Philippine market slides on 'coup' rumors

Arroyo's government has accused the opposition of being behind the 'lies'

MANILA, Philippines (CNN) -- Rumors of a coup attempt against Philippine President Gloria Macapagal Arroyo are being blamed for sending the country's already flagging stock market to a 10 year low.

The government was quick to try and stamp out the speculation, blaming the opposition for spreading "lies" that were only damaging to Philippine interests.

Nonetheless the stock index dropped past its support of level of 980 points, to close Wednesday at 979.34.

The market has already lost 34.47 percent from end-2000 levels, making it one of the worst performing markets in the region so far this year.

But market analysts would not single-out the coup rumor as the only factor for dragging the market down.

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"It merely compounded the problems that have been hounding the country," said Jose Vistan of AB Capital & Investment Corp.

"There already is a negative sentiment. The buyers are really just reacting given the uncertainties today.

Vistan said constant political bickering between the government and the opposition, as well as corruption charges leveled against the president's husband are key factor helping to dampen investor confidence.

Added to that is the on-going battle in Afghanistan, which is hurting not only the Philippines, but also most markets across the region.

He noted that poor prospects for the country's import and export figures, as well as poor third quarter earnings results in the month, were expected to sour market sentiment all the more.

Government allays fear

On Wednesday, the Philippine government wasted little time to dismiss talks of another coup attempt.

In a statement, Presidential spokesperson Roberto Tiglao denied the existence of a coup plot, supposedly dubbed "Black October," saying that President Gloria Macapagal Arroyo still holds the support of the people and the military.

"In this day and age, and especially against an administration that has the support of the people and all institutions including the military, no coup plot could ever get beyond the talking stage," Tigalo said.

The government also appealed to the opposition to stop concocting and spreading "lies," saying they were detrimental to the country's economy.

"Our country needs these coup rumors like we need a hole in the head."

"The only possible audience of the opposition's coup-concoctions unfortunately are foreign and local investors. The opposition and its coup-rumors are only endangering the jobs of Filipinos," Tigalo stressed.

Earlier the opposition camp of deposed leader Joseph Estrada accused the Philippine National Police, of plotting to overthrow the administration in a bid to resuscitate support for President Arroyo.

The opposition added that the latest coup plot was also meant to divert the people's attention from a corruption case against the president's husband, Mike Arroyo.

"Nothing could be more preposterous," Tigalo said.

"The opposition is insulting Filipinos' intelligence. This administration has struggled to restore political stability these past 10 months, despite attempts by the violence-prone sector of the opposition to throw our country into chaos.

"Why should we be undertaking, as the opposition spokesman claims, 'destabilization attempts'?" he said.

Talks of coup attempts have been a persistent problem for almost all Philippine administrations, where military-backed uprisings have been a popular method of ousting undesirable presidents.