Recto cautions Duterte on peso, investment matters: 'Words matter'

Senate Minority Leader Ralph Recto on Tuesday said “words matter” as he cautioned on President Rodrigo Duterte’s pronouncements on foreign relations affecting the peso against the dollar. 

In an interview with reporters, Recto said there must be “certainty in policy in foreign relations,” including treating the Philippines’ allies “well enough.”  

“If you treat your allies not well enough like the US, siyempre mababahala ‘yung ibang Western investors dito sa’tin,” Recto said. 

“So treat your allies better and improve relations with China. Pwede naman gawin ‘yung dalawa. Hindi naman kailangan one or the other,” the senator added. 

The peso plunged to a seven-year low against the dollar, with some analysts saying investors were concerned about sociopolitical issues in the Philippines.

Duterte had earlier said he didn't think his tough talk was the problem, even as he dared investors to get out since he was ready to make deals with China and Russia.

The president had earlier made controversial statements against the US, including his desire to remove American troops in Mindanao, stopping joint patrols with the US in the disputed South China Sea, and more recently, saying that he was about “to cross the Rubicon” with the US. 

Duterte has repeatedly said however that he was not cutting ties with the Philippines’ allies. 

Killings matter too

Recto said the chief executive’s statements should be “calculated.” 

“Calculated dapat. Words do matter kaya kailangan mag-ingat,” he said.

Another factor for the weakening peso, Recto said, is the alleged extrajudicial killings committed amid the Duterte administration’s war on drugs. 

He said it wasn’t helping that international news agencies were putting the spotlight on drug-related killings in the Philippines.

“Kung European investor ka or turista ka, nababasa mo sa Time magazine or Wall Street Journal or sa New York Times halimbawa na patayan dito, laganap ang patayan -- rightfully or wrongfully -- ano impression ibigay sa inyo nyan? Magiinvest ka ba?” Recto said. 

No single reason

For Senators Panfilo Lacson and Franklin Drilon, however, there is no single reason as to why the peso is declining. 

“Of course meron siguro ibang factors... Pero talagang malaking factor lumalakas ang US dollar,” Lacson said adding that there has yet to be factual information indicating that foreign investors are leaving the country. 

“There is no exact science to this. Whether or not such statements affect our exchange rate, our rating, I do not know. But certainly, they say that political risk is a factor,” Drilon said. 

The Philippine peso slightly appreciated against the greenback on Tuesday, snapping a two-day downtrend but still trading at a seven-year low.

Though the peso appreciated, it is still at its weakest since September 16, 2009, when it closed at P48.050:$1 at the height of the global financial crisis. 

Budget Secretary Benjamin Diokno said the peso plumbed to a seven-year low as a result of the impending increase in interest rates in the US, and not because of Duterte's controversial statements. 

"The depreciation of [the] peso, as far as I'm concerned, is no cause for concern," Diokno said. —JST, GMA News