Peso, stocks reach lowest level in 7 weeks due to Duterte controversies

Peso, stocks reach lowest level in 7 weeks due to Duterte controversies

Shares have reached its lowest in seven years as a result of the clamor brought about by the leading presidential candidate Davao City Mayor Rodrigo Duterte.

According to analysts, the falling of the Philippine Stock Exchange Index is caused by the lack of clarity in Duterte's economic platform causing market jitters. As of Tuesday, the stocks have reached, 6,985.98, a 2.4 percent decrease since March 10. It also reflects seven straight day of losses.

"He has not been very specific on his economic policy, that's why there have been market jitters. He appeared before a business group last week and it was not received favorably," said Luz Lorenzo, an analyst with Maybank KimEng.

The peso weakened to P47.04 against the dollar in early trade from Friday's close of 46.89, according to data from the Philippine Dealing System.

During his speech in front of businessmen, Duterte vowed to start a "bloody" war against crime. Duterte also joked about using Viagra which was inappropriate and uncalled for at the meeting with Makati Business Club.

After that meeting, the mayor was bombarded with another issue. Sen. ANotnio Trillanes, a vice president candidate, accused him of keeping P211 million in a secret account at Bank of the Philippine Islands (BPI).

The mayor’s camp, represented by Atty. Salvador Panelo, had a face-to-face encounter with Trillanes last Monday at the BPI Julia Vargas branch.

Investors' reaction will depend on how much information on Duterte's BPI bank account will be made public, BDO Capital and Investment Corp. President Ed Francisco said.

"If he shows the transactions, if he really shows that during the period that Trillanes is stating that he had this hundreds of millions, if there really is no balance, then that clears him," he said.

"If he only shows the ending balance, that’s a little scary because that would lead some doubts from the voters and investors’ perspective," he said.

However, BPI said they need time before releasing transaction details and history.

If Duterte wins, AB Capital Securities analyst Alex Tiu, said that Trillanes could have him impeached, plunging the country into uncertainty.

"This will send jitters to foreign investors. This will cause the market to slow down," Tiu said.

 

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