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Last Updated: Monday, 28 July, 2003, 09:03 GMT 10:03 UK
Philippines shares fall after mutiny
Government troops standing guard after the mutiny ends
The coup's swift end blunted the worst of the market falls
The financial markets in the Philippines have taken a battering on fears of renewed instability following the weekend's short-lived army mutiny.

But the relatively quick and bloodless resolution to the crisis meant the worst of the slide was moderated, although traders said nervousness remained.

Early on Monday, shares on the Philippines stock exchange slid 4%, while the peso - the country's currency - dropped 1.1% against the dollar and dealers dumped government debt.

The catalyst was the 19-hour standoff in a shopping mall in the Makati district of Manila by about 300 soldiers, accusing President Gloria Arroyo of corruption just 24 hours before she was due to give the annual State of the Union speech.

There's a stigma once again and a reminder to people that this type of military action is possible... it's a scary lot
Guillermo Luz
Makati Business Club
They were also demanding the release of former president Joseph Estrada, who is himself being held facing corruption charges.

But after negotiations, the troops agreed to return to barracks.


The flinch reaction to the mutiny in early trading, observers said, was partly due to memories of a 1989 coup attempt which saw soldiers take over the same area in Manila's financial heartland for a week.

More than 50 people died, and the aftermath set the economy back years, experts believe.

Insurgency elsewhere in the myriad islands which make up the Philippines only accentuated the concerns.

"It's a very negative signal we're sending to foreign investors," said Spencer Yap, assistant vice-president at BPI Securities.

Philippines Stock Exchange
The Stock Exchange tumbled in early trading
And other observers noted that the attempt could knock growth to even lower than the bottom end of the government's 4.2%-5.2% prediction for 2003.

But some took heart from the relatively swift buyback, which saw the share deficit moderate to 2.1% by the end of the trading day.

"Yesterday, we were relieved that the immediate crisis was resolved via negotiations and without bloodshed," said Guillermo Luz, executive director of the elite Makati Business Club.

"But there's going to be a negative impact.

"We feel among other things (that) the Philippines' reputation has been damaged. There's a stigma once again and a reminder to people that this type of military action is possible within the Philippines and it's a scary lot."

Arrest over Manila mutiny
28 Jul 03  |  Asia-Pacific
Philippines growth stalls
29 May 03  |  Business
Analysis: Arroyo's loss of appeal
30 Dec 02  |  Asia-Pacific
Country profile: The Philippines
09 Jul 03  |  Country profiles
Timeline: The Philippines
18 Jul 03  |  Country profiles

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