Graft confessions sink Phl assets

Philippine markets suffered a punishing September as stocks, bonds and the peso logged Asia’s worst performance amid escalating political turmoil and instability. Investor confidence eroded after a widening corruption probe into overpriced flood-control projects sparked the largest street protests in decades, sending shockwaves through the country’s financial assets.

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The peso slumped by 1.8 percent against the US dollar in September, touching a seven-week low of 58.43 per dollar on Sept. 26.

The currency ranked as Asia’s worst performer for the month as investigations revealed billions of pesos in misappropriated funds.

The benchmark PSE Index plunged by 3.3 percent in September, closing at 5,905.35 — its lowest level since April. The selloff left Philippine stocks dramatically underperforming behind regional counterparts which gained an average 3.1 percent for the month. Measured in dollar terms, the damage was even more severe: a five percent decline for the PSE Index versus a 6.2 percent gain for the MSCI Asia ex-Japan index, creating an 11.2 percentage point gap that highlights the deep divergence from broader Asian equities. The de-rating reflects the growing risk premium investors are demanding for Philippine exposure.

Key findings showed that out of P545 billion in flood control spending since 2022, thousands of projects were either substandard, poorly documented or nonexistent. Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. admitted, “We knew there was corruption...but not on this scale.” His reference to the piles of cash on a billiard table and the scope of the alleged malfeasance signals institutional concern that has rattled investors.