Philippine crisis makes markets nervous

Ulhas Joglekar ulhasj at
Fri Jan 19 08:38:05 MST 2001

19 January 2001

Philippine crisis makes markets nervous
MANILA, Philippines: Business leaders and traders loathe uncertainty, and
recent chaotic twists in the Philippine political crisis have confronted
them with more than many had imagined possible.
With speculation swirling Thursday about a popular uprising or military coup
ousting President Joseph Estrada, markets have taken a beating. Executives
in their pressed suits are showing an uncharacteristic radical streak as
they clamour for his departure.
Corporations have provided food to fuel anti-Estrada rallies. Traders have
put "Estrada resign" signs on computer terminals and staged their own
protests. Some displayed thumbs-down gestures for Estrada on Thursday, while
others clanged empty cola cans together inside the stock exchange after
shares closed with a 1.4 percent decline.
"They're radical in defence of their own interests," said Simon Flint, a
currency strategist who follows the Philippines for Bank of America in
Singapore. "They don't want change as such. These people just want a better
economic environment so they can make more money."
Flint said Thursday he doesn't believe the opposition will be able to remove
Estrada from office after impeachment prosecutors resigned to protest a
decision to exclude potentially explosive bank records in the president's
corruption trial.
Flint believes the military will stay out of the fray and suggested business
leaders may need at some point to consider rebuilding their bridges to
Estrada's administration through some figures who appear sensible, such as
Finance Secretary Jose Pardo.
"Why can't they reach an accommodation?" Flint asked Thursday.
Maybe Big Business doesn't want to.
"I don't believe there will be any reconciliation with the president, except
for the people who are with him now and need favours to stay in business,"
said Guillermo Luz, executive director of the Makati Business Club, an
influential group of the capital's top business leaders.
Luz said few Filipinos want to see the military get involved, but he added
that Estrada has lost the ability to command support.
"Our constitution calls on the military to protect the people," Luz said.
"They must be asking themselves some questions about how this can be
happening under our constitution and people are getting away with it.
"There seems to be a justified case for people, not just the military but
people in government, withdrawing their services from the president. We
don't understand how any of the Cabinet secretaries can continue to be an
accessory to this problem."
The fall by Philippine shares on Thursday followed a 6 percent plunge a day
earlier. The peso closed Thursday at 54.790 to the U.S. dollar, compared
with Wednesday's close of 54.625 - continuing a dive that stirs enormous
concerns among ordinary Filipinos who closely watch the rate.
Top government economic officials acknowledged Thursday they have been under
pressure to leave Estrada behind, a day after the president of the
Philippine Deposit Insurance Corp., Norberto Nazareno, quit his post running
the bank insurance agency. On Thursday, the deputy director general for
economic socio-planning, Ruperto Alonso, said he was giving up his position,
which involved a key role in implementing the president's economic agenda.
Economic planning secretary Felipe Medalla said quitting now is out of the
"Ironically, I cannot resign," Medalla told reporters Thursday. "It would be
irresponsible to resign during this testy period."
National Treasurer Leonor Briones agreed, saying she would be derelict in
her duty if she left now.
"I cannot - since it is entrusted to me - allow it to be damaged," she said.
"I cannot risk the market reacting."
Local business consultant Michael Alan Hamlin believes Estrada is finished
and has no realistic alternative beyond resignation - with the main question
being when and how.
"Government is already in a state of paralysis," Hamlin said. "Its capacity
to fulfil its obligations is almost completely compromised due to the
insistence of a fatally wounded president to stay in power." (AP)
 For reprint rights:Times Syndication Service

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