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Drug trade still fuels extremism in Philippines

Shadow economies, underpinned by illegal drug trade and gunrunning, will continue to fuel violent extremism and attacks on urban areas in the insurgency-wracked southern Philippine island of Mindanao, experts warned.

"The Maute group may have been effectively defeated in the case of Marawi but not in the case of the ideology. The ideology remains," Mr Francisco Lara, Philippine manager of the World Bank-funded think-tank International Alert, said at a news briefing.

The radical Maute group provided the bulk of fighters that stormed Marawi city on May 23 and held large parts of it for five months.

Mr Lara said a "major enabling factor" is the rise of shadow economies that provide resources and funding to the Islamist militants. Money from drug deals, extortion rackets and kidnappings allowed the Maute group to lay siege to Marawi.

Security forces seized 11kg of crystal methamphetamine, worth up to 250 million pesos (S$6.7 million), as they fought their way to areas controlled by the militants in Marawi in June. Mr Lara said Marawi provided a fertile target as it was a "seat of the drug industry" in Mindanao.

"A hornet's nest was stirred by the Duterte government when it launched the anti-drug campaign, turning a relatively peaceful enterprise into a site of violent conflict," the report said.

It added that violence in the Philippines since President Rodrigo Duterte launched his drug war last year has spiked as police took a heavy-handed approach.

It said a "political economy analysis" of the relationship between shadow economies and violent extremism is needed to set up mechanisms that can weaken factors that strengthen that link.

It warned that unless this is addressed, violent extremism and "urban violence will increasingly feature in the conflicts of the future".

The Maute group is already reported to be rebuilding its forces in its stronghold in Lanao del Sur province.

WORLD