th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

Does the ’Duterte Factor’ Affect ABS-CBN and GMA Share Prices?

The stock market reacts more strongly to the President’s actions than to companies’ financial performance
By Pauline Macaraeg |



President Rodrigo R. Duterte likes to say he knows little of economic and financial matters though his aides and officials add he is more familiar with the subject than he lets on. What is not a matter for debate is his outsized impact on the stock market.


This became evident recently with Duterte’s contrasting words and actions on the country’s two biggest media companies: ABS-CBN Corp. and GMA Network Inc.


After Duterte signed a law that extended GMA Network’s legislative franchise by another 25 years on April 21, the company’s share price rose by 2.1 percent on April 24, the next trading day. (April 22 and 23 fell on a weekend.)


The company’s share price fell by 3.5 percent the following day after news of the signing of the law came out on April 25, underscoring a famous stock market adage: buy on rumor and sell on news.


On the other hand, when Duterte threatened on April 27 he will block the renewal of ABS-CBN Corp.’s franchise (which ends in 2020), the share price of the country’s biggest media company by revenue fell 3.2 percent the next trading day on May 2 (April 29 and 30 fell on a weekend while April 28 and May 1 were holidays). The company’s share price recovered slightly afterwards but fell steadily again the week after. The President alleged that the network refused to air his ads during the 2016 elections.


In contrast to the big movements in the two broadcast companies’ share prices in reaction to Duterte’s attitude towards their respective legislative franchises, investor reaction to their financial performance seemed more muted.



Related story: ABS-CBN vs GMA: Who's really Winning Viewers and Making Money 



When GMA Network released a report on May 15 that its net income fell 17 percent in the first three months of the year from the same period last year (largely due to the base effects of last year’s pre-election season), the broadcaster’s share price fell only 0.2 percent that same day. It went up by 0.2 percent the following day.


Similarly, when ABS-CBN reported that first-quarter earnings dropped 59 percent (for almost the same reason as GMA Network’s profit decline) on May 19, its share price fell only 0.1 percent that same day and remained unchanged the next trading day, May 22.


The two networks are the main rivals in the Philippine broadcast media industry, accounting for at least 75 percent of the country’s television audience. In the past, they competed mainly for ratings and advertising revenues by coming out with the most compelling content. Now, it seems presidential favor or disfavor has emerged as a big factor, too.







Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg

Latest Articles

What Opportunities are Investors from Other ASEAN Countries Seeing in the Philippines?

A look at the biggest projects registered by Southeast Asian firms with the gov't in the last 6...

byPauline Macaraeg | November 19, 2017 09:00:00

10 Commandments of Successfully Managing a Business Crisis

Commandment number one is beginning preparing before anything has gone wrong

byTor Constantino | November 19, 2017 08:00:00

Help Is on the Way! (for 5 Common Obstacles Every Entrepreneur Faces)

A little creative thinking can solve big problems

byThomas Smale | November 19, 2017 06:00:00

10 Ways You're Being Tracked Without You Knowing It

Everything we do online and with technology leaves a footprint

byNina Zipkin | November 19, 2017 02:00:00

How to Teach Your Daughter Girl Power, According to This Self-Made Billionaire

Teach these lessons to your girls so they can grow up to be strong, confident and happy

byKitty Elicay for | November 19, 2017 00:00:00

How Much Does it Cost to Review for the Bar Exams in the Philippines?

The fees vary but are roughly equivalent to new college graduates’ average starting monthly salary

byElyssa Christine Lopez | November 18, 2017 09:00:00

The 3 Types of People at Work Who Waste Your Time and How to Deal With Them

Do any of these time suckers work at your company? Here's how you can avoid them

byDan S. Kennedy | November 18, 2017 08:00:00

by |

5 Big Mistakes Young Entrepreneurs Just Keep Making

The reality of running a high-growth startup is that the company is your boss

byDeep Patel | November 18, 2017 06:00:00

Entrepreneurs Aren't Risk-Seekers -- They Just Handle Risk Better

Managing risk is in entrepreneurs' DNA

byJohn Suh | November 18, 2017 02:00:00

Billionaires Are Teaching Their Kids Mandarin and You Probably Should, Too

There's a reason Mark Zuckerberg learned Mandarin

byYsa Singson for | November 18, 2017 00:00:00

Hershey Hilado, Homeless Ilongga Turned Aussie Millionaire, Topbills Speakers at Nov. 18 Entrepreneurship Conference

Event in Miriam College Quezon City is part of Global Entrepreneurship Week celebration in the...

byPauline Macaraeg | November 17, 2017 10:00:00