Foreign investors are increasingly cutting ties with the Philippine stock market as President Rodrigo Duterte proves himself to be more and more of a loose cannon.
Despite high rates of economic growth, the Philippine Stock Exchange index is down 2.3 percent this quarter, according to Bloomberg. Foreign investors have pulled out more than $333 million in 11 days and have made the Philippines the only Asian market faced with a decline.
Experts believe Duterte's unconventional politics may have had a hand in the declining stock market. Duterte is well-known for his brash manner of speaking and has recently made headlines after insulting President Barack Obama, calling him a "son of a whore."
The two leaders were set to talk about maintaining security on the South China Sea at the ASEAN summit. The Philippines has proven to be a key ally in helping prevent China from forcibly expanding its territory, according to Time magazine. But the relationship became strained when Obama said that he also wanted to talk to Duterte about the country's politics, namely the Philippines' deadly war on drugs that has left 2,400 dead.
Upset, Duterte called Obama "a son of a whore," and White House officials swiftly canceled the meeting between the two. Obama seemed unfazed by the incident, later saying "I don’t take these kinds of things personally."
Although the comments may have not upset Obama, they "didn't sit well" with foreign investors, according to Rafael Palma Gil, portfolio manager for the Philippine Rizal Commercial Banking Group. Bloomberg reports that Duterte's explosive behavior could have serious effects on the country's economy.
“The latest incident raises concern that President Duterte’s unpredictable behavior in politics will be disruptive and could eventually spill into economics and business,” said Jonathan Ravelas, chief market strategist for the Philippines' largest lender, BDO Unibank.
"[This has] further weakened a market that’s already been made vulnerable by uncertainty over U.S. interest rates, elevated valuations and overseas fund withdrawals," he continued.