The bullish outlook of investors, international institutions and foreign governments on the Philippine economy are telling marks that beyond the political noise, confidence remains high on the capability of the Duterte administration to deliver its commitment of inclusive growth through its transformative 10-point socioeconomic agenda.
Finance Spokesman Paola A. Alvarez said these positive developments include the recent successful auction by the Bureau of the Treasury (BTr) of P100 billion worth of retail Treasury bonds (RTBs), the expression of support from other countries and international institutions for the administration’s 10-point socioeconomic agenda, and the upbeat outlook of the business community on the economy.
“If one were to ignore the political noise generated by certain groups, one could clearly hear the voices of continued optimism over President Duterte’s commitment to bring real change through the implementation of transformative reforms not only in the economy but on the peace-and-order front, as well,” Alvarez said.
She explained that the recent issue of P100 billion worth of RTBs, even when the auction commenced just days after the bombing of the Roxas night market in Davao City, emphasized the strong confidence of investors in the Duterte administration’s capability to sustain high growth.
“The BTr announced earlier that its fund-raising exercise of auctioning the first set of RTBs [under] Duterte[’s] watch aims to supplement the funds for the government’s planned infrastructure buildup and increased spending on human capital and social protection for the poor. The overwhelming success of the RTBs proves the high credibility of the Duterte administration in delivering these commitments,” Alvarez said.
She mentioned that another positive development was Standard & Poor’s (S&P) recent announcement of maintaining the Philippines’s investment grade of “BBB” with a stable outlook. S&P cited the economy’s strong fundamentals and prudent economic management that point to the sustainability of the country’s economic gains.
Citing the statement made by the Investor Relations Office (IRO) of the Bangko Sentral ng Pilipinas (BSP), Alvarez said a rating within the investment-grade scale is a “seal of good housekeeping” that marks the ability of a country to pay its financial obligations, given a variety of factors that include favorable economic conditions.
S&P said the country’s young, educated and flexible work force, rising investments and stable financial system as among the bases for its projections that per-capita income in the Philippines would rise by 4.4 percent to $3,000 this year, and growth would accelerate to 4.6 percent from 2017 to 2019.
Finance Secretary Carlos G. Dominguez III has welcomed S&P’s “good news” on the economy, saying that it “gives the new government greater resolve to transform the economy into a truly inclusive one by pursuing, among others, a tax- reform plan that seeks to generate enough revenues to grow the middle class, energize the corporate sector, and raise investments in human capital and social protection to drastically reduce poverty incidence.”
In his meetings with foreign ambassadors from Spain, China and the European Union (EU), as well as with leaders of international institutions, such as the Japan International Cooperation Agency and the World Bank, Dominguez received expressions of support for the Duterte administration’s 10-point socioeconomic agenda.
Both foreign and local business organizations also remain bullish on the economy under the Duterte administration, according to Alvarez. These include the Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation Inc. (Philexport) and the Management Association of the Philippines.
A 2016 Philippine CEO Survey Report, recently unveiled by the MAP and Isla Lipana & Co./PwC Philippines, showed that 78 percent of CEO’s and business leaders polled believe that GDP growth would either hit or exceed this year’s forecast of 6 percent to 7 percent, while 80 percent expect the same for next year’s GDP growth forecast.