PPPT Philippine Political Plunge Protection Team

The Working Group on Financial Markets, commonly known as the Plunge Protection Team (PPT), created by Ronald Reagan to prevent a repeat of the Wall Street meltdown in October 1987. The PPT is empowered to intervene in stock index futures and the foreign currency markets in the event of a crash.

As established by Executive Order 12631, the Working Group consists of:

The term "Plunge Protection Team" was originally the headline for an article in The Washington Post by staff writer Brett D. Fromson, published on Sunday, February 23, 1997.[2] He did not invent the term. It was added later by a copy desk editor as a sensational nickname for the Working Group.

Locally, we at Finance Manila coin the term PPPT for the Philippine Plunge Protection Team. Being an economist President, Gloria Arroyo is surmised to hold the Peso and PSEi (Philippine Stock Exchange Index) as sacred barometers to defend in case political chaos hits the street, to give the international feeling of political stability.

Speculated tools at her disposal: central bank, GSIS and SSS funds.

Recent political turmoil that saw supposed selling-inspired fear virtually non-existent as if countered by some mysterious buying force:

  • May Labor Day 2001 (index did not plunge aftewards. opened almost unchange, yet went down only about 20 points),
  • February 26 2006 alleged inciting to sedition by Brigadier General Danilo D. Lim and Colonel Ariel Querubin when he announced withdrawal of support while at a camp in Fort Bonifactio (index did not even fall and yet went up)
  • The Oakwood mutiny  July 27, 2003, with then  Army Capt. Gerardo Gambala and Lt. Antonio Trillanes IV of the Philippine Navy (PSEi 45 point drop at the opening, but closed only down 27.  but index continued falling slightly during the 8 trading days that followed)
  • Manila Peninsula Makati Siege.  November 29, 2007, 11:15 a.m. approximately.  Again spearheaded by now Senator Trillanes, with Danilo Lim, and some priests (PSEi had a 100 point climb at the open due to strong Wall Street, but fell and lost all its gains when news broke out.  By the time of closing, it was up 40+)

Sources:

http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
http://www.marketoracle.co.uk/Article1771.html
http://en.wikipedia.org/wiki/2006_state_of_emergency_in_the_Philippines
http://www.financemanila.net

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