Nograles: Don’t blame Duterte for stock market losses

A key ally of President Rodrigo Duterte at the House of Representatives said the president’s war on drugs and his tirades against foreign leaders should not be blamed for the losses that pulled down the Philippine Stock Exchange index.

In a statement on Tuesday, Davao City Rep. Karlo Nograles said the global market forces are the “main culprit” as investors are “influenced by the anticipation of monetary policy tightening in the US that prompted portfolio investors to reconfigure their portfolio allocations.”

The index closed on Monday at 7,632.46, losing 91.14 or 1.18 percent lower as foreign investors remained as net sellers for the 22nd straight session.

READ: PSEi down 1.18%

Nograles said stock market trading should not be used as a lone measure in gauging the economy, adding that the country’s economic growth is bound to improve on the back of the inflows of foreign direct investments (FDI) once the administration succeeds in its war against drugs and criminality.

“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 which is expected to grow even stronger once the administration has succeeded in winning the fight against crime and drugs. Peace and order is a key consideration for FDI locators,” Nograles added.

Nograles cited the position of Philippine Association of Stock Brokers and Dealers Inc. President Vivian Yuchengco, who said that investors began selling stocks long before Duterte waged his war on drugs.

Nograles also said foreign selling began before Duterte’s tirades against Western leaders like US President Barack Obama. Duterte had cursed Obama and called him a son of a bitch when a reporter pointed out to him that the US President planned to talk to him about the increasing human rights violations.

During the Asean meeting in Laos, Duterte also spoke of American atrocities against thousands of Moros during the US pacification campaign in the Philippines in the 1900s, in the presence of Obama and United Nations Secretary General Ban Ki-Moon, who strongly criticized the spate of human rights violations at the height of Duterte’s war on drugs.

READ: Duterte voices regrets for insult on Obama | Duterte: Obama, Ban mum when I raised killings during PH-US war 

Nograles assured that the country’s economic fundamentals remained strong, and that the country is bound to be a strong hub for foreign direct investments once the administration succeeds in bringing order in the streets and in resolving the insurgency.

The chairperson of the House appropriations committee said the country’s economic fundamentals would get a stimulus in the early passage of the proposed P3.35 trillion national budget in 2017 and in the grant of emergency powers for President Duterte to solve the traffic crisis.

“The national expenditure program is not only a budget for change. Large portions of the budget are for infrastructure projects that would expand the country’s investment potentials in other regions including Mindanao which has long been neglected in terms of development,” Nograles said. CDG

READ: House starts debates on proposed P3.35-T ‘budget for change’