President Estrada swore in Lilia Bautista yesterday as the new head of the Securities and Exchange Commission. She replaces the controversial Perfecto Yasay Jr., who resigned from the post effective yesterday.
Mr. Estrada said Bautista is highly qualified for the job, being a respected and intelligent lawyer.
"I am confident that she will make positive changes in the stock market because she also has the support and approval of the business community," the President said.
"Potentially, she has the power to clean up the market and make a difference," said ING Baring Securities research head Xen Gladstone of the new SEC chief, a former trade undersecretary.
In an interview after taking the oath, Bautista said she is going to serve the unexpired term of Yasay.
Mr. Estrada had clashed with Yasay starting in January, when the latter claimed the President pressured him to clear a friend in the SEC's probe of Best World Resources Corp. -- the firm at the center of the country's biggest stock market scandal.
Mr. Estrada vigorously denied the charges, branding Yasay a "liar."
Since then, the two have been locked in a public war of words that has shaken the market and caused many foreign and local investors to keep a distance.
Some traders believe Mr. Estrada's dislike for Yasay is so intense he requested government pension funds and other state institutions to aggressively buy up local blue chips last Thursday to make it look as if investors welcomed Yasay's resignation.
Mr. Estrada has been trying to get Yasay, an appointee of former President Fidel Ramos, out of office since the start of his presidency 21 months ago.
Yasay's seven-year term officially ends in 2003, but he left ahead of a new law that will allow the President to appoint new commissioners.
Analysts said Yasay has done much to strengthen the local stock market by improving disclosure rules, tightening supervision and combining the Manila and Makati bourses.
However, the market has taken a generally poor view of his handling of the BW crisis, particularly when he nearly closed the stock market earlier this month after the resignation of the PSE's surveillance unit, which claimed its report into BW was being whitewashed by the exchange.
Inconsistencies have also emerged in statements Yasay made about BW, most notably when he toned down his claim of presidential interference in the SEC's probe.
Yasay leaves office with the BW case unresolved and a potential for more damage to the stock market, which has fallen 22 percent this year.
Mr. Estrada said earlier Yasay's departure should lift market sentiments.
"We are after regaining the confidence of investors and I believe that by the time he steps down, investor confidence will have been regained," he said in a television show last Tuesday.
But analysts believe Yasay's resignation will not be enough.
"The country's image is still not good... the risk factors are still growing," said Wise Securities Philippines Inc. research head Jose Vistan.
Bautista finished her law degree at the University of the Philippines, and obtained her master's degree in corporation law at the University of Michigan.
She also once served as the country's ambassador to the United Nations in Geneva and represented the Philippines at the World Trade Organization. -- With AP report