Key officials to present PH economic achievements to investors in London

June 30, 2014

Key officials, led by Finance Secretary Cesar V. Purisima, are in London for a non-deal roadshow (NDR) where they will highlight to foreign portfolio investors and other stakeholders the latest economic achievements of the Philippines and its bright prospects for the medium term.

The main audience of the roadshow, which will run from today to July 3, are London-based investors in fixed-income securities.

“We would like to impress upon investors outside the country that the Philippines will not merely sit on its latest achievements but will continue to work hard to ensure that recent economic gains are sustainable,” Purisima said.

The government’s economic managers find it prudent to regularly touch base with foreign portfolio investors to ensure the Philippines remains on their radar screens.

The coming roadshow will follow the one held in the United States last December.

Awareness of the strengths of the Philippine economy is vital not only in terms of securing investments but also in reducing borrowing costs.

In the first quarter, CDS spreads on Philippine fixed-income securities averaged 111 basis points, better than Thailand’s 146 bps and Indonesia’s 208 bps, and lower than the 171 bps recorded in the same period of 2010.

In the said trip, officials will highlight the Philippine government’s flexibility to continually augment the budget for infrastructure and social services, which are key to sustaining robust economic growth.

This is because fiscal reforms in the past have helped boost tax collection and reduce the debt burden.

The Philippine economy, one of the fastest growing in Asia over the past two years, should expand anywhere between 6.5 and 7.5 percent this year, between 7 and 8 percent next year, and between 7.5 and 8.5 percent in 2016, according to the government’s targets.

Officials said these targets are attainable, noting that the slowdown to 5.7 percent in the first quarter was due largely to the temporary effects of recent natural calamities.

The officials will also affirm during the roadshow the commitment of the Bangko Sentral ng Pilipinas (BSP) to help keep a within-target inflation and a stable financial system in the country.

“The BSP shall continue to act pre-emptively against threats to price and financial stability,” BSP Assistant Governor Ma. Cyd Tuaño-Amador said.

For five consecutive years up to 2013, the increase in consumer prices in the Philippines had settled within the official targets. The BSP said inflation this year and next year are also likely to fall within target ranges of 3 to 5 percent, and 2 to 4 percent, respectively.

The visiting officials will also affirm to the foreign audience the Philippines’ commitment to liability management, which was key to helping the country secure investment grades.

“The Bureau of the Treasury will continue to deploy debt-management strategies, as market opportunities to do so present themselves, to help further enhance the country’s already favorable credit profile,” National Treasurer Rosalia de Leon said.

Liability-management initiatives of the BTr — including bond exchanges, limiting of exposure to foreign debt, and external-debt prepayment in times of an appreciating peso — are credited for the decline in the proportion of the general government’s debt to the gross domestic product (GDP).

From 44.3 percent in 2010, the general government debt/GDP ratio had fallen consistently until settling at 39.7 percent last year. The ratio is expected to fall further in the coming years.

Joining Purisima, Amador and De Leon in the roadshow are Insurance Commission Commissioner Emmanuel Dooc and Government Services Insurance System (GSIS) President and General Manager Robert Vergara.

Dooc, Vergara, and De Leon will meet with foreign insurers and reinsurers to discuss potential projects for the Insurance Commission, the GSIS, and the Bureau of the Treasury.

The five visiting officials will also attend sessions of a conference on risk and insurance organized by the World Bank. The conference, which will run from July 1 to 3, is aimed at discussing the importance of insurance, especially for countries prone to natural disasters like the Philippines.

Purisima, De Leon, and Amador will also meet with representatives of Economist Intelligence Unit (EIU) on July 3 to give an update on the outlook and latest economic developments in the Philippines. EIU is an international research and analysis organization whose comments and views are used by various organizations, including businesses and multilateral organizations.

HSBC and Standard Chartered serve as lead arrangers of the road show.

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