MANILA, Philippines — The government downplayed anew the local financial market sell-off on Monday, with the finance chief set to embark on his first overseas trip to meet with multilateral lenders amid concerns on President Rodrigo Duterte's harsh rhetoric and drug war.
"How can you change based on an election? You must change on what you actually see," Finance Secretary Carlos Dominguez told reporters on the sidelines of the budget hearing at the House of Representatives.
"I mean we are still paying our debt. Our global debt is going down...You look at the dollar is doing around the world. You know when (US Federal Reserve chair Janet) Yellen says we might raise the rate, that will affect us, its not only our situation," he said.
Dominguez is set to represent the Philippines at this year's spring meetings of the World Bank and the International Monetary Fund (IMF) from October 7 to 9 in Washington D.C.
He will be accompanied by Socioeconomic Planning Secretary Ernesto Pernia and central bank Governor Amando Tetangco Jr.
Asked if he is willing to answer "issues" on the Duterte administration, Dominguez said "it will depend what issues will be brought up" without elaborating.
Duterte's three-month-old government has been haunted by a 22-day foreign fund outflow at the benchmark Philippine Stock Exchange index (PSEi) as of Monday.
PSEi closed 1.18 percent or 91.14 points down at 7,632.46, unable to sustain its more than two-percent recovery after the US Fed decided to keep rates steady last week.
The peso, meanwhile, sank to a seven-year low against the greenback at 48.215 in morning trading. Trading was ongoing as of this post.
At the bond market, the government awarded P20 billion worth of Treasury bills with lower interest rates across-the-board, indicative of investors' flight to safer assets.
Finance Assistant Secretary Paola Alvarez shrugged off recent developments, which came after Duterte criticized the US and the EU for meddling on the government's anti-drug war.
Foreign Affairs Secretary Perfecto Yasay had also sounded defiant on his address to the UN General Assembly, asking nations to let it continue its anti-drug campaign even amid allegations of human rights violations.
"If one were to ignore the political noise generated by certain groups, one could clearly hear the voices of continued optimism over President Duterte’s commitment to bring real change," Alvarez said in a statement, without specifying which groups was she talking about.
Part of this is the four tax reform packages being planned, the first of which was already submitted to the Lower House for scrutiny.
"We put a package where both WB, IMF and many foreign governments said they agree with," he said. Dominguez has met recently with envoys from China, EU and Spain.
Sought for comment, Emilio Neri Jr., lead economist at Bank of the Philippine Islands, said there clearly are some political concerns in the Duterte administration worrying investors.
"The performance in T-bills is consistent since the tendency is really to go to safer assets. If they have issued long-termed (bonds yesterday), it would have been different," Neri said.
"Part of it is really due to political uncertainties. While there is no science to use to clearly gauge how much of it is coming from such, it is fairly clear that part of it is due to politics," he added.