MANILA, Philippines—A banker and a business analyst said they got what they wanted to hear from President Aquino’s State of the Nation Address, or Sona, on Monday, when it came to establishing an economic environment hospitable to fresh investments.
Paul Joseph Garcia, senior vice president at Bank of the Philippine Islands and head of Odyssey Funds, cited the positive message of the Sona to investors. Garcia lauded Aquino’s commitment to good governance and the eradication of corruption while implementing economic programs and reforms to make growth “inclusive.”
“The boost in infrastructure spending will boost the economy’s competitiveness and attract more foreign direct investments. The Philippine’s economic growth in first quarter of 2012, one of the highest in the world and second to China’s (in Asia), would continue to attract more investor interests in sectors like BPO [business process outsourcing], tourism/gaming, property, financial services, power and energy, retail trade and mining,” Garcia said.
Jose Mari Lacson, head of research at Campos, Lanuza & Co. said: “The Sona speech was very long. After the 85 minute mark, however, I think the speech was already beginning to lose its value.”
But on the economic points, Lacson said the Sona was within expectations. “We expected President Aquino to be consistent in his message that his government is focusing on reforms aimed at removing graft and corruption.”
Lacson, though, noticed the President’s silence on the public-private partnership program to boost investments in infrastructure. “We also said that most likely President Aquino would not dwell on the PPP [public-private partnership] projects considering there was nothing worthwhile to report. As none of the 16 original projects scheduled for 2012 have been bid out, it was understandable that the President could only mention that the bidding for the LRT-1 extension project is now progressing. We are cautiously optimistic over the plans to upgrade several international airports such as Panglao and Laguindingan. Remember, however, these were also included in the 2012 PPP projects yet progress remains slow,” Lacson said.
The analyst said he hoped that Congress would heed the call to put in place the necessary legislation on the mining sector that was requested by President Aquino. Enactment of the revenue-sharing amendments would remove much of the remaining uncertainty over the mining sector, he said.
Lacson said the most uplifting economic indicatorw, however, were the decline in the unemployment rate and the increasing contributions of the BPO sector and tourist arrivals. “Those were really tangible yet relatively unreported gains of the administration.”
On the other hand, Lacson said the Aquino administration could not really take full credit for the stock market’s robust and record-setting performance. He added that the stress on social services was the right tack to take.
“I think the mention of several socio-economic indicators such as health, education, public safety and disaster preparedness was very welcome in the sense that these contribute to the long-term competitiveness of the economy, i.e. the administration is not short-sighted in its thrusts,” Lacson said.
The longest-lasting and most robust applause was given to the President’s statements on responsible parenthood, which suggested that the President Aquino would actively push for the Reproductive Health Bill. “This is understandably so because the high population growth is often blamed for negating economic productivity gains,” Lacson said.
The analyst said he was not at all surprised by Aquino’s statements on the West Philippine Sea/Spratlys/South China Sea issue. “The call for national unity in asserting our claims in the West Philippine Sea was also expected and is probably the most important as far as establishing President Aquino’s leadership in front of Congress. However, we also risk further intensifying tensions in the West Philippine Sea despite previous pronouncements to hold back any statements that reveal our position,” he said.