The United Nations is catching up with Philippines President Rodrigo Duterte’s human rights record, asking the country’s judicial authorities to launch an investigation.

That’s bad news for President Duterte and for financial markets, which have been crushed following his flip-flops on South China Sea disputes. 

iShares Philippines is down 20.74 percent since last July; iShares for Vietnam, which which has also been involved in the dispute, have lost close to 15 percent of their value.


3-Month Performance

6-Month Performance

iShares MSCI Philippines (EPHE)



iShares MSCI Emerging Markets (EEM)



Market Vectors Vietnam ETF (VNM)



Source: 12/21/2016

Obviously, investors are concerned about the rising economic and political risks of the country, and the prospects for the on-going economic integration of the region into the global economy — most notably China, which needs a market frontier for its manufacturing products.

Actually, the international institutions have been very fair with Philippines. For example, last July the nation won an international arbitration ruling, which found that China has no historic title over the waters of the South China Sea.

That was a big victory for both the US and Philippines, its close ally, which had filed the arbitration case.

But Philippines President Rodrigo Duterte didnt capitalize on the ruling by having China compensate his country for the damage already done. Instead, he decided to side with China on the dispute, and seek a “divorce” from the US! 

Apparently, President Duterte thought that his country is better off appeasing rather than confronting China.

Now, the UN has caught up with his human rights record. And hes going to need China, an influential UN member, to come to his rescue.

Will Beijing do it?

Its hard to say. So far theres no official response from Beijing on the issue. In the meantime, investors in Philippines equities must keep a wary eye on Mr. Dutertes next flip-flop. It may bring more losses.

Finally, take note of this photo image taken from Business Mirror on the actual figures of the Philippines, the portion below shows how our GDP is performing and shows how our economy is growing in comparison to other ASEAN regions inspite of the negative sentiment of foreign investors, although i beg to disagree with what Business World mentions that factory growth has slown down as that is not my company is experiencing based on both foreign and local firms we are servicing.  Red tapes had been cut, in fact the fastest it has been despite the recent change in government administration ( the norm is a wait a see and the typical big C which takes place whenever a new administration takes over, not in this administration ) !!!