Duterte makes a fist. (Photo : Getty Images)
The headline grabbing craziness of Philippine president Rodrigo Duterte and his maniacal obsession with a lawless drug war that has killed over 3,000 Filipinos in just two months has begun damaging the erstwhile robust Philippine economy with foreign investors beginning to pull out millions of dollars in investments.
Foreign investors have begun taking their money out of the Philippine stock market at a fairly fast pace, apparently discomfited by a rash of senseless rants from Duterte trashing the U.S. and the United Nations and threatening to chart an "independent foreign policy" gravitating towards China.
During his term as mayor of Davao City in Mindanao island, Duterte was accused of either being a communist sympathizer or a member of the communist New People's Army fighting to turn the Philippines into a communist state.
Official data from the Philippine Stock Exchange (PSE) showed the net foreign transactions on the benchmark PSE index fell every week between Aug. 15 and Sept. 16.
The Philippine peso plunged 3.37 percent against the dollar during this period, while the benchmark index has been the worst performer in the region over a one month period.
The PSE index fell 4.48 percent, compared to a 2.99 percent drop in the Stock Exchange of Thailand and a 1.74 percent decline in the Jakarta composite index.
"The President's statements have been very volatile these past few days, and it's starting to be a concern," said Lexter Azurin, research head at Manila-based Unicapital Securities.
"It seems that the current administration has lost its focus on prioritizing economic programs, and leaning towards more on solving the drug problem in the country."
Analysts said Duterte's irrationality is weakening investor confidence and rapidly eroding the stability that lured investors to the Philippines during the six-year term of Duterte's more level-headed predecessor, Benigno Simeon Aquino.
Observers previously expected Duterte to continue Aquino's policies to ensure the Philippines can maintain its rapid economic growth rate. That growth hit 7% during the second quarter of this year, thanks to Aquino's policies.
Duterte's economic policies, which Duterte hasn't spoken about at any length since he came into office, will make themselves felt next year. Analysts said Duterte's maniacal obsession with killing thousands of drug peddlers and drug addicts reveals his lack of concern or knowledge about the broader economy.
Some of Duterte's economic policies such as liberalizing foreign direct investments and increasing infrastructure investment are good news for investors but Duterte's continuing spate of bizarre rants is weakening investor confidence. Nothing has been heard on how Duterte's team will implement its heavily-hyped "10 point economic agenda."
