterte campaign against the narcotics trade.

The Philippine Chamber of Commerce and Industry (PCCI), in a statement, commended the administration for its efforts during its first 50 days “to fill the need of the citizenry for eradicating addictive drugs throughout the country.”

PCCI President George Barcelon said the improved peace and order situation “adds optimism and confidence for the business community to expand their operations.”

“We are in a very good spot,” said Antonio Moncupa Jr., president and CEO of East-West Banking Corp.

“The pronouncement of government prioritizing infrastructure spending, accelerating it and cutting red tape, solving peace and order, I think all point to very good prospects ahead,” he said.

The economy grew 7 percent in the second quarter from a year earlier, which was the highest level in three years and made the Philippines the fastest-growing among all countries that have reported so far for the second quarter.

Supporters of the President say that even as long-term mayor of the southern city of Davao where he earned his reputation for busting crime, he created the conditions for business to flourish.

Government data show that the Davao region’s economy grew by 6.6 percent on average in 2010-14, compared with 6.3 percent for the whole country. According to one estimate, there were more than 20,000 people in outsourcing jobs in the city in 2013, and this sector was growing at more than 20 percent a year.

The European Chamber of Commerce of the Philippines (ECCP) earlier said the rise in extrajudicial killings was causing “hesitations” among investors over the rule of law and doing business in the country.

But now it seems to be reassessing its view on Mr. Duterte.

“I believe infrastructure is going to grow very fast and it will have a double or triple effect,” former ECCP Chairman Henry Schumacher said. “Money will be available. An iron fist is going to be behind it,” he added.

Graham said that with the improved public order, the total exports of goods and services from UK to the Philippines is seen to grow by 10 percent to 15 percent next year.

Mike Moon, director of Trade and Investment in the British Embassy Manila, added that more major British investments in the Philippines were in the pipeline.

“There will be one large investment, later in the year, in the manufacturing, electronic area and next year there’ll be a couple more in the similar sector so it’s very exciting,” Moon said.

Chris Nelson, chairman of the British Chamber of Commerce of the Philippines, said more UK businesses were asking him about investment prospects in the country.

“Since 2014, we’ve had over 1,000 enquiries and the opportunities we’re seeing today continue to grow,” Nelson said.

The UK is also the largest European investor in the Philippines with more than £1 billion or roughly P61 billion.

Major British companies currently in the country include Unilever, HSBC, Standard Charter, Pru Life and GlaxoSmithKline.

The President’s words have fueled an increase in “extrajudicial” killings. About 1,800 suspected criminals have been slain since July 1, based on figures that Director-General Ronaldo Dela Rosa, Philippine National Police chief, revealed to the Senate last week.

He said 712 were killed in police operations and 1,067 by vigilantes. Few, if any, of the killings have been investigated, and many of the campaign’s victims and detractors have chosen to keep silent.