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Philippines Bombing Could Shake Local Economy - 2003-03-09


Philippine officials and businessmen are assessing the costs and potential long-term consequences of recent violence in the southern Philippines. Local leaders say the area will rebound from the deadliest of the recent attacks, a bombing which killed 21 people last week.

In the city of Davao, people are still reeling from last week's attack, the country's worst in more than two years.

As a Muslim separatist conflict has raged in neighboring provinces, Davao has escaped the devastation and poverty that plagued the rest of the southern Philippines. It became a gateway to Southeast Asia, and it attracted foreign investors to its tourism industry, plantations, and trade.

But last week's bombing at the Davao airport, which also injured more than 150, has businessmen worried. "Prospective investors would probably think twice before pursuing their investments, says Romeo Serra, president of the Davao Chamber of Commerce. "People will now start getting away from the malls, and the moment they do, then that would mean sales in the malls and the restaurants would go down."

Businessmen said it is too early to quantify the actual damage to the economy. But one official said at least 700 visitors canceled plans to attend the city's annual festival next week.

For decades, the government of the mostly Christian Philippines has fought rebel groups wanting to establish an Islamic state in the southern islands.

Peace talks with one major group, the Moro Islamic Liberation Front, have stalled. In the past few months, the south has been hit by a number of bombings. Most have caused few casualties, but late last month large parts of the south were left without electricity, after attacks on the power system.

The Muslim militant group Abu Sayyaf has claimed responsibility for the Davao attack, and vows to destroy the economy with more bombings.

The recent violence in the Mindanao region has reverberated throughout the Philippine economy.

Since last week's explosion at the Davao airport, the Philippine peso has plunged to a record low on March 6 of 54.85 pesos to the dollar. Officials say a weak peso could bring a cascade of problems, such as higher prices for imports and commodities, and lower prices for Philippine exports. Currency traders worry that the peso will weaken further, if there is more violence.

There are concerns that these attacks, and any escalation of the violence, will reverse the country's economic growth. The Philippines economy grew 4.5 percent last year. The country's reputation is already battered by problems with corruption and the kidnappings of foreign tourists.

Many people, however, think the long-term damage may be modest.

Philippine Tourism Secretary Richard Gordon said he hopes that any negative impact will be short-lived, and visitors will continue coming to the country, despite the attacks.

Alfonso Aboitiz, president of Davao Light and Power, said he believes the city will rise up from last week's tragedy. "Davao is very strong, the people of Davao are strong, and we will pull together for this," Mr. Aboitiz said.

The local government responded swiftly to the bombing. Within 72 hours of the attack, police filed charges against several Muslim rebels suspected of planning the attack.

Mayor Rodrigo Duterte vows to seek justice for those killed in the attack, and has declared war against terrorists. "If I cannot restore Davao city to its former serenity, then I will create hell for the criminals," he said. "As sure as the sun will rise in the east, I will get you. We will not live in fear. Your government will never govern on bended knees."

Davao Chamber of Commerce's Mr. Serra supports Mr. Duterte's policy. "What if you do not take a strong stance? People will ram over us. We are a peaceful community here, but people ram over us. What shall we do? Submit to them? I f someone ram in my house, I have to make sure that I get him, so I think [it is] a no-win situation, if we do not take a strong stance," Mr. Serra said.

But some political analysts say the attacks are only symptoms of Mindanao's deep problems: underdevelopment, poverty, and a Muslim community angry at what it considers discrimination and neglect by Manila. Analysts say that without a comprehensive and sustained government response to the region's problems, security threats will continue to hang over the region's and the country's future.