Duterte effect repels foreign investors

Dubai - As stocks declined while investors pulled money from Philippines's assets amid concerns about President Rodrigo Duterte's policies, peso tumbled 0.5 per cent to 48.245 per dollar in Manila, according to money remittance companies.

The Philippine peso sank to a seven-year low on Monday offering the 600,000 strong Filipino community in the UAE an attractive remittance rate of 13.16 per dirham.
As stocks declined while investors pulled money from Philippines's assets amid concerns about President Rodrigo Duterte's policies, peso tumbled 0.5 per cent to 48.245 per dollar in Manila, according to money remittance companies.
"For Filipinos in the UAE, who annually send to their home country between $3 and $4 billion every year, the plunge of the peso is a windfall. With the monthly salary time well nigh, we expect a big rush from Filipinos at the remittance counters," leading exchange houses said.
Sudhir Kumar Shetty, president of UAE Exchange, said peso's decline to a seven-year low would have a positive impact on the remittances to the Philippines, which is the world's third largest remittance recipient after India and China. "In the coming days the remittances to Philippines are expected to rise significantly." In 2015, overseas Filipino workers sent to their home country around $28 billion, of which one-third, or roughly around $9 billion, was from the GCC, where a large concentration of Filipinos work.
Shetty said the political situation in the Philippines was a major factor for the peso's fall, which had been slowly weakening since touching an all-time high of 11.5 against the dirham in 2012-13 after recovering from a record low of 13.3 in 2007-08.
In July, peso started to weaken by hitting 12.7 against the UAE currency, and 10 days ago, it touched 12.9 and on Monday hit 13.16.
Sudhesh Giriyan, COO of Xpress Money, said as of Monday, the peso has fallen to 13.16 against the dirham, the lowest it has ever been in the last seven years. "The uncertainty about the US Fed's next policy action may well be the cause of the weakening peso as in the case with other regional currencies. Additionally, other external factors like economic developments in China, the European Union and Japan and expectations of a lower current account surplus are intensifying the peso's weakness."
Giriyan said in the past couple of years, the peso has depreciated over 15 per cent, and has reached its weakest point in 2016. "There are chances that the peso could cross the 14-mark within this year. However, one has to wait and watch to what levels will the peso further depreciates to."
He said with this windfall and salaries being dispersed this week, it is a good time for OFW's to send money as they will get more money in pesos back home for each dirham that they send.
issacjohn@khaleejtimes.com