Poll results an 'invitation' to investors — analyst
MANILA, Philippines - For investors who had a watch-and-see stance before the May 13 mid-term elections, the results should no longer hold them back from going back to or pouring fresh funds into the local capital markets.
COL Financial research head April Tan said the dominance of election winners coming from the administration slate, particularly that of the Senate race, means the reforms that the government of President Benigno Aquino III in his first 3 years in office will continue.
"[Investors] were adapting this wait-and-see attitude for the elections to finish. But now with the results out, they have less reason to avoid this market. It's like an invitation, especially now that the results of the elections," Tan said in an interview with Rappler.
"The regulations [and reforms] the administration would want to push for would not encounter any obstacles. There will be less obstacles," Tan said. "Political unity and high level of political capital helps move things forward."
Team PNoy, the coalition led by President Aquino's party, won 9 of the 12 seats in the Senate and majority of the seats in the House of Reperesentatives.
Among the priority measures the government is pushing in the next 3 years include the mining reform bill, which aims to improve government in mining revenues, as well as the so-called fiscal incentives bill, which will streamline the tax perks given to businesses, among others.
All these reforms and measures, according to Tan, project a clear image of the government's goals, giving investors a reason to continue having high confidence in the country.
"The government is doing the right things. The results [of the reforms] may not be felt immediately but we are on the right path," she said.
The recent credit rating upgrades are affirmations that the government have taken steps that investors agree with.
"The ratings upgrade — though it does not say that tomorrow, money will come flowing in immediately — signals to the world, especially to those people who never considered the Philippines as an investment destination before, that the country is now the place to be," Tan said.
Much work to be done
Tan stressed, however, that much work still needs to be done.
"The regulations that we have are still not efficient. But at least, the government is aware of these problems and they are doing something about them," she said.
Tan said two of the issues she hopes the government addresses soon are the delays in the big-ticket infrastructure projects under the public-private partnership scheme, and the difficulty in doing business in the country since this discourages foreign investors and entrepreneurs.
The Philippines dropped two places in the 2013 Ease of Doing Business Report by the World Bank to 138th from 136th in 2012, making the country the most difficult place to do business in the Southeast Asian region.
Addressing this issue, National Competitiveness Council (NCC) co-chairman Guillermo Luz said in May that specialized teams will be created to improve the country's business enviroment by addressing the bottlenecks.
The NCC is targeting to improve the country's ranking in the global survey by 29 notches to 109th from 138th in 2013.
Tan said achieving this goal will boost the country's capital markets further.
The benchmark index of the Philippine Stock Exchange (PSE) is one of the world's best performing with year-to-date increase of over 20%. It has clocked in 31 record highs so far this 2013.
COL Financial president and chief executive officer (CEO) Conrado Bate projected the PSE index hitting the 10,000 level over the next 3 to 5 years.
COL Financial is one of the country's leading online brokerage firms. - Rappler.com