WHEN a Filipino economist recently warned that a Sara Duterte presidency would be “full of fiscal risks,” the claim sparked controversy, not because it was outrageous, but because it captured only part of a more complicated reality. A fuller examination of Duterte’s record as a local executive reveals a leader whose economic governance resists simple categorization, confounding both her critics and her supporters.
The economist’s concern is not without merit. Sara Duterte has shown a troubling tolerance for fiscal opacity. During her tenure as mayor of Davao City, confidential expenses rose sharply, from P144 million in 2016 to P460 million by the time she left office, a threefold increase that exceeded the combined confidential funds spending of wealthier cities such as Quezon City and Makati. Over the course of her mayoralty, total confidential expenditures reached P2.7 billion. The pattern appeared to continue at the national level when, as vice president, she sought P250 million in confidential funds for an office that had never previously supported such allocations. These are not speculative accusations but documented fiscal choices that reflect a preference for discretionary spending over transparency and public scrutiny.
Yet the fiscal assessment of Duterte’s record cannot end there because the rest of the story is, by conventional economic measures, genuinely strong. When she assumed office in 2016, Davao City carried more than P1 billion in inherited debt. By the time she stepped down in June 2022, the city was completely debt-free. More notably, this was achieved without contracting a single new loan across all three terms of her leadership. Major infrastructure projects, roads, bridges, health centers and school buildings, were financed entirely through revenue rather than borrowing. Even during the Covid-19 pandemic, when most local governments experienced fiscal contraction, Davao posted combined revenues of P10.4 billion in 2021, 40-percent higher than pre-pandemic levels. The Commission on Audit reported no anomalies in the liquidation of confidential funds. Measured by debt reduction, revenue growth and infrastructure delivery, her local fiscal performance was undeniably effective.
Reconciling these two realities — fiscal discipline alongside opacity — requires a deeper understanding of the relationship between peace, security and economic development. This linkage is not rhetorical; it is a foundational concept in development economics. And that is the core of the governance approach of Duterte.
Mindanao illustrates what economists describe as the “conflict trap,” in which poverty and insecurity reinforce one another. For decades, absolute poverty rates in Muslim Mindanao exceeded 45 percent, unemployment ran at multiples of the national average, and life expectancy lagged far behind the rest of the country. These were not abstract humanitarian concerns but measurable economic costs of chronic instability. Conflict deters investment, constrains infrastructure development, drives out human capital, and diverts public spending from social services toward security.
Duterte understood this dynamic at the city level. Her Peace 911 initiative — credited by supporters with rendering Davao free of New People’s Army influence within two years — was not simply a security campaign. It was a precondition for fiscal consolidation, revenue expansion, and sustained economic growth. The so-called “peace dividend” is real: Once stability is achieved, investment flows more freely, productivity rises, and communities become less willing to return to conflict. Davao’s rise as one of the country’s most competitive cities did not occur despite a security-first approach, but largely because of it. A neutral economist would see that.
The more difficult question is whether this governance model translates effectively to the national level. Here, intellectual honesty demands restraint. Standard frameworks of good governance, as articulated by institutions such as the World Bank and UNDP, emphasize not only effective service delivery but also transparency, accountability and institutional participation. Duterte’s record scores well on fiscal conservatism, operational effectiveness and security-linked development. On transparency and institutional accountability, however, it is still notably weak for some.
This imbalance matters. The risks associated with discretionary opacity are limited, though still concerning, when exercised by a city mayor. They are categorically different when applied to a P6 trillion national budget, with confidential fund authority spread across many agencies. Scale transforms tolerance into systemic risk.
The most exact verdict, then, lies between the extremes. Sara Duterte’s fiscal record as mayor is neither the failure her detractors suggest nor the validation her supporters proclaim. She governed with fiscal restraint on debt, delivered tangible development outcomes, and showed a permissive attitude toward transparency. The Davao model, security first, followed by investment and growth, proved effective under specific local conditions. Whether it can scale nationally depends on a leader’s capacity to strengthen institutional accountability alongside stability. And the challenge becomes so real with the gaming of the budget from 2023-2025 at P1.5 trillion to P1.9 trillion and the belated revelation by the 18 security personnel of the former House appropriations chairman, Rep. Zaldy Co, of up to P805 billion maleta delivery.
It is also worth tempering expectations. No leader is a sudden remedy for decades of structural dysfunction. An economist should know that. The Philippines recorded a GNI per capita of $4,470 in 2024, just $26 short of the World Bank’s upper middle-income threshold yet stays classified as a lower middle-income country. Progress has been real, but fragile. Systemic weaknesses — including budgetary manipulation and entrenched patronage — continue to undermine long-term development. Institutional decay does not reverse within a single term. It takes sustained reform across multiple administrations (a total of four presidential terms) and a willingness to confront entrenched political, economic and cultural power structures that thrive on dependency and underdevelopment. Oligarchies rarely reform out of moral awakening; they change only when the cost of resistance becomes unsustainable.
Ultimately, the Filipino people have the talent, resilience and determination to succeed. What is still in question is whether the country’s institutions — and its leaders — are worthy of them. The work ahead is slow, unglamorous, and demanding, but it is necessary — not for past generations, but for those yet to inherit the republic.
The real question, then, is not whether Sara Duterte carries fiscal risk. It is whether that risk outweighs the entrenched systems that have shaped Philippine governance for generations — and whether any leader can confront them without first rebuilding the institutions that constrain power itself.
