Thursday’s global selloff over concerns the U.S. will retreat from its massive asset repurchasing program hit the Philippines stock market hard, sending its PSEi index down 442.6 points, or 6.75 percent, to 6,114.08, nearly erasing all the gains made this year.  

"This came a bit sudden; the market was caught with a left hook,” Jonathan Ravelas, market strategist at BDO Unibank Inc., told Philippines news service GMA.

Investors have been flooding into emerging markets over the past few years, seeking out hot money gains on better yields in markets such as the Philippines and Thailand.

Meanwhile, the Bangko Sentral ng Pilipinas, the country’s central bank, is considering weakening the currency in order to spur exports and jobs growth. Philippines export receipts dropped precipitously in April, by 12.8 percent year-over-year, compared to a 0.1 percent decline in March. Meanwhile, unemployment ticked up to 7.5 percent in April; last April that figure was 6.9 percent.

The problems in the Phillippines are symptomatic of what’s happening in the across Association of Southeast Asian Nations member states. Indonesia, Southeast Asia’s largest economy, reported a trade deficit in April as exports contracted for 13 consecutive months. Malaysia’s trade surplus fell to levels unseen since the 1997 regional crash sent ripples into global markets.

On Thursday, Indonesia’s central bank raised its benchmark rate by 25 basis points to 6 percent to stave off inflationary concerns. "Pressure on the rupiah was associated with the repositioning of financial assets from emerging markets in line with the possibility of monetary policy adjustments by the Fed and negative sentiment towards domestic fiscal and current account deficits," Bank Indonesia said.