BONIFACIO GLOBAL CITY, Taguig City — Amidst speculations that local trade could be a bigger worry as a result of former President Rodrigo 'Rody' Duterte (FPRRD)'s recent arrest, analysts say that it may not directly affect stocks and bonds but with investors becoming more cautious about global trade uncertainties.

However, investors have been spooked by possible 'political instability' following Duterte’s arrest sent the Philippine stock market's main index to tumble down by 2 percent, erasing its recent gains. The benchmark Philippine Stock Exchange Index (PSEi) suffered from a sell-off and fell by 2.42 percent, or 154.22 points, to close at 6,206.55.

Still, China Bank Capital Corporation managing director Juan Paolo Colet noted that major investors don’t seem too concerned about Duterte’s arrest by the International Criminal Court and his transfer to The Hague, Netherlands.

“Naturally, they will observe how the situation evolves, but their primary focus is on (United States President Donald) Trump, the Fed (Federal Reserve) and US markets,” Colet asserted in a text message.

While Duterte’s arrest may have had a hand in the market’s decline, Philstocks Financial Incorporated (PFI) research head Japhet Tantiangco cited that Trump’s tariff policies were still the main culprit.

“Investors also digested the US 25-percent tariffs on steel and aluminum imports, which had already taken effect and the ensuing retaliation from the European Union,” Tantiangco noted.

As for the bond market, Philippine Dealing and Exchange Corporation (PDEx) president and chief-executive-officer Antonino Nakpil sees domestic investors remaining largely unaffected by local politics.

“Our domestic investors remain hungry … people are looking for yield,” Nakpil disclosed even as PDEx has seen ₱65.7 billion worth of domestic bond listings from five issuances this year and with forecasts hinting on optimistic gains that could hit P600 billion in local bond listings this year, surpassing ₱508.66 billion in 2022.
Meanwhile, GlobalSource country analyst Diwa Guinigundo said Mr. Duterte’s arrest on crimes against humanity may affect financial markets in the short term, adding that despite the disturbance, "over time, people will realize that something can be done here in the Philippines (and) we don’t tolerate this kind of offenses.”

PhilStocks Financial research manager Japhet Tantiangco enthused that "for now, we don’t see former president Rodrigo Duterte’s arrest having an impact on the market since it has no significant effects seen on the economy and its outlook.”

Tantiangco rationalized that market issues could arise if there will be prolonged and escalated political turmoil.

For his part, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort insisted that local stock market’s movement was “largely (due to) external factors, especially US stock markets at new six-month lows recently amid uncertainties related to Trump’s tariff threats.”

Ricafort explained that the “relatively orderly process” of Duterte’s arrest “could send positive signals on respect for the law, authorities and institutions locally and internationally.”

“There could be risk of political noises locally, but still wait-and-see in the coming days/weeks, though that could remain as noise for as long as there are no large protest rallies and no other forms of destabilization,” he concluded.