Business climate not affected: RP

Business climate not affected: RP

Oliver Teves, Associated Press, Manila, Philippines

A key member of President Gloria Macapagal Arroyo's economic management team expressed confidence on Tuesday that the business climate won't be affected by scandals rocking her administration.

Finance Secretary Cesar Purisima said investors and traders will "see through the noise" created by allegations that Arroyo's family took illegal gambling payoffs and that she rigged last year's election.

"Business is about the economy, less about politics," Purisima said. "I think what we need to focus on is on the fundamentals of business in the country."

Philippine shares rebounded on Friday after tumbling more than 7 percent earlier last week amid worries about the scandals. The benchmark 30-company Philippine Stock Exchange Index rose another 1 percent on Tuesday to 1955.79 after the market was closed on Monday for a holiday.

Last week, a witness in a Senate investigation into an illegal numbers game claimed she personally handed payoffs to Arroyo's son and a brother-in-law. The men, both members of Congress, have denied the allegation.

Later, a former deputy of the justice department's investigation agency claimed he obtained a tape of a wiretapped conversation between Arroyo and an election official about rigging the May 2004 vote. Officials said the tape was altered.

The allegations followed the lowest approval ratings for a Philippine president since late dictator Ferdinand Marcos and fresh rumors of a coup plot.

Purisima, spokesman for Arroyo's economic team, told the Foreign Correspondents Association of the Philippines that last week's drop in the value of the peso was only a reflection of the country's floating rate policy and that he was confident the market "is smart enough to look at the fundamentals."

He cited the rise in the Philippines' gross international reserves beyond the US$17 billion mark for the first time in two years, growth in exports, increased investment in the service industry, expansion of tourism, a declining deficit, and the target of balancing the budget before 2010, when Arroyo's term ends.

Purisima also said he plans to update investors on fiscal and economic developments during an upcoming roadshow in Europe and the United States.

"We are going to show them a balanced picture. My goal is to allow them to see through the noise," he said. "The way I view the ongoing political discussions is that it just is a very good evidence of a vibrant democracy in the Philippines."