• Reputational risk


    Ben D. Kritz

    AT some point in the imminent future, the Philippines’ poor image under President Rodrigo Duterte is going to become a liability for companies trying to do business here, and no amount of complaining on the part of the government or its overzealous supporters that the rest of the world is being unfair is going to resolve it.

    Here are a few inconvenient facts for those who believe the globe should just accept this country’s narrative that those who express skepticism or criticism are naïve, misinformed, or intentionally trying to undermine its leadership:

    Since Duterte took office at the end of last June, he has called for a violent campaign against the drug trade.
    The former mayor was widely known here in the Philippines for allowing—if not actually encouraging or ordering—vigilante killings of criminals in his own city. He boasted (as recently as December of last year) of having personally killed criminals, and claimed more than once to have cruised around Davao on a motorcycle looking for criminals to kill.

    As a result of his anti-drug campaign, several thousand drug suspects, mostly petty dealers or addicts, have been killed, as have been some innocent bystanders caught in the wrong place at the wrong time. In addition, several hundreds of thousands of drug users have voluntarily surrendered out of fear for their lives. Not all of the deaths have been the result of legitimate police operations, as the police have tacitly admitted, but as yet, not one case of illegal killing under cover of the “drug war” has been resolved.

    The drug war has also exposed some ugly lawlessness within the national police. Police executed a mayor (and father of a major drug dealer) under detention for weapons charges in his jail cell, along with an unrelated detainee who witnessed it, possibly to keep the disgraced official from fingering police officials in the drug business. The investigation into the matter has largely fizzled, because of Duterte’s vehement declaration that he would simply pardon any of the police involved if they were ever charged for it. Likewise, the investigation into the kidnap and murder—within the confines of the national police headquarters—of an innocent Korean businessman in what appears to have been a botched extortion plot by a group of police officers seems to have gone dormant as well.

    Most recently, a surprise visit by members of the Commission on Human Rights to a police station in Manila uncovered a secret jail cell in a crawlspace, its door hidden behind a bookshelf. The police defended themselves by pointing out that their regular space for holding detainees was already overcrowded, but the fact that they took pains to conceal the ad hoc cell indicates a rather clear realization that what they were doing was wrong.

    Apart from the drug war, there is a sense that things are breaking down. At the beginning of Holy Week, the Abu Sayyaf terrorist group raided Bohol; even though that ultimately did not go well for the terrorists, it was a startling escalation of a problem that has largely been confined to the restive south of the country. And to make matters worse, the incident revealed a mole within the police, a superintendent married to an Abu Sayyaf bomb maker, who was actively trying to help the terrorists escape and very likely was feeding information to the terrorist group.

    On Saturday night, two bomb blasts killed two and injured six—including two police officers—in Quiapo, Manila, near the area where another bombing occurred during the Asean Summit about two weeks ago. The police were quick to rule out terrorism in the latest bombing (the earlier one appeared to have been the result of a personal dispute), saying that a Shi’ite cleric and Bureau of Internal Revenue official was the target, which is an explanation that makes one wonder if the police are actually working with a useful definition of the word “terrorism.”

    While all this is going on, the Communist rebels have increased their attacks in spite of peace overtures from the government, and the southern waters of the country have become one of the world’s piracy hotspots, with a couple of foreign hostages being killed in gruesome fashion by their captors.

    No matter how the government or its public and media supporters try to dismiss the problem, the bottom line is that the Philippines elected a President who openly espouses violence as a solution, and as a result the country has become more violent.

    As a result, some countries have issued advisories to their citizens to at the very least use extreme caution here if not avoid the Philippines altogether, and the response of the government has been to trot out the Tourism Secretary to complain that the foreign governments should “coordinate” with the Philippine government before issuing warnings, apparently unaware that all of those governments have their own people living and working here who can provide first-hand assessments.

    Unwinding the complex, dangerous web of the drug trade is a noble enough goal, but doing it with incendiary rhetoric and in such a way that it actually makes things worse—which is exactly what is happening—is irresponsible, and earns the country a deserved poor image abroad. Certainly, there is some good news here, but trying to point that out without frankly addressing the violent atmosphere is like highlighting that Hitler’s government did some really great work in expanding Germany’s road and rail networks and reducing unemployment without mentioning that whole genocide and armed aggression business.

    For companies, particularly outsiders, who are trying to invest and do business here, the situation will soon become awkward if the government continues to ignore the need for damage control. Enterprises like the business process outsourcing firms on which the Philippines’ economy relies heavily, for example, are going to find their own reputations questioned, either for supporting or turning a blind eye to a violent regime, or for being at risk of not being able to carry on because of the apparent growing instability in the country.

    The good news is the Philippines’ image problem can be fixed, without sacrificing the worthwhile policy ideals of Duterte or those who support him—the problem is one of execution, not intent. But it will require a great deal more honesty, respect for others’ points of view, and patience to engage in dialogue than he or his supporters have been willing to exercise so far.



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