The slide in the Philippine stock market should not be attributed to President Rodrigo Duterte’s relentless war on drugs and his outbursts against western leaders, a Davao lawmaker at the House of Representatives said on Tuesday.
In a statement, House appropriations committee chair and Davao City Rep. Karlo Nograles attributed the series of stock market losses to “global market forces”.
Nograles also said that the stock market should not be used as the gauge to measure the country’s economic health, stressing that portfolio investments are naturally unpredictable as investors are in constant hunt for more profitable stocks.
“Portfolio investments should not be used to gauge the economy because there are many factors that affect the stock market that’s not necessarily reflective of a country’s economic position,” Nograles said.
”The country’s economic viability as a location for investment is more closely reflected by its inflows of foreign direct investments (FDI) which is expected to grow even stronger once the administration has succeeded in winning the fight against crime and drugs,” he added.
Nograles said the mounting of stock market losses in the past several weeks was influenced by the expected monetary policy tightening in the United States, which prompted portfolio investors to reconfigure their portfolio allocations.
He quoted Vivian Yuchengco, president of the Philippine Association of Stock Brokers and Dealers Inc., as saying that the foreign sell-off in the Philippine stock market began even before his alleged verbal attack against US President Barack Obama.
Critics claimed that President Duterte’s tirades were the reasons why some foreign investors are pulling out, resulting in peso losses and a decline in the stock market.
The Philippine peso sank on Monday to P48-per-dollar level, its lowest since 2009.
The Davao lawmaker expressed confidence that the Philippines will emerge stronger as one of Asia’s primary hubs for FDIs with Duterte’s commitment to pursue peace and order in the country.