PH seen sustaining favorable momentum

The Philippines remains “one of the brighter spots in Asia” and will likely sustain its favorable economic momentum beyond the closely watched 2016 presidential elections, the chief of BPI Capital said.

Reginaldo Cariaso, managing director of the investment house unit of Ayala-led Bank of the Philippine Islands, said despite uncertainties affecting global markets, many of the factors that had kept domestic economic fundamentals robust in previous years have remained applicable.

Coming from an investor forum co-organized by BPI Capital and FinanceAsia in Hong Kong, Cariaso noted that the “big elf in the room” —as acknowledged by local economic managers themselves—was the general elections next year.

Since President Aquino was sworn into office in 2010, the Philippine government has gained investor confidence on the back of an anticorruption battle cry.

At the same time, the fiscal discipline instilled during this term—along with the value added tax (VAT) reform passed during the previous regime—also allowed the Philippines to achieve investment grade rating for the first time in history.

“This election brings questions of uncertainty, more so than previous elections in the Philippines. But I think there’ more confidence that the Philippines will go through it fairly and still with the momentum that we’ve seen in the last few years,” Cariaso said.

Cariaso took note of Finance Sec. Cesar Purisima’s contention that the empowerment of Filipino citizens would be key to driving confidence no matter who will win in the elections.

After the elections, he said there would still likely be momentum on driving reforms and positive change in the market.

“That’s the general feeling,” he said.

The investment banker—who had worked for JP Morgan and Nomura before joining BPI—said there was likewise some momentum starting to build up in the infrastructure space, a key area where the country had been lagging versus regional peers.

For private equity, Cariaso said there was growing interest in the Philippines, particularly in the consumer and infrastructure sectors.

Private equity refers to investment capital from high net-worth individuals and institutions used in investing and acquiring equity ownership in companies.

He said a number of big institutional investors that previously focused only on large-cap firms were now participating in the growth story of mid-cap companies.