ZURICH—Gone are the days when the Philippines had to beg for investments. Now, investors are lining up to ride on the country’s economic momentum, President Aquino said here on Saturday.
Speaking before a crowd of about 500 members of the Filipino-Swiss community, Mr. Aquino said the market back home was soaring to all-time highs and that the main-share Philippine Stock Exchange index (PSEi) may hit the 7,000 milestone within the year.
“If we further help each other, I won’t be surprised if we make it to the Guinness Book of World Records because of the strong performance of our stock exchange,” said the President, who earlier attended the World Economic Forum in Davos.
He said in jest that when he celebrates his birthday on Feb. 8, the index may have hit 6,500.
As of Friday, the PSEi closed at 6,167.64. The index—seen as an advanced barometer of how the economy and corporate Philippines will fare—has hit new record highs for over 70 times since the Mr. Aquino assumed the presidency in mid-2010.
The President was applauded when he reminisced the situation during the term of his mother, the late President Corazon Aquino. “I joined some of her trips. We went to Japan and we were almost begging for them to put up businesses in the Philippines.”
“But these days, there’s a long line of investors for us,” Mr. Aquino said. They are eager to invest in a wide array of sectors from education and infrastructure to information technology, he said.
“These big corporations are one in saying: We’d like to join you,” he said.
But on the other hand, Mr. Aquino said that for the longest time, he was still thinking why there were still Filipinos trapped in extreme poverty no matter how hard they tried. This, he said, was what his administration was trying to address.
“We’re trying to fix the conditions so that people who work hard will earn a good living. We’re dismantling the system where only those with connections, those who engage in bribery or fraud, benefit,” he said.
“We’re trying to build a society where if you get into the line, you will move forward; when you work hard, you can live with dignity and without getting hungry,” he said.
The President said the Philippine transformation did not need any magic potion. He said he had just done what was right: Use public funds to worthwhile programs; follow the rule of law and make violators accountable.
Mr. Aquino again took a potshot at his predecessor, Gloria Macapagal-Arroyo, who is now facing plunder charges.
Citing that the previous administration had entered into a contract to dredge Laguna Lake, he said: “It would have been good—getting rid of sediments to increase the holding capacity of this lake. It sounds good, right, because that’s where we get bulk water for the National Capital Region.”
But, he said, it was discovered that one part of the lake would be dredged but the sediments would be dumped to another side. “You may think it’s a joke but it isn’t. It’s what’s there in the contract,” he said.
Level playing field
The President said Juan de la Cruz would, of course, wonder how the Laguna Lake’s holding capacity would improve that way.
The contract, he said, would cost the government P18.7 billion just to play with mud, adding that those responsible would be held accountable. He said he aborted it because any contract must go through a proper bidding.
“Why did anybody agree to this foolishness? Who will benefit? And I think, very soon, someone will face prosecution for this,” he said.
These days, there’s a level playing field not just in government projects but in the financial markets, the President said.
“This is what the global community is seeing now. This is why despite the global economic crisis, our gross domestic product (GDP) has been growing rapidly,” he said. He noted the 7.1-percent GDP growth in the third quarter of 2012 and the robust performance of the stock market.
“Before I assumed office, whenever the PSEi hits 4,000, it’s always only a blip and then it would go down. At that time, there was not enough confidence to pass the 4,000-mark. But now, we’re past 6,000. So, I asked market players, ‘What’s next, maybe 7,000?’ I was told, maybe 6,500, and maybe that will happen by my birthday next month,” he said.
He said he was later told that the index would hit 7,000 before the end of the year. “This broker never missed his forecast, so there’s a big chance this will happen.”
The President’s stock market view was within the range expected by the market. Based on recent forecasts from eight financial institutions recently culled by the Inquirer business section, the PSEi could climb further to at least 6,200 to as high as 7,100 this year.
Averaging their forecasts, the consensus level is about 6,580 on an assumed growth in earnings per share of 14 percent.
Mr. Aquino arrived in Manila on Sunday.
Summary of forecasts: 2013 PSEi outlook
* Macquarie Group – 7,100
* BPI Odyssey – 6,500-7,100
* First Metro Investment Corp. – 6,800
* COL Financial – 6,500
* Banco de Oro – 6,500
* TradeAsia.com – 6,500
* UBS – 6,250
* Maybank ATR-Kim Eng Securities – 6,200
Average – 6,581
Originally posted: 5:44 pm | Sunday, January 27th, 2013