PSE welcomes Duterte’s SONA

THE PHILIPPINE Stock Exchange hailed the pronouncement of Pres. Rodrigo Duterte in his first State of the Nation Address (SONA) on Monday to maintain current macroeconomic policies, ensure competitiveness and ease doing business in the country.

“The President’s major economic pronouncement should be good for the capital markets as investors are always looking for stability in policies.  The commitment of the government to increase infrastructure spending should only be additive to the current high growth that we have been experiencing,” PSE president Hans Sicat said.

Sicat noted Mr. Duterte’s vow to maintain macroeconomic policies that would facilitate stable inflation and manage the fiscal environment. These are some of the key ingredients that allowed the domestic economy to shed the “sick man of Asia” stigma in the last few years and made it possible for the government to obtain investment grade rating for the first time in history.

The PSE also lauded the statement of the President in pursuing reforms to ensure competitiveness and ease of doing business.

“In the face of globalization and economic integration, the standards for measuring the competitiveness of our industries must be viewed beyond the country’s economic territory. We need to recognize that certain industries require massive amounts of capital, and options that allow consolidation, and liberalization of foreign ownership restrictions, can improve the competitiveness of these sectors,” he said.

Sicat said the PSE was also looking forward to the results of the review of the implementing guidelines of the real estate investment trust (REIT).

REIT gives investors the option to invest directly in the finished products that are already earning money – such as residential and office units, hotels or shopping malls or even infrastructure ventures like toll roads and power plants – and not just the property developer. This was meant to attract investors because the Philippine REIT law of 2009 requires the distribution of 90 percent of income annually.

“We hope that the review spearheaded by the Department of Finance will lead to the resolution of the contentious issues that have clearly prevented companies from applying under the REIT law. REITs should unlock the potential not just of the real estate sector, but also various infrastructure projects that are in need of significant funding and critical to the country’s economic growth,” Sicat noted.

Meanwhile, the PSE is also eager to see the first Personal Equity and Retirement Account (PERA) being launched. “We have seen how many markets have benefitted from a vibrant equity retirement framework in mobilizing savings and increasing retail participation in the capital markets. There has been a lot of work done on PERA and we hope these will lead to PERA being offered to the public soon,” Sicat added.