MANILA – The Philippine economy remains “stable” even as President Rodrigo Duterte’s sharp rhetoric against the United States aided a record selloff by foreign investors in the equities market, debt-watcher Fitch Ratings said Thursday.
However, Fitch is watching closely whether Duterte could sustain the governance reforms started by his predecessor, Benigno Aquino III, said Sagarika Chandra, associate director for sovereigns at Fitch ratings.
The Philippine Stock Exchange closed 1.69 percent higher to 7,714.86 on Thursday for a second straight day of gains. This followed 25 straight days of net selling of foreign investors, the longest streak since 1998.
“Apart from the portfolio flows, outflows at the moment, on the real economy front the data still looks stable but yes it is something that we are also monitoring,” Chandra told ANC’s “Market Edge with Cathy Yang,” when asked about Duterte’s statements on the US.
“One of the uncertainties that we have, something that we monitor for the Philippines, which is in line with the ratings sensitivities, is whether the improvement in governance standards that were achieved under the previous administration can be maintained,” she added.
Duterte has thrown constant jabs at the Washington, Manila’s longtime ally, after US officials raised alarm over the mounting casualties linked to his war on drugs. He has also sought to close ranks with China despite a bitter maritime dispute.
On Wednesday, Duterte said he wanted to end joint military drills between Filipino and American soldiers.
He had threatened to curse at US President Barack Obama and raised American wartime abuses during a Southeast Asian leaders’ summit in Laos earlier this month.
“There’s been some outflows like you said from the equity markets because of some investors having a slightly negative perception,” Chandra said.
Last week, American debt-watcher S&P Global Ratings said an upgrade for the Philippines was “unlikely” due to unpredictable policy-making with Duterte focused on his anti-narcotics drive.