BIZ BUZZ: Stocks in the time of P-Noy

As recently departed President Benigno Aquino III aka P-Noy was laid to rest on Saturday, stock market participants may reminisce about the bull market that enriched many of them during his term.

On July 1, 2010, the first trading day since P-Noy’s inauguration as the 15th president, the Philippine Stock Exchange index (PSEi) closed at 3,315.26. Three months into his term, the index breached the 4,000 mark and likewise the 5,000 and 8,000 levels in the coming years.

Under P-Noy’s term, the PSEi rose to all-time intraday highs 131 times and climbed to all-time high at the close 119 times. At one point, new highs were recorded for seven consecutive trading days.

“I fondly recall the time when I used to personally send stock market updates to President Aquino each time the market breached new milestones. We have to give credit to P-Noy and his good governance drive, which promoted political stability and transparency that translated well in market’s strong performance,” said PSE chair Jose Pardo.

Apart from soaring to new highs, it was also under P-Noy’s term that the highest net foreign buying in the stock market was recorded. That was in 2012 when the local bourse recorded P109.98 billion worth of net foreign flows. The highest total value turnover and average daily value turnover posted since 1998—when the PSE began its electronic data recording—were seen in 2013 at P2.55 trillion and P10.52 billion, respectively.

The highest ever capital-raising in PSE’s also happened during his watch. That was in 2012, when capital raised from initial public offerings, follow-on offerings, stock rights offerings and private placements, excluding the sale of secondary shares, hit P219.07 billion.

“All these stock market records during President Aquino’s time served as a strong testament to the level of investor confidence in his governance. The strong macroeconomic fundamentals served as the ideal backdrop for foreign and domestic investors to raise capital and invest in the Philippine stock market,” PSE president Ramon Monzon said.

P-Noy had also visited the PSE a number of times for bell-ringing ceremonies during his term, commemorating the record highs of the stock market.

On June 30, 2016, President Aquino’s last day in office, the PSEi closed at 7,796.25, which means that during his six-year term, the PSEi had soared by 135.2 percent.

—Doris Dumlao-Abadilla

Where credit is due

Few might credit the late President Aquino for his administration’s contributions to building new infrastructure, let alone his Public Private Partnership (PPP) program, which the present government wasted no time dismantling in 2016.

Yet days before he died, one of Aquino’s most successful PPP projects made a surprise appearance while implementors of President Duterte’s infrastructure program—repackaged under the “Build, Build, Build” (BBB) banner—presented their achievements thus far.

When Transportation Secretary Arthur Tugade started to show new projects completed under Duterte, he chose to open with the Mactan Cebu International Airport (MCIA), arguably the most beautiful and well-run airport in the Philippines today.

Duterte used similarly flattering terms when he inaugurated MCIA’s new passenger terminal underneath its dramatic arched roofs in 2018.

We say surprise because the MCIA expansion PPP, awarded to Megawide Construction Corp. and India’s GMR Infrastructure in 2014, isn’t named among the flagship BBB projects. In fact, earlier in the presentation, Bases Conversion and Development Authority CEO Vivencio Dizon mistakenly said the Aquino administration left “almost zero” projects for them to work on. He probably chose to forget the 50 or so carryover Aquino-era PPPs, whose remnants were canceled or scattered into the BBB pipeline, or was unaware that Tugade would highlight one of these PPPs minutes later. Showing off MCIA was a stark reminder that the current administration has yet to begin and complete a truly defining infrastructure project, despite its many achievements.

The Ninoy Aquino International Airport modernization was a potential game changer but this was shelved. Even the Skyway 3 of San Miguel Corp. was finished this term but was started during Aquino’s presidency.

Aquino’s PPP was vilified partly because so few projects were completed. In fact, infrastructure projects take years to finish and can encounter problems with very uncertain outcomes. This is why legacy projects like the Japan-funded Metro Manila subway and the North-South Commuter Railway will be completed years after Duterte steps down.

What Aquino’s administration proved was that private sector could be a credible partner in building major infrastructure if investors felt the rules were fair and transparent.

“The foundations were done during Aquino’s time,” former PPP Center executive director Cosette Canilao told Biz Buzz.

She said some project approvals took longer because of Aquino’s meticulous nature.

He asked many questions and wanted to know the projects inside and out, wary about “any potential corruption” that plagued major projects in the past, she said. The early PPP promises also came ahead of much of the policy framework.

This slowed down the process, leading to much of the criticism that hounded PPPs. And yet, the private sector has not abandoned PPPs and showed they were willing allies in nation-building. All told, the private sector ponied up around P64 billion in premium payments to the government for projects.

BBB was clearly built on the foundations laid by Aquino and his predecessors. With the Duterte government moving into its final year, the hope is the next administration would simply follow through.

—Miguel R. Camus INQ

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