• Duterte pivots to China, Russia as investors flee

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    MANILA: Philippine President Rodrigo Duterte said Monday he would seek closer economic ties with China and Russia, as the local currency and stock market extended declines following Western criticism of his deadly war on crime.

    The peso hit a seven-year low to the dollar on Monday and foreign investors pulled out from local shares for a 23rd straight day, which analysts said was due to growing uncertainty over Duterte’s handling of what has been one of Asia’s best-performing economies in recent years.

    “I will open trade alliances with Russia and China so all you other investors, just go. No problem,” Duterte said in a speech at the presidential palace.

    Duterte has attracted widespread criticism from Western governments and rights groups for a bloody crime crackdown has that claimed more than 3,300 lives since he took office on June 30.

    International credit rating agency Standard and Poor’s warned last week Duterte’s war on crime was threatening the Philippines’ economy and endangering its democratic institutions.

    It also said his unpredictable foreign policy and national security statements were other downsides that meant a credit upgrade for the Philippines was unlikely in the next two years.

    Duterte has responded with abusive comments against his critics over his war on crime, such as branding US President Barack Obama a “son of a whore” and UN chief Ban Ki-moon a “fool.”

    The Philippines, a former American colony, had up until Duterte been one of the United States’ most loyal and enduring allies in Asia. The two nations are bound by a mutual defense treaty.

    Duterte has repeatedly signaled he is looking to distance the Philippines from the United States, but his comments on Monday were his most explicit that he was planning to pivot towards US rivals China and Russia.

    Duterte said he had already privately spoken with Chinese President Xi Jinping and Russian Prime Minister Dmitry Medvedev, although it was impossible to immediately verify when the conversations had taken place.

    On Monday the Philippine stock market fell 1.18 percent to close at 7,632.46 points.

    “Global funds sold Philippine stocks for a 23rd straight day amid nervousness about the fallout from Duterte’s anti-drug war and his outbursts against the US and the United Nations,” Bloomberg reported.

    The local currency also fell 0.5 percent on Monday to 48.25 to the dollar, touching its lowest level since 2009.

    “(The peso’s decline is) mainly due to politics, with the Philippine president’s ongoing war on drug dealers and his intent to seem to alienate all of their major trading partners,” Jeffrey Halley, a market strategist at Oanda Asia Pacific Pte in Singapore told Bloomberg. AFP

    AFP/CC

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    9 Comments

    1. I still believe in Pres. Duterte’s leadership despite of criticism. He is cerebral, what happening now in his administration is a test for everyone – a call for Unity among Filipinos.

    2. Ignacio Balbutin on

      Bring in ex-president Arroyo as an economic adviser. Don’t listen too much to the leftist because they have no experience whatsoever about improving the economy, close your ear from any advice from Sison because you will bring down the economy of the country. Stop fighting with the US and the western countries because if they send back all the OFWs out of their countries then you will know what hell is really like.

    3. China would, I am sure, be prepared to make substantial investments in the Philippines – with strings attached. Probably an acknowledgement by the Philippine government that China is entitled to build defensive platforms in the South China Sea; recognition of the 9-dash line; and free trade that could gut Philippine manufacturing industry. But Du30 will be wined and dined, and treated like a king.

    4. Investors here mean those funds that invests in the stock market. Which is what is called hot money. So let us just be clear as the Philippine economy remains the same. No pull-out of any companies engaged IN BPOs, manufacturing, auto assembly, etc.

      If the pesos is lower against the US Dollar, what does that mean when other currencies are also lower against the US Dollar. The OFWs, and exporters will benefit.

      Now China has been courted by so many countries in the world for their investments. Russia not so much. But business goes to places where money can be made. And it is not based on political affiliation of a government. China is a communist country, Vietnam in not a pro-US country, etc etc etc.

    5. There is a very big difference between a politician and an economist. Ex president Arroyo is an economist and she jump started our economy which Pnoy Aquino followed by following Arroyo style.. Duterte has no background in economics that is why he is very careless in dealing with our foreign investors.

    6. DU30 will bring down Philippines to its knees, the poor filipinos will be the victim again. The AFP has to step-in immediately before its too late. Either AFP take him by force, or ask Him to flee the country.

      Before Philippines become a communist country, AFP has to step-in now with force, including all DU30 Cabinet, allies ( Senators and Congressman,), PNP Chieft Bato and General Visaya.

      AFP, GOD Save the Philippines.

      • For centuries the rich and our politicians had been using the poor for their own personal gains, why not help our president in his quest for the Philippine attain our true political, social and economic independence, we always idolized westerners as our savior where in fact they gain more from what they have given to us.

      • I really do not like this to happen, a military rule. You never know . Military abuses is the consequence. Do you think Marcos did all the abuses ? Only solution is for Duterte to shut up and let his advisors run the country. Every time he speaks, there is trouble. Duterte will not leave the presidency by himself. I do not want him to be force out of office. Remember, our country is under the rule of law and not the rule of the mob.

    7. Ignacio Balbutin on

      The acid test of Duterte’s policy is whether he can bouy up the economy. If the economy goes down and thousands of filipinos will be out of their jobs then the President should be ready to resign. The main job of the President is to take care of the country and the filipinos to be alleviated from poverty. If the economy of the country will be worse than the last administration then it will negate all his other accomplishments. He should stop fighting against the US and the western countries because they are the best source of investors not China or Russia.