President Rodrigo Duterte appears intent on provoking the Communist Party of the Philippines New People's Army (CPP-NPA) through threats and arrests. The NPA is likely to respond by stepping up its campaign against state and commercial entities.
- 23 November 2017: President Duterte terminated the government's peace negotiation with the CPP-NPA.
- 5 December 2017: Duterte signed a proclamation declaring the CPP and the NPA,which has been fighting successive Philippine governments since 1969, terrorist organisations, making it illegal to provide any financial support to these groups.
- 15 January 2018: Duterte warned the NPA's urban assassination teams (sparrow units) had been reactivated in order to attack the security forces. In the past the presence of sparrow units led the government to raise its own death squads as a counterforce.
- 24 January 2018: A senior army commander reported the NPA had extorted an estimated PHP1.48 billion (USD29 million) from local mining and agricultural interests operating in the eastern regions of the southern island of Mindanao during 2017.
- 27 January 2018: Duterte ordered an investigation into allegations that local and foreign companies, notably in the mining and agribusiness sectors, were continuing to pay the NPA revolutionary taxes'.
- 31 January 2018: The police arrested two senior officials from the National Democratic Front (NDF), a leftist coalition closely aligned to the CPP.
- 2 February 2018: The police announced a leading CPP official who had been involved the abortive peace talks with the government had been arrested on murder charges; within hours the police clarified the suspect, CPP Secretary Rommel Dorango Salinas, had been in custody since May 2017. There has been explanation over the timing and purpose of the police announcement.
- 3 February 2018: The military announced it had captured the NPA's alleged top finance officer on the southern island of Mindanao.
- 4 February 2018: CPP founder Jose Maria Sison calls for intensified attacks against the military, claiming that the NPA has the capacity to kill a soldier a day in each of the country's 17 regions.
- 5 February 2018: The security forces said that they were ready for intensified attacks from the NPA.
Duterte's decision to move against the CPP-NPA-NDF has been signalled for many months. Despite his declaration on coming to power in June 2016 that he would seek reconciliation with the communists, Duterte has steadily reversed his position as he sought to marginalise the political and armed wings of the party. Further, Duterte's record of being prepared to use a high degree of force against his opponents, as his use of extrajudicial killings against suspected drug dealers demonstrates, has greatly reduced the incentives for the communists to seek any form of reconciliation with him while increasing their priorities to resist or simply survive until a more amenable national leader emerges.
the NPA can be expected to seek cash from those companies operating in the mainly remote regions where its cadres can extract revolutionary taxes, regardless of the government's threat to prosecute companies willing to pay for protection
This is likely to be manifested in the CPP/NPA's efforts to step up operations against the state and security forces while seeking to attract new recruits and garner additional funding. As the latter helps produce the former, the NPA can be expected to seek cash from those companies operating in the mainly remote regions where its cadres can extract revolutionary taxes, regardless of the government's threat to prosecute companies willing to pay for protection.
Duterte's warning to companies notably those in the mining and plantation sectors that remain the main target for NPA taxcollecting that any payment to the communist insurgents will be treated as money laundering is likely to have two consequences. The first is that companies will seek to upgrade their security and the second is that some at least will explore discreet means to pay off the NPA in order to remain in business.
Any increased non-state security the military has neither the personnel nor the intention to provide protection for the numerous commercial operations in areas where the NPA threat is highest will merely facilitate the transfer of weapons and other equipment from private guard contractors to the insurgents. Most NPA attacks against mining sites, plantations and other businesses are bloodless as the insurgents see no gain in causing casualties among the locally recruited and usually poorly paid security guards.
According to A2 Global Risk sources, the insurgents often warn the often small and ill-trained security detail of an impending raid. This enables them to put up token resistance before surrendering their arms and equipment. As a result, private security companies help sustain the NPA's armoury by serving as their de facto arms suppliers.
The second consequence is that companies operating in high-risk areas may find insurance either prohibitively expensive or impossible to obtain following Duterte's order. Faced with the threat from insurgents and the government some companies may, as noted, seek to continue paying off the insurgents while others suspend their operations altogether.
The CPP-NPA pose no direct threat to the Philippine state, but they do increase the risk and cost of doing business in the more remote regions of the country. Unlike the country's Islamist and separatist groups who are concentrated on Mindanao, the NPA are active in almost all the Philippine provinces. As noted, it is the local and foreign companies engaged in mining, farming and infrastructure projects that are specifically threatened by the insurgents, and this risk will increase if Duterte's efforts to seek military and legal solutions to counter the CPP-NPA draw an equally determined response from the communist insurgents.
This will become more evident if, as expected, powerful Islamist extremist groups succeed in regrouping and rebuilding their forces, weapons and equipment in Mindanao in order to launch another major campaign against the security forces. It may well be that this looming threat provides the motive for Duterte's anti-communist campaign, although it is unlikely the country's already over-stretched and under-resourced security forces will be able to successfully confront two radically different opponents.
Foreign companies and investors, as well as their financial backer and insurers, currently active in the Philippines or considering opportunities in the country, should ensure they have accurate and detailed information regarding the threat from the NPA.