Shares sink to 7-week low on unease over Duterte


Rodrigo Duterte

Shares fell to their lowest level in seven weeks as a lack of clarity in presidential frontrunner Rodrigo Duterte's economic platform caused market jitters, analysts said.

The Philippine Stock Exchange Index fell 2.4 percent to 6,985.98, its lowest since March 10, tracking a seventh straight day of losses.

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.

"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.

Duterte instead vowed to wage a "bloody" war against crime and joked about Viagra use in that profanity-laden speech before the Makati Business Club.

The tough-talking mayor led closest rival Sen. Grace Poe by 11 points in the April 19 to 24 survey by ABS-CBN and Pulse Asia. His lead appeared undiminished by backlash over a joke he made on the rape of an Australian missionary in 1989. [SURVEY ]

But Duterte was faced with another controversy after Sen. Antonio Trillanes, a vice presidential candidate supporting Poe's bid, accused him of keeping P211 million in a secret account at Bank of the Philippine Islands (BPI).

Duterte admitted to the account after his spokesman initially denied it, but said it contained much less. He authorized his lawyer, Salvador Panelo, to make public the account details at the bank's Julia Vargas branch on Monday.

If Duterte wins and the hidden wealth allegations are unresolved, Trillanes could have him impeached, plunging the country into uncertainty, said AB Capital Securities analyst Alex Tiu.

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

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.

Incumbent Benigno Aquino has been credited with turning the economy around from Asia's sick man, to a growth leader among emerging markets. His preferred successor, former interior secretary Manuel Roxas, has trailed Duterte and Poe in the surveys.

Aquino raised revenues and cracked down on tax cheats and smugglers and was rewarded with investment grade scores from leading debt-watchers Standard & Poor's, Fitch Ratings and Moody's Investor Service.

The economy grew 5.8 percent last year and analysts forecast as much as a 6.5-percent expansion this year.

However, Aquino has been criticized for failing to significantly dent poverty during his six-year term. An ambitious plan to overhaul the country's creaking infrastructure was not completed. -- with a report from Reuters