Veteran emerging markets fund manager Mark Mobius has thrown his full support behind Philippines President Rodrigo Duterte, despite the president's controversial style of governance.

Mobius, executive chairman of Templeton Emerging Markets Group, told AsianInvestor he hasn't changed his positive views on the Philippines, and said his company remains overweight on the country.

"We all knew that President Duterte is a direct speaking person and there will be concerns from time to time regarding what he says," Mobius said.

"However, his stance on crime is very much applauded by the Philippine population generally, although there is some criticism. To the degree that he is able to strengthen the rule of law in the Philippines, investors, both local and foreign, will pour more money into the country," he noted.

Mobius shared his comments via email after AsianInvestor published the article Why fund managers are ignoring Duterte's belligerence yesterday.

As of July 2016, the Templeton Asean Fund was overweight Philippines at 14.32% relative to 11.27% of the MSCI Southeast Asia Index, its benchmarch

Staying the course

The 71 year-old Duterte has been criticised for offending dignitaries included Pope Francis and US President Barack Obama, and his campaign against drug traffickers has been linked with the extrajudicial killings. All-told, over 2,500 people are believed to have died in Duterte's war against drugs. 

Mobius said Franklin Templeton considers the potential impact of social or political issues on investments as part of its investing process.

"Our research will always look at this in the context of individual investments and from the macro point of view only if it impacts those individual investments," he said. 

"We could have a situation where the government of a country has a poor record on social responsibility but the company in which we invest is exceptionally good in that regard. In such cases we should not reject that specific investment just because they are working in a poor government environment," he explained.

In the case of the Philippines, Mobius said: "I don’t think there will be a change in outlook as a result of the new leadership."

"There are many factors to consider but probably the most important are economic growth; wealth distribution with a larger share of the general population benefitting from the economic growth; and an effective programme to accelerate infrastructure investment with good planning and the elimination of corruption."

The Philippines' economy grew by an annualised 7% in the second quarter of this year, the fastest growth registered by any economy in Asia.