(Bloomberg) — Philippine stocks extended their slump, underperforming Asian peers as corruption allegations on government officials eroded investor sentiment and triggered foreign outflows. The peso also weakened.
The Philippine Stock Exchange Index fell as much as 1.5% on Tuesday, declining for the seventh straight session in its worst run of losses since December 2024. The benchmark is now at a five-month low. Offshore investors have been retreating in recent sessions, unloading a net $7 million on Monday after pulling $9.5 million on Friday, according to data compiled by Bloomberg.
The equity selloff and a slide in the peso followed scandals in the government’s flood-control projects that triggered mass protests earlier this month, amplifying pressure on President Ferdinand Marcos Jr. to push through reforms. How his administration responds may determine whether investor confidence stabilizes or erodes further in the months ahead.
Philippine assets are “weighed down by political jitters amid the probe on massive government corruption on flood control projects,” said Marlyne Fernandez, president of Unicapital Securities Inc. in Manila. “Investors continue to assess the potential economic fallout of the corruption scandal, with close attention on how the government responds to restore confidence and contain risks.”
Read: What’s Behind the Flood Graft Scandal in Philippines?: QuickTake
The Philippine peso has been Asia’s worst performer this month, as a resurgent dollar added further pressure. A Bloomberg index of Philippine bonds has handed dollar-based investors a 1.4% loss in September, the worst performer in emerging Asia. Bonds have come under pressure after inflation picked up in the latest data. This came on the back of comments from the Bangko Sentral ng Pilipinas governor at the end of August that the central bank may stand pat on its policy rate for the remainder of the year.
“Political and corruption news just add uncertainty, which funds and investors do not like,” said Jasper Timoteo Ondap, equity research analyst at Regina Capital Development, adding that foreigners sold stocks as the peso remained under pressure.
–With assistance from Marcus Wong.
(Updates with bond returns in the fifth paragraph.)
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