SINGAPORE – Top economic officials of President Rodrigo Duterte of the Philippines highlighted income opportunities in and strengths of the Philippine economy before a wide range of investors in their first international roadshow held Tuesday in this city state.
Philippines’ Finance Secretary Carlos Dominguez III, Socioeconomic Planning Secretary Ernesto Pernia, and Budget Secretary Benjamin Diokno, together with Bangko Sentral ng Pilipinas Governor Nestor Espenilla, Jr., spoke before about a hundred foreign direct and portfolio investors during the Philippine Economic Briefing, which carried the theme “The Rising Philippine Economy: Powering Gains with Global Partners Through Shared Goals.” The event was also graced by Executive Secretary Salvador Medialdea.
The Philippines is aptly described as the next economic powerhouse of Asia, with GDP growth expected to hit the official target of 7-8 percent from 2018-2022, even as inflation is kept at bay.
Sustained and robust growth is targeted to push the Philippines toward upper middle income status by 2022 with a per-capita GNI of at least $5,000, up from $3,550 in 2015.
Expected growth drivers over the medium term include the government’s bold infrastructure program, higher public spending on social services, and strong household consumption on the demand side, plus rising activities in manufacturing, business process outsourcing, real estate, construction, wholesale and retail trade, and tourism on the supply side.
All of these are anchored on the solid foundation of prudent economic policies and strong macroeconomic fundamentals.
Moreover, the growth drivers combine with the Philippines’ young and vibrant population—with an average age of around 24 years old—which will support solid growth in productivity over the next decades.
The Philippines’ economic officials said there are a host of investment opportunities in the country that potential investors may find worthy of exploring. These include infrastructure and infrastructure financing, tourism, banking, wealth management, manufacturing, agriculture, and bond market, among others.
“With the Philippines primed to play a key role in the vibrant growth of the AEC (ASEAN Economic Community), the Duterte administration is looking at increased private sector participation in the financing of its projects meant to close the infrastructure backlog, attract investments, create jobs, and achieve financial inclusion,” Finance Secretary Carlos Dominguez III said.
Dominguez said that “while the government is accessing grants and ODA (official development assistance) loans in the early part of its infrastructure buildup plan, it is looking at the greater involvement of private investors once the big-ticket projects are in place.”
“We have also endorsed for Congressional approval a Comprehensive Tax Reform Program that is designed to help provide a steady revenue flow not only for this ambitious infrastructure program, but also for the Duterte administration’s programs on human capital development and social protection that are geared to accelerate poverty reduction in the medium term,” he said.
Meantime, Secretary Pernia harped on sound and growth-enabling policies of the one-year old Duterte administration.
“We are enhancing the ease of doing business by streamlining processes in line agencies. We are strengthening integrity of our public institutions, such as through freedom of information beginning with the Executive branch, to the example, and other anti-corruption initiatives. Government is now much faster in approving big-ticket infrastructure projects, having rationalized certain procedures. All of these result in an environment that is more welcoming to business,” Pernia said.
For his part, Secretary Diokno highlighted the Philippines’ massive infrastructure program, dubbed “Build Build Build,” for which the government intends to spend between US$160 billion and US$170 billion over the next five years.
Infrastructure projects are aimed decongesting urban areas and spreading growth opportunities in the countryside, thereby enticing more investments.
“Our infrastructure program is the boldest the Philippines has ever had. With the amount of money we will infuse on expressways, airports, seaports, mass transit systems, among others, the Philippines will enter its Golden Age of Infrastructure. Ambitious as it may sound, the government is keen on realizing this infrastructure agenda,” Diokno said.
BSP Governor Espenilla, who took the helm of the BSP last July 3, said the BSP is keen on contributing to an environment that enables more job-generating investments on a sustainable basis by ensuring price stability as well as financial stability.
He said further that the BSP, recognized as a pillar of strength for the Philippine economy, under his watch will observe the policy of “continuity plus plus.” “This simply means we will build on our strong and stable foundations by instituting additional game-changing financial sector reforms that will complement the economy’s robust and inclusive growth agenda,” Espenilla added.
“Following the full liberalization of the Philippine banking system in 2014, we intend to raise the bar further by having even more competition, which will bring in better innovation, especially digital innovation, and prompt industry players to improve delivery of financial services to consumers. At the same time, we want to champion capital market development. We will do these through an enabling regulatory environment. Given this backdrop, investors in financial services are certainly welcome,” Espenilla said.
Meantime, Standard Chartered, which hosted the event, underscored the importance of multi-stakeholder partnership to deliver this ambition.
“Bank-investor-government as a three-way partnership is an even more robust and sustainable partnership. Financial institutions have always played a key role in supporting the country’s infrastructure development, and on a broader scale, the overall growth of the Philippine economy. A well-defined and fair model is one that provides an appropriate risk allocation and addresses the minimum expectations of investors. Infrastructure projects that meet these prerequisites will generate both economic returns and social benefits,” said Standard Chartered Bank Regional CEO for ASEAN and South Asia Anna Marrs.
“We have supported the country’s economic endeavors over the years, participating in the country’s infrastructure projects, liability management, and financing exercises as one of the book-runners in the Republic’s sovereign bond issuances and one of the country’s Sovereign Rating advisers,” added Lynette V. Ortiz, CEO and Head of Global Banking Philippines.
Business leaders from the Philippines, particularly the heads of Ayala Corporation and the Philippine Chamber of Commerce and Industry, added substance to the discussions during the event by participating as panelists during the Q&A session.
According to Jaime Augusto Zobel de Ayala, Chairman and CEO of Ayala Corporation, a Philippine conglomerate that has done business with Singaporean partners for decades, “We are pleased with the government’s economic team, led by seasoned, experienced, and like-minded individuals who are well respected by the private sector. We also take great comfort in the economic team’s focus on overweighting infrastructure spending to complement the country’s strong economic consumption statistics.”
On a similar note, PCCI President George Barcelon said: “The Philippines has never been more open to investors. With doing business significantly improving and infrastructure projects gaining traction, investing in second tier areas around the country has been made possible. We have our local chambers nationwide who can help investors navigate these opportunities.”
The roadshow in Singapore is first of a series of economic briefings in Asia that the economic team of President Duterte plans to hold over the next couple of months to actively engage existing and potential investors to the Philippines.
