Duterte seeks closer China and Rus­sia ties

The Myanmar Times - - International Business -

PHILIP­PINES Pres­i­dent Ro­drigo Duterte will 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 Septem­ber 26 and for­eign in­vestors pulled out from lo­cal shares for a 23rd straight day, which an­a­lysts said was due to un­cer­tainty over Mr 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,” Mr Duterte said in a speech at the pres­i­den­tial palace.

Mr Duterte has at­tracted wide­spread crit­i­cism from Western gov­ern­ments and rights groups for a bloody crime crack­down has that claimed more than 3300 lives since he took of­fice on June 30.

In­ter­na­tional credit rat­ing agency Stan­dard and Poor’s warned last week that Mr Duterte’s war on crime was threat­en­ing the Philip­pines’ econ­omy and en­dan­ger­ing the coun­try’s 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.

Mr 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 Mr Duterte been one of the United States’ most loyal and en­dur­ing al­lies in Asia. The two na­tions are bound by a mu­tual de­fence treaty.

Mr Duterte has re­peat­edly sig­nalled he is look­ing to dis­tance the Philip­pines from the US, but his lat­est com­ments were his most ex­plicit that he was plan­ning to pivot to­wards US ri­vals China and Rus­sia.

Mr Duterte said he had pri­vately al­ready spo­ken with Chi­nese Pres­i­dent Xi Jin­ping and Rus­sian Prime Min­is­ter Dmitry Medvedev, al­though it was im­pos­si­ble to ver­ify when the con­ver­sa­tions had taken place.

The Philip­pine stock mar­ket fell 1.18 per­cent to close at 7632.46 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 0.5pc 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. –

Photo: AFP

Ro­drigo Duterte is not con­cerned about los­ing US sup­port.

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