Philippines President Rodrigo Duterte is fighting two wars: a diplomatic war in the South China Sea, and a real war against corruption and drug trafficking at home. He doesn’t seem to know what he’s doing in either of them, leaving the country deeply confused, divided, and at odds with friends and neighbors.
That’s something investors should keep a close eye, as Dutertes’s policies are raising the geopolitical risks for investments in the region.
On the South China Sea diplomatic war, Duterte doesn’t seem to have a clue how to handle China’s ambition — to turn a vast open body of water into its own sea.
In fact, keeping up with Philippines’ President’s flip-flops on the South China Sea disputes is a difficult task. They began in July 2016 after an international arbitration ruling, which found that China has no historic title over the waters. That was a big victory for both the Philippines, which had filed the arbitration case, and its close ally the US, which wants the South China Sea to be open waters.