Sustainability of PH economic growth under scrutiny
MANILA, Philippines — The Philippines is increasingly under scrutiny to determine if the economic growth it enjoyed in the last few years can be sustained beyond 2016, when a new President will be elected.
This is what institutional investors are expected to do at the Philippines Investment Conference organized by the CFA (Chartered Financial Analyst) Institute and CFA Society of the Philippines at Fairmont Makati on Wednesday, CFA Society president April Lee-Tan said in an interview.
“For the attendees, it’s more for them to assess whether or not they will have conviction on the sustainability of economic growth in the Philippines in light of numerous risks,” Lee-Tan said.
“Although we’ve been recovering for a long time, there continue to be a lot of skeptics. The conference aims to bring a holistic view on whether or not it is sustainable because people are talking about domestic risks and aside from that you have other domestic risks. It’s good to see the whole picture for you to make an informed decision on whether growth will be sustainable, and also how do you capitalize on it?” she said.
Whoever will lead the next administration, Lee-Tan said, would have to convince everyone that he or she could continue the thrust that “good governance is good economics.”
“That’s everybody’s concern — whether the changes this administration has accomplished will continue on. Will the momentum continue or will it die in the next? Is there really institutionalization of reforms?” she said.
Lee-Tan said the CFA Institute has lined up high-caliber speakers for Wednesday’s forum, including Timothy Moe, chief Asia-Pacific equity strategist for global investment research at Goldman Sachs; Simon Rudolph, executive vice president at Franklin Templeton Investments (Asia) Ltd; Jim Walker, chief economist at Asianomics Group; Martin Fridson, financial writer and author of “How to Be a Billionaire” and chief investment officer at Lehman, Livian, Fridson Advisors LL; Jack Gray, adjust professor and director at University of Technology (Sydney)’s Center for Capital Market Dysfunctionality.
Since the forum’s main topic will be the sustainability of Philippine economic growth, representatives of the Philippine government such as National Treasurer Rosalia de Leon, Public Works and Highways Secretary Rogelio Singson and Bangko Sentral Deputy Governor Diwa Guinigundo, and the private sector have also been invited to share their views. Top fund managers will also be in attendance.
Lee-Tan, who is also head of research at leading online stock brokerage COL Financial, said that while the current administration has accomplished a lot, there has been some downside. For instance, she said, none of the rate hikes for utilities has been implemented.
But on the positive side, she said, reforms on revenue generation have been institutionalized, some of which were begun during the term of former President Gloria Macapagal-Arroyo. She was referring primarily to the value added tax (VAT) reform of the previous regime which was deemed the single most important reform that stabilized the fiscal position of the government.
Lee-Tan also noted certain structural reforms undertaken by the Bangko Sentral to strengthen the financial system.
On the slower-than-expected rollout of infrastructure projects, Lee-Tan said the public-private partnership (PPP) program was part of the “growing pains” which the administration has found to be “easier said than done.”
Other challenges that the administration must address for the remainder of its term, the analyst said, would be to execute longer-term solutions to preempt a potential power crisis and address the issue of port congestion.
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