Recto to Duterte: Strong words can scare investors

MANILA, Philippines – Amid the weakening of the peso, Senate Minority Leader Ralph Recto urged President Rodrigo Duterte to calculate his statements, saying these words have an impact on the economy.

While Recto agreed that the government is not the main reason for the decline of the peso, the senator emphasized the need for the Duterte administration to clarify its position on foreign policy, extrajudicial killings, and the declaration of a state of lawlessness, among others.

"There must be more certainty," Recto told reporters on Tuesday, September 27, referring to government policies.

Duterte has been criticized for his apparent inconsistent statements on national and foreign affairs, especially those involving the United States, the United Nations, China, and Russia. (READ: Senator wants inquiry into Duterte's 'conflicting' foreign policy)

"Calculated lahat. Words do matter. Kailangan maingat (Everything should be calculated. Words do matter. We should be careful)," Recto said.

The peso plunged to a 7-year low against the US dollar, with analysts saying investors are pulling out money from the country partly due to political issues.

The Bangko Sentral ng Pilipinas attributed the continued weakness of the peso to uncertainties brought about by the next action of the US Federal Reserve as well as the strong demand for US dollars.

'Not one or the other'

Recto said Duterte should treat the country's allies well, especially the US, to avoid having a chilling effect on other Western investors. 

Duterte, the senator said, can achieve healthy relations with both China and the US, without antagonizing one of them.

"Kaya nga lumalabas ang pera eh, humihina ang piso. If you treat your allies not well enough like the US, siyempre mababahala 'yung ibang Western investors dito sa'tin. So treat your allies better and improve relations with China. Puwede naman gawin 'yung dalawa. Hindi naman kailangan one or the other," he said.

(That's why money is being pulled out, the peso is weakening. If you treat your allies not well enough like the US, of course other Western investors would be worried. So treat your allies better and improve relations with China. Both can be achieved. It does not mean it has to be one or the other.)

Duterte earlier slammed US President Barack Obama for questioning him on human rights issues.

The President also earlier urged investors worried about his pronouncements to leave the country, saying he would rely on Russia and China instead.

Negative perceptions

While Recto said the depreciation of the peso is also caused by the potential increase of interest rates by the US Fed, it is "exacerbated" by Duterte's remarks, especially on killings.

"You couldn't say it's the major reason. 50-50. One is the US Fed's plan to increase rates. The other, exacerbated in the Philippines because of our pronouncements," he said.

The senator added that a person would not want to go to or invest in a country where there is a reported state of lawlessness or spate of extrajudicial killings – whether true or not.

Duterte's war on drugs has been highlighted abroad, making headlines in major international news outlets such as BBC, Time, The New York Times, and Wall Street Journal, among others.

"Definitely 'di rin nakakatulong. Kung European investor ka, alam mo may ganyan, matatakot ka. Turista ka, nababasa mo sa Time magazine, Wall Street Journal, New York Times na patayan dito, laganap patayan," Recto said.

(Definitely, it's not helping. If you are a European investor, you know there are such things happening, you will be scared. Let's say you are a tourist and you read in Time magazine, Wall Street Journal, New York Times about the killings here, rampant killings.)

"Rightfully or wrongly, ano impression ibibigay sa'yo niyan? Mag-i-invest ka ba? Pupunta ka ba? Magtuturista ka ba?" Recto added.

(Rightfully or wrongly, what impression would that give you? Are you going to invest? Will you visit the Philippines? Will you be a tourist?)

Recto then urged members of the Cabinet to advise the President to watch his words.

"The advisers should speak truth to power. Sabihan naman hinay-hinayan (Tell him to be careful with his words)," the senator said.

Duterte, however, earlier said his mouth would not bring the country down. – Rappler

Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com

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