Duterte Makes Peace With Philippine Elite; Stock Index Jumps

(Bloomberg) -- Philippine President Rodrigo Duterte has offered an olive branch to tycoons he attacked months ago, thanking them now for helping government in its virus response. The nation's main stock index jumped.

Duterte said he's now willing to talk with the family of Jaime Augusto Zobel who controls Ayala Corp. and tycoon Manuel Pangilinan who oversees Metro Pacific Investments Corp. after threatening to sue and arrest them as recently as March for water contracts the president alleged were disadvantageous to the state.

“With the kind of response that you gave, it's a humbling experience also for me,” Duterte said in a televised address late Monday, referring to their contributions to fight the pandemic. “I apologize for the hurting words.”

Duterte Takes On Philippine Elite and Ends Up Even More Popular

Ayala advanced 15%, chalking its biggest closing gain in more than 12 years, while unit Manila Water Co. Inc. surged by 12%, the most since Jan. 30. Metro Pacific climbed 14%, its steepest advance in more than 10 years, while its water venture partner DMCI Holdings Inc. rose 1.9%. The Philippines' benchmark stock index rose 1.8%, leading gains in Asia.

Key Insights

The Philippine leader last year stepped up his attacks on elites and sought a probe on deals with big businesses, causing stocks to fall due to concerns of regulatory risk.
Duterte's issues with the water providers remain, although he's more open to settle with them, his spokesman Harry Roque said at a televised briefing Tuesday.
“We have always believed in building a strong partnership between the private and public sectors in addressing our country's problems and in investing in the country,” Zobel and his brother Fernando said in a statement.
Pangilinan, who is also chairman and president of PLDT Inc., in a Twitter post thanked Duterte and assured him of his group's commitment to be a partner of government amid the pandemic.