MANILA (GN) - Philippine President's foreign policy, Rodrigo Duterte hard against its ally, the United States and China, got the "threat" from foreign investors in the Philippines. Launch CNBC, Tuesday (09/20/2016), foreign investors choose to pull their money out of the stock market in the country.
Foreign investors expressed outraged by the statements expressed Duterte, such as when he insulted the President of the United States, Barack Obama, as the son of a bitch for interfering domestic affairs of the Philippines regarding the war on drugs and calling for US troops to pull out of the Philippines. Similarly, the harsh comments against China about the South China Sea.
Official data from the Philippine Stock Exchange showed net foreign transactions in the Philippine Stock Exchange (PSE), falls on a weekly basis since 15 August to 16 September 2016. In the period 15 to 19 August, PSE fell 3.32%; August 22 to 26 fell 3.54%; 29 August-2 September dropped to 7.55%; 5 to 9 September fell 7.46%, and 12 to 16 September passed down 4.25%. This decrease sharply lower than the decline in the stock exchange of Thailand (2.99%) and a decrease in the Indonesian stock exchange amounted to 1.74%.
The same thing also happened in the peso fell 3.37% against the US dollar during this period. The decline is the worst in the region for a period of one month.
"The President's statement triggered the economic fluctuation in recent days. And it (the statement Duterte) began to attract attention (foreign investors), "said Lexter Azurin, head of research at Unicapital Securities in Manila, told CNBC on Tuesday (20/09/2016).
Some foreign observers estimated Duterte regime has locked the Philippine economy, which earlier in the era of President Benigno Aquino III bolted and touted as the country with the fastest growth rates in the world. When the period of April to June 2016 the Philippine economy grew 7.0%, higher than China's economic growth of 6.7%. Pinoy - designation for the Philippines - only to lose to India which flew 7.1%.
Senior economist at French investment bank Natixis, Trinh Nguyen said Duterte harsh comments against the US is very significant and prompting foreign investors withdrew from the Philippines. Because the US has been a traditional ally of them. Even the land of Uncle Sam became a major supporter of the Philippines in the country's dispute with China in the South China Sea.
Azurin Duterte added administration lost focus in prioritizing economic program, and select leaning towards the war on drugs. "The current government has lost focus on the economy and leaning towards solving the drug problem in this country," he wrote.
Such conditions, continued Azurin, foreign investors assess the administration Duterte is not investor friendly. This condition will be even worse if the US central bank, the Federal Reserve raised interest rates so that would trigger a capital outflow alias capital outflows from emerging markets back to developed markets.
But not all of the blame Duterte. Nomura equity research institutions and call a neutral position Duterte will only strengthen the Philippine economy, because it managed to remove themselves from dependency. The economic fundamentals in the Philippines will be strengthened with healthy domestic consumption.
Duterte diusulakan tax reform - part of 10 his economic plan - have increased their domestic consumption. Even the level of domestic consumption is expected to rise 70%, which will encourage the growth of the Philippine economy.
Related to the threat of capital outflow, Nguyen said Duterte should anticipate by creating jobs in order to maintain the broadest people's lives so as to keep the economy in a stable condition.
Meanwhile, quoting from ABS News, Tuesday (20/9), Chairman of the Philippine Chamber of Commerce and Industry, George Barcelon defend its President. He calls so far, foreign policy Duterte no harm foreign investor sentiment.
Barcelon said Duterte step is an independent foreign policy. "We're not pro-China or pro-American. We pro-Philippines, "he said. And report the murder of drug offenses, he said, do not disturb the sentiments of entrepreneurs in the Philippines.
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