JPMorgan Drops Philippines to Worst ASEAN Investment Confidence as Dictator’s Son Leads Polls

JPMorgan dropped the Philippines to the bottom of an investment preference list of Southeast Asian countries as the son of a late dictator appears to be headed for a landslide win to the nation’s presidency.

The U.S. investment bank did not mention Ferdinand “Bongbong” Marcos Jr. in a report released on Monday, the day of the presidential elections, detailing risks from the country’s high public debt and inflation, the Philippine Daily Inquirer reported Tuesday, citing a report shown by the bank’s clients to media outlets.

“Philippines equities face myriad challenges, including twin deficits, higher inflation, slower government spending in the quarters after the election (transition pain), high public debt, risk of a valuation derating and potential earnings growth disappointment,” JPMorgan said.

In a “new order of preference” in the Association of Southeast Asian Nations (ASEAN), JPMorgan ranked the Philippines behind neighbors Vietnam, Singapore, Thailand, and Malaysia.

JPMorgan warned its investors to reduce exposure to Philippine stocks as it plans to “downgrade the Philippines to underweight.”

The benchmark Philippine Stock Exchange index plunged 3.1% to a nine-month low a day after the May 9 elections. The index was already at a sharp decline weeks ahead of the vote, with foreigners being net sellers.

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