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Next job of Philippines' new president is winning over investors
[MANILA] After defeating his opponents in a heated presidential election in Philippines, Rodrigo Duterte will now need to win over Filipinos and investors watching closely for how he will manage the economy.
Mr Duterte, 71, claimed victory in Monday's election after preliminary results showed he secured about 39 per cent of the vote.
While the tough-talking mayor of Davao City won support with his pledges to fight crime, combat corruption and fix transport backlogs, uncertainty about his economic plans and his lack of experience in this area sent investors to the sidelines in the weeks before the election.
The peso weakened 1.9 per cent against the dollar in the past month and the Philippine Stock Exchange Index dropped for a third consecutive week by 2.3 per cent.
"We're looking for an administration that will have continuity - almost seamless - particularly in infrastructure," John Forbes, senior adviser at the American Chamber of the Philippines, said in an interview with Bloomberg TV's Haslinda Amin.
"The first challenge is going to be infrastructure because the growth of the economy has produced much more demand on roads and airports and seaports."
The one-month peso forward was little changed as of 7:07 am Singapore time Tuesday, after falling 0.3 per cent to 47.40 per dollar the previous session in New York.
The country's dollar-denominated bonds due in 2041 advanced Monday, sending yields down three basis points to 3.29 per cent, according to Bloomberg Bond Trader prices. The iShares MSCI Philippines exchange-traded fund declined 2.2 per cent to a two-month low.
Mr Duterte told reporters on Monday he may appoint Carlos Dominguez as finance chief or to head the transport department. Mr Dominguez was agriculture secretary in the cabinet of late President Corazon Aquino.
He owns Marco Polo Hotel and is a childhood friend of Mr Duterte.
Once labeled Asia's "sick man", the nation of 101 million people has earned World Bank praise as the continent's "rising tiger" under outgoing leader Benigno Aquino III, posting average annual growth of 6.2 per cent over the past six years, the fastest pace since the 1970s.
Despite those gains, poverty rates remain high and Mr Duterte tapped rising discontent among millions of voters who feel they haven't benefited from Mr Aquino's reforms.
Faster growth and 4 million jobs created during Mr Aquino's six-year term led to record car sales, but also clogged up Manila's already gridlocked roads as infrastructure spending failed to keep pace with economic expansion.
Mr Duterte has been making positive signals to investors. He told online news website Rappler in an interview published on Monday that he will consider raising the 40 per cent foreign ownership limit in certain industries to win over investors. He also pledged to work with countries in the region to boost trade.
"There is a pragmatic streak within Mr Duterte," said Richard Heydarian, a political science professor at De La Salle University in Manila. "In fact, when he talks to businessmen, when he talks to people from the establishment, he tends to say, if I'm going to be president, I'm going to put the best advisers around."
Mr Duterte said he may tap his former classmate Jesus Dureza, who was a press secretary for then-President Gloria Arroyo, to head a peace panel, and turn to his running mate Alan Cayetano as foreign secretary. He also said his team may comprise former military men and other school friends.
"Our mayor has been successful in making Davao investor-friendly," Bonifacio Tan, president of Davao Chamber of Commerce, said in an interview. "The mayor really does what he says. The mayor may be a bit emotional, when he speaks, when he gets mad, he sometimes expresses foul language. The way he talks does not show the real government official he will be."