In an attempt to protect the public interest against those he calls "oligarchs," Philippine President Rodrigo Duterte recently threatened to overturn decades-old water supply contracts held by prominent businessmen the Ayala brothers and Manuel Pangilinan, known for their liberal leanings.

Duterte has repeatedly complained about water shortages in dry seasons and the relatively high prices of privatized basic services in the Philippines without providing any concrete alternatives.

Simultaneously, he has threatened to shut down the country's biggest media conglomerate, owned by the liberal-leaning Lopez family, for supposed estafa, or fraud, and other unsubstantiated charges. It is the first time since the Ferdinand Marcos dictatorship that a major Philippine media company has confronted the prospect of closure under a hostile president.

Duterte is certainly correct to question the stranglehold of a narrow elite on the country's public services and strategic sectors. But populist grandstanding and strong-arming are the last things the Philippines needs as foreign investment declines and the global economic environment looks more fragile.

Presenting himself as a man of the masses who wants "billionaires in prison," the Filipino populist has -- without presenting evidence -- accused big private companies of "syndicated estafa," or systematic fraud, and of imposing "onerous" deals on the public.

Meanwhile, skeptics and market watchers are concerned about how Duterte-friendly businessmen and longtime allies, known as Dutertegarchs, have opportunistically sought to exploit uncertainties to gain shares in besieged conglomerates for their own private interest.

While all of this makes for good politics, as Duterte's high approval rating of 87% in December shows, the Philippines can hardly afford assaults on rule of law without hurting its tentative economic prospects.

The correct thing for Duterte to do would have been to contest any questionable contracts in court; provide evidence for any public charges of abuse under existing contracts with major conglomerates; and strengthen antitrust legislation and the Philippine Competition Commission to counter monopolistic practices.

To be fair, overall economic conditions are far from dire. Steady macroeconomic indicators have led to the country's highest credit rating in history, and thanks to tax reform and his ambitious "build, build, build" development program, infrastructure spending as a share of GDP has reach a new high, as has the effectiveness of tax collection.

Meanwhile, foreign direct investment pledges doubled last year, reaching a record $7.7 billion.

So why should we be worried if Duterte is spooking oligarchs?

First, he is riding on the positive legacy of his predecessors. As Finance Secretary Carlos Dominguez III acknowledged at an Asian Development Bank event, "If we are experiencing a golden age of economic growth, this did not happen overnight. First of all, it took a lot of work" by previous administrations, which "set the groundwork."

Moreover, there are few signs of inclusive development, since the country's most vulnerable communities continue to struggle with poverty. For instance, self-rated poverty increased by 12 percentage points to a new high of 54% in the last quarter of 2019. At the same time, self-rated food poverty increased by 6 percentage points, reaching 35%.

Among the most adversely affected are farmers, who have had to grapple with large-scale rice imports in the past year following the implementation of a law which removed restrictions on the quantity of food which can be imported, instead imposing tariffs.

The policy, which was designed to combat rising inflation, has driven millions of farmers into greater misery, with one study suggesting domestic rice producers suffered $1.3 billion in losses.

Among the most adversely affected are farmers, who have had to grapple with large-scale rice imports. © Reuters

There are signs that Duterte's populist grandstanding and arbitrary decision-making are turning off investors, who fret over lack of rule of law and potential threats to the sanctity of contracts. In the wake of the president's tirades and threats against liberal oligarchs, Nokia, Wells Fargo and Honda Motor announced major drawdown in their investments in the Philippines, threatening more than 1,700 well-paying jobs.

In terms of actual, rather than pledged, foreign investment, the country has actually posted negative growth. In 2018, FDI into the Philippines fell by 4.5% from its record high the year before, and was down 30% to $6.4 billion between January and November 2019 compared with 2018.

Deteriorating human rights conditions and violence across the country have also alienated investors. "We strongly believe in the importance of the rule of law, due process and respect of human rights in all countries, including the Philippines. Security is the issue investors are most concerned with when they decide and choose a place or country," warned Lee Ho-ik, president of the Korean Chamber of Commerce of the Philippines, at the height of Duterte's brutal drug war, which claimed the lives of thousands of suspected drug dealers. "To be frank with you, to date... the Philippines is not a safe country."

That is why erratic leadership hurts the country. Duterte's often arbitrary decision making, including the monthslong shutdown of Boracay, the country's leading tourist destination, has not helped. Nor have Duterte's brazen threats against supposedly independent courts not to hold judicial reviews of shoddy investments from China in the country.

Far from serving the public's interest, Duterte's brand of authoritarian populism is progressively undermining major reforms in recent years, further dimming the Philippines' otherwise bright economic prospects.

Richard Heydarian is an Asia-based academic, columnist and author of "The Rise of Duterte: A Populist Revolt Against Elite Democracy" and the "The Indo-Pacific: Trump, China and the New Struggle for Global Mastery."