Economic Issue

There is an ongoing battle in Marawi that started in May between the government forces
and the ISIS wannabe, Maute Group. There are already casualties on both sides and some
civilian casualties. Evacuation of civilians to Iligan continues as social and economic life in
Marawi and the nearby areas have stopped. President DU30 has declared martial law in the
whole of Mindanao and lockdowns and checkpoints are in place in four provinces. He also
threatened to declare martial law in the rest of the country if the Marawi situation is not
contained and resolved.

There are already many opposing views for the necessity of declaring martial law, most
prominently by former president Ramos. He believes that the problem can be addressed by the
military without the declaration and threat of martial law. There are currently various socio-
political situations/conditions in a little over a week and the medium and long-term effects on the
economy will be the big problem.

Government economic managers issued statements that this Marawi incident will have
little effect on the Philippine economy especially if resolved in a short time. The stock market is
holding at its present level and there have been no massive sell downs. They also said that
because of the strong macro-economic fundamentals, the country's credit rating will not be
affected. Finance Sec. Dominguez opined that Marawi and the whole Autonomous Region of
Muslim Mindanao (ARMM), accounts only for .6 of 1 percent of the Philippine Gross Domestic
Product, (GDP); and the whole of Mindanao 14 percent of GDP. These support arguments that
economic realities do not warrant martial law beyond Marawi, and it would be difficult to
convince Congress and the Supreme Court to support martial law nationwide.

Due to the short period of this incident and the hope for early resolution, there are
undiscussed economic effects that will be significant as the conflict lengthens and prolongs.
Foreign and domestic tourism in Mindanao are already affected as foreign travel advisories have
been issued. Domestic travel to Mindanao from other provinces has been curtailed. Airlines
already have cancelled and reduced flights to Mindanao areas, as have all passenger vessels by
boat or bus. Travel and Tourism accounts for 20 percent of our economy/GDP, and Mindanao
takes 5 percent or P150 billion of the P3 trillion contribution of Travel and Tourism. The whole
of Mindanao also accounts for 10 percent of our economy, with agricultural production and
exports of agri products taking prominence.

This is a P1.4 trillion component to our annual GDP which may be at risk if the war in
Marawi is not contained and resolved soon enough. The 6.5 percent to 7.5 percent government
projection for the growth of the Philippine economy for 2017 will be trimmed to 5 percent if the
war will extend beyond 30 days, and this is only medium-term. If this war escalates and stretches
beyond 60 days, and martial law is declared nationwide, there will be greater economic
repercussions as it will start to affect the domestic and foreign investment components of our
GDP. Perception of socio-political instability will defer and discourage investments that we need
to increase the investment component of our GDP that have been largely consumer-driven.

The Issue and Solution

As stated previously, the declaration of Martial Law in the area of Mindanao does not seem to
pose any threat to the economy of the Philippines, given that it is resolved on time. Though there
are various opinions as to whether or not Martial Law is the best solution to address the
insugence in Mindanao it is rather posssible that the Structural Strain Theory is likely to take
place in this current situation in Mindanao. Structural Starin Theory believes that societies are
composed of two core aspects, namely: culture and social structure. It is in the aspect of culture
that our values, beliefs, goals, and identities are developed. These are developed in response to
the existing social structure of society, which is supposed to provide the means for us to achieve
our goals and realize positive identities. However, when our cultural goals are not in balance
with means made available by the social structure, and this is when structural strain occurs and
deviant behavior is likely to occur. This could possibly be the issue in Marawi when these Maute
group want to achieve their cultural goals but could not do so because of the present social
structure we have in the Philippines, which of course is obviously expressive in the rejection of
their ideoogy that they are forced to resort to violent means.
PROJECT IN SOCIOLOGY

A Paper in Partial Fulfilment of

Sociology 101 in

St. Paul University Surigao

To be Submitted to:

Mr. Rolando Orillaneda

Submitted by:

Prince Sam B. Platil