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Duterte Arrest Raises Stakes in Clash for Control of Philippines

(Bloomberg) -- Three years ago, the most powerful political families in the Philippines joined hands to secure the nation’s biggest election victory in four decades. Now they are locked in a feud that threatens to derail one of Asia’s economic growth stars.

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In dramatic events on Tuesday, Philippine President Ferdinand Marcos Jr.’s government arrested and deported his predecessor Rodrigo Duterte to face the International Criminal Court in The Hague. The move came just over a month after the impeachment of his daughter, Vice President Sara Duterte, by allies of Marcos. A Senate trial, which would determine whether she gets removed from office, is scheduled to begin in July.

The push by Marcos to sideline his main political opponents marks a gamble that could easily backfire, starting with legislative elections in May that will determine how much he can accomplish in the final three years of his term. The Dutertes still hold clout, with Sara a top candidate in polls to win the next presidential vote in 2028.

Just prior to his arrest at the Manila airport, the elder Duterte was regaled by thousands of adoring supporters at a Hong Kong stadium, showing the enduring appeal of an outspoken politician frequently compared to Donald Trump. And while Marcos also remains popular, his approval ratings have declined in part due to stubbornly high inflation.

“If something bad happens to the economy, then sympathy might shift to the Dutertes,” said Bob Herrera-Lim, managing director of Teneo, a risk consultancy. “For the Marcoses, this is a calculated risk to eliminate the Dutertes as their primary opponent.”

The danger is that the political rift undermines business and household confidence, posing a headwind for growth in one of Asia’s best-performing economies. The Philippines’ benchmark stock index fell more than 2% on Tuesday, the most among Asian equity gauges and its biggest drop since Jan. 31.

For Duterte, 79, the next step is facing charges in the Netherlands-based ICC over his drug war that killed more than 6,000 people. Although Marcos initially refused to cooperate with the ICC, that stance changed last year, after ties with his deputy ruptured over policy differences.

Marcos has sought stronger ties with the US to confront Beijing in the disputed South China Sea — a sharp shift from Duterte’s China-friendly foreign policy. The Philippines has clashed frequently with China under Marcos, who has allowed the US to expand its military presence in the nation.