Rodrigo Duterte's brutal drug war sends Philippine peso to seven-year low

Country’s currency tumbles 4% in one month - worst performance of any Asian currency.

(AP)

The Philippine peso slumped to its lowest level in seven years as President Rodrigo Duterte’s hard-line policies and erratic statements further alarmed global markets.

The country’s currency tumbled to 48.245 pesos per dollar - a 4 per cent fall in one month and the worst performance of any Asian currency. The peso now stands at its lowest level since September 2009, following widespread western criticism of Duterte’s brutal crime crackdown.

“(The peso's decline is) mainly due to politics, with the Philippine president’s ongoing war on drug dealers and his intent to seem to alienate all of their major trading partners,” Jeffrey Halley, a market strategist at Oanda Asia Pacific told Bloomberg.

Earlier in the month, Duterte commented that US President Barack Obama was a “son of a whore”, sending the Filipino stock market falling. International investors have pulled $351 million this month, with outflows of cash recorded for the last 23 days straight in a reversal of fortunes for one of the region’s strongest economies.

More than 3,300 people have been killed in Duterte’s war on drugs, many by vigilantes, prompting President Obama to say that

Credit rating agency Standard & Poor’s warned last week that the Philippines’ credit rating may be downgraded if Duterte’s policies endangered democratic institutions.

None of this appears to have prompted Duterte to change tack. Philippines had been one of America’s staunchest Asian allies, but the strongman leader has repeatedly said he will seek to distance the country from its former ally.

Duterte said the Philippines had reached the “point of no return” in its relations with its former colonial ruler, and accused Washington of “hypocrisy” and “lording it over” its former colony.

“I am about to cross the Rubicon between me and the US,” he said, apparently referring to his plans to strengthen ties with its two major global political rivals, Russia and China.

“I am ready to not really break [US] ties but we will open alliances with China and... Medvedev, he is awaiting there for my visit,” Duterte told reporters, adding he would open up the “other side of the ideological barrier.

Finance Department spokesperson Paola Alvarez dismissed concern over Duterte’s policies. “If one were to ignore the political noise generated by certain groups, one could clearly hear the voices of continued optimism over President Duterte’s commitment to bring real change through the implementation of transformative reforms not only in the economy but on the peace and order front as well,” he said.

“Confidence remains high on the capability of the Duterte administration to deliver on its commitment of inclusive growth.”

Last week, Duterte launched an expletive laden attack on the EU after it called on the Filipino authorities to launch an immediate investigation into the rising death toll in the country.

President Duterte said he responded with the words “f**k you” before accusing the EU of hypocrisy, asking: “How many have they killed?”

Duterte also called UN Secretary General Ban Ki-Moon, earlier this month.

In his final campaign rally before being elected President, Mr Duterte vowed that 100,000 criminals would be killed.

“Forget the laws on human rights,” he said. “If I make it to the presidential palace, I will do just what I did as mayor. You drug pushers, hold-up men and do-nothings, you better go out. Because I'd kill you.

“I'll dump all of you into Manila Bay, and fatten all the fish there,” he said.