Remarks delivered during the Forum “Getting Rody For Change: The Philippines in a New Political Landscape” organized by Publicus Asia, July 15, 2016, Club Filipino, Greenhills, San Juan

I think that no one can dispute that Mindanao is central or at the very least special in the Duterte administration. Why not? The President is from Mindanao, majority of his cabinet members are from or closely linked with Mindanao, the incoming Senate President is from Cagayan de Oro, the incoming House speaker is from the Davao region. People are now talking about imperial Davao but in fact, one of the President’s campaign lines was to unshackle the countryside from the bondage of Imperial Manila.

Before the President’s inauguration, many were anxious about Davao becoming the new capital. He was in Davao all the time and the President didn’t even attend his proclamation in Manila. But developments after the President’s inauguration suggest that these fears are unfounded. So far, he has been visible doing his Presidential duties in Manila as the nation’s capital. He relocated into Malacañang and he has been going home to Davao only on weekends. As a master tactician, I think the President knows that Manila is the center of politics and business and this is the arena to start his agenda for change.

But Mindanao is special and critical not because it is the power center but because it is the “laboratory” of two key policy reforms of President Duterte both having a huge impact on business and the economy. I’m referring to first, political and economic decentralization leading to a federal Philippines and second, peace and security.

Federalism, autonomy and decentralization are essentially a Mindanao ideology. PDP was born in Mindanao and founded by Mindanawons—former Sen Nene Pimentel and others. Federalism was championed by Mindanawon leaders---in fact the incoming speaker was one of the leaders of the One Mindanaw Movement.

The adage think global, act local is modified under President Duterte to “think local, act local”. And Mindanao will be exhibit “A” of the windfall and benefits when there is meaningful political and economic decentralization. We will see increased budget especially in infrastructure to the regions especially in Mindanao to strengthen the case for decentralization and federalism. We will see local solutions as templates for national problems. We have been seeing this---911 and anti-drug campaign of Davao replicated nationally. The message is that as long as you have good leaders, innovations can happen in local settings. The bottomline is that the windfall to Mindanao under the Duterte presidency is only incidental to the long-term reform of decentralization of development and governance and the end of the line for this is the shift to a federal Philippines. So if you are only thinking short term such as opening an office or a branch in Mindanao to be close to the power center, perhaps you should rethink on a more long-term basis.

If federalism will not fly, President Duterte will nevertheless put sustainable policies in place to strengthen decentralization and regional centers. For the next 6 years and beyond, there is no stopping decentralization. So businesses must not only develop branches but resilient business enterprises in the countryside that will have the capacity to grow under a distinct policy, political and cultural environment.

Local capacities will be an issue moving forward and as early as now, companies must help build capacities in the countryside. Special attention must be given to building capacities to navigate local policies that may under a decentralized system not uniform across all regions.

Just to illustrate, one of the problems why autonomy is not developing in the ARMM is that the region does not benefit from income derived from economic activities in the region from companies with head offices in Makati. Income is derived from the region but taxes go to Makati. But this will change under a decentralized system so your people must have the capacities to deal with the Makati tax men and women but also in regions where you operate.

Let me now go to the second policy reform: Bringing about sustainable Mindanao peace which is crucial for the sustainable economic take-off of the whole country.

If there is a President who can finally bring peace to Mindanao, it should be President Duterte. He is from Mindanao and understands the root causes of the problems of Mindanao. Rebel leaders are his personal friends. We don’t have time to discuss the peace process in detail but what is important is to understand is that a peace process is a process and there is no magic pill that will bring peace overnight.   I’ve warned the Duterte administration that if it does not play its cards right, federalism may turn out to be the BBL of this administration.

Federalism holds great promise for real autonomy not only for Muslim Mindanao but also all the other regions but we need to have the right framework and process moving forward. While Moro leaders publicly support federalism, many are anxious to put the Moro question in the Constitutional convention of diverse regional interests where weak regions such as the ARMM may not have a strong leverage. Thus, the road to federalism must be well thought off.

But whether federalism is realized or not, President Duterte has committed to change the constitution to bring about real autonomy in the Moro region as a means to peace. No other President has made that commitment. There is reason to be optimistic that finally we are seeing the light at the end of the tunnel in our quest for the elusive Mindanao peace.

So if you ask for my advice: Do you invest in Mindanao now or should you wait and see?

The time to go and invest in Mindanao is now. The Duterte administration may fail in other issues perhaps even in federalism but I am absolutely sure that regions outside the NCR especially the weak ones will be given more resources, and more powers before the term of the President ends. Take this rare opportunity, to work with local and regional leaders---in the case of Mindanao, with MINDA and the business chambers and councils. By doing so, you are actually helping build a nation with strong local centers. Business indeed can also be good when you think and act local.