Speed up the BW probe

The market hit another 15-month low yesterday, plummeting nearly 79 points as foreign investors continued to flee. Traders agreed that the continuing scandal over Best World Resources Corp. triggered the flight. Last Monday, as officials of the Philippine Stock Exchange faced the Senate, several lawmakers wondered why the PSE's report on insider trading and stock manipulation involving BW seemed to have left out certain heavy traders.

Market jitters pulled down the peso as well. But in Mindanao, President Estrada put on a brave face, expressing confidence that the plunge is just a blip in normal trading and that the market will recover. PSE president Jose Luis Yulo also downplayed the investors' flight, pointing out that the market performed worse in September 1998. Presidential Spokesman Fernando Barican blamed external factors for the plunge, including the "weakening" of Asian currencies and concerns over US interest rates. He also pointed out that other stock markets in Asia weakened yesterday.

Even Barican, however, conceded that the Best World scandal contributed to the market's fall. And no one has to tell him that the Philippine bourse has been the worst performer in the region for over a year now. In downplaying the market's plunge yesterday, the President said the country didn't need speculative money anyway. He has to admit, however, that the flight even of "hot" money projects instability and loss of confidence in the market, which discourages long-term investments. Some analysts also noted that the market's fall is more worrisome than the disaster in 1997 at the start of Asia's financial crisis, because this time the country's economic fundamentals are fine.

This problem isn't going to vanish with an overly optimistic presidential pronouncement. It will require drastic reforms in the stock exchange and the Securities and Exchange Commission. It needs a change in the mindset of government officials and corporate executives. And it needs a speedy probe of the BW scandal. How long is this investigation going to take? Several sectors believe that the PSE's report is at best incomplete. If this admi-nistration wants to save the stock market, it must finish the BW probe as soon as possible, come up with credible findings and punish the guilty.