Manila / AFP
Philippine President Rodrigo Duterte said on Monday he would seek closer economic ties with China and Russia, as the local currency and stock market extended declines following Western criticism of his deadly war on crime.
The peso hit a seven-year low to the dollar on Monday and foreign investors pulled out from local shares for a 23rd straight day, which analysts said was due to growing uncertainty over Duterte’s handling of what has been one of Asia’s best-performing economies in recent years.
“I will open trade alliances with Russia and China so all you other investors, just go. No problem,” Duterte said in a speech at the presidential palace.
Duterte has attracted widespread criticism from Western governments and rights groups for a bloody crime crackdown has that claimed more than 3,300 lives since he took office on June 30. International credit rating agency Standard and Poor’s warned last week Duterte’s war on crime was threatening the Philippines’ economy and endangering its democratic institutions.
It also said his unpredictable foreign policy and national security statements were other downsides that meant a credit upgrade for the Philippines was unlikely in the next two years.
Duterte has responded with abusive comments against his critics over his war on crime, such as branding US President Barack Obama a “son of a whore” and UN chief Ban Ki-moon a “fool”. The Philippines, a former American colony, had up until Duterte been one of the United States’ most loyal and enduring allies in Asia. The two nations are bound by a mutual defence treaty.
Duterte has repeatedly signalled he is looking to distance the Philippines from the United States, but his comments on Monday were his most explicit that he was planning to pivot towards US rivals China and Russia.
Duterte said he had already privately spoken with Chinese President Xi Jinping and Russian Prime Minister Dmitry Medvedev, although it was impossible to immediately verify when the conversations had taken place.
On Monday the Philippine stock market fell 1.18 percent to close at 7,632.46 points. “Global funds sold Philippine stocks for a 23rd straight day amid nervousness about the fallout from Duterte’s anti-drug war and his outbursts against the US and the United Nations,” Bloomberg reported.
The local currency also fell 0.5 percent on Monday to 48.25 to the dollar, touching its lowest level since 2009.
“(The peso’s decline is) mainly due to politics, with the Philippine president’s ongoing war on drug dealers and his intent to seem to alienate all of their major trading partners,” Jeffrey Halley, a market strategist at Oanda Asia Pacific Pte in Singapore told Bloomberg.