Asia Private Equity-Venture Capital Summit: Singapore, Sept 30, 2016. Photo: ASIA LAW PORTAL
Mark Mobius still likes Philippine investments despite extrajudicial murders
· Mark Mobius : on War on Drugs and Killing of Drug addicts and pushers "at the end of the day, I think the impact of the improved law and order will be positive."
· "I think the drop in the peso may have been connected to the slowdown in remittances because with the economic situation in the Middle East and in Europe, the U.S., remittances have not been as high as they were," Mobius said.
Despite growing concerns over the extrajudicial murders in the Philippines, the country will likely emerge as an improved investment destination, Mark Mobius said on Friday.
"Of course, it's a tragedy that anybody gets killed, but in the context of what's happened in the Philippines in the past and the commitment to law and order, I'm not too worried about it," the storied emerging markets investment cheerleader said on the sidelines of the Asia Private Equity and Venture Capital Summit in Singapore.
Mobius, who joined Franklin Templeton in 1987 to lead the Templeton Emerging Markets Fund, is currently the executive chairman at Templeton Emerging Markets Group.
The new Philippine President Rodrigo Duterte's "law-and-order" agenda has been blamed for a surge in extra-judicial killings. More than 3,800 people have been killed in Duterte's crackdown on drugs since the June 30 inauguration, Reuters reported last week.
The parliament has also been told of murders allegedly ordered by the Philippine president during his tenure as mayor of Davao city. Duterte has denied the allegations, but has also made comments indicating he condoned both those murders and ones since he took the country's top office.
In remarks that Mobius was likely unaware of, Duterte on Friday likened himself to Nazi leader Adolf Hitler in a complimentary manner and said he would "be happy to slaughter" three million drug users and peddlers in his country, Reuters reported. Mobius didn't immediately respond to an emailed request for comment on whether the remarks change his views.
But Mobius was unconcerned about the investment climate in the country.
"The concern about the illicit killings is a minor issue. The big issue is how they implement true law and order and the degree to which Duterte is able to do that," Mobius said in his remarks at the conference.
Mobius did cite some concerns about how Duterte's "brash" remarks may affect foreign perceptions of the country.
The firebrand Duterte, who's style has often been compared with U.S. Republican presidential candidate Donald Trump, has sparked concerns in markets due to his erratic outbursts, which have included threatening China with a "bloody" confrontation over disputes in the South China Sea.
Earlier this month, Barack Obama cancelled a meeting with Duterte after Duterte used a derogatory term to describe the U.S. president.
"Of course [Duterte's behaviour] affects foreign relations. It affects foreign investors because they get concerned and you have the corporate governance concerns and so forth," Mobius said. "But at the end of the day, I think the impact of the improved law and order will be positive."
Mobius also didn't believe the Philippine currency's swoon since Obama cancelled his meeting with Duterte was entirely due to concerns about the president's temperament.
The U.S. dollar was fetching as much as ₱48.48 Philippine pesos on Friday around midday Asia time, , the highest for the pair since the depths of the global financial crisis in 2009, compared with around ₱46.40 pesos before the cancelled meeting.
"I think the drop in the peso may have been connected to the slowdown in remittances because with the economic situation in the Middle East and in Europe, the U.S., remittances have not been as high as they were," Mobius said.
Scene of the Crime Operatives (SOCO) work at the scene where two suspects were shot dead following an encounter and shootout with police at a checkpoint along a highway in Manila on August 28, 2016. Photo: Noel Celis | AFP | Getty Images
Earlier this month, Philippine media reported that in July, overseas Filipinos sent 5.4 percent less cash home than in the year-earlier month, but there's still been a 3 percent on-year rise for the first seven months of the year.
But apart from the immediate political situation, Mobius also pointed to a broader, longer-term transformation in the Philippines, led by its overseas workers
"The diaspora around the world, living in the Middle East, living all over the place…is not only sending back money, they're sending back know-how and technology," he said.
Many of those workers were returning to the country and taking up business leadership roles, he said. - CNBC
