Date
8 December 2016
The Philippine peso fell to a seven-year low in October as foreign investors pulled money out of the country. Photo: Bloomberg
The Philippine peso fell to a seven-year low in October as foreign investors pulled money out of the country. Photo: Bloomberg

Philippine peso seen sliding further amid Duerte’s anti-US rants

The Philippine peso is expected to weaken past 50 dollar next year, a level last seen in November 2008, as foreign investors remain concerned about President Rodrigo Duterte’s outbursts against key trading partners, especially the United States.  

The currency fell to a seven-year low of 48.618 in October, and was Asia’s worst performer in the third quarter, when it slid 3 percent, Bloomberg noted.

Global funds have pulled more than US$600 million from Philippine stocks since inflows this year peaked in August as Duterte cursed while talking about US President Barack Obama and announced a “separation” from Washington.

Credit Suisse Group and Rabobank predict the peso will slide past the 50 mark next year.

“Economic impact is difficult to gauge at this stage and may only be seen longer term, but the uncertainty on his foreign policy could deter foreign investment,” Trang Thuy Le, a macro strategist in Hong Kong at Credit Suisse, told Bloomberg.

“For now, we think it warrants a higher degree of risk premium and volatility to be priced in the Philippine peso.”

Pioneer Investment Management doesn’t see the peso as a long-term, strategic investment.

Concerns that Duterte’s outbursts may jeopardize investments in Philippines have forced top officials in his administration to assure companies their interests will be protected as the leader builds new global alliances.

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