Manila, Philippines- Philippine economic leaders sustained the momentum from President Benigno S. Aquino III’s successful state visit to the US by reaching out to investors and briefing credit rating agencies in its recently concluded non-deal road show.

Finance Secretary Cesar Purisima and Trade Secretary Gregory Domingo visited New York, Boston, San Francisco and Los Angeles from June 11 to 15, to provide updates to banks, investors, bondholders and credit rating agencies on the Philippine economy.

In their meetings, the economic managers stressed on the strong first quarter performance of the Philippine economy, which grew 6.4% during the period, the fastest among its South East Asian neighbors and other Asian peers except China.

“The Philippine growth story stands out in contrast to the more challenging global macro-economic backdrop. Resilient and stable economic growth supported by strong fundamentals and a reform-minded administration provide a compelling investment thesis that was evident by the positive feedback during the Republic’s visit to the US last week. We are pleased to have been a part of sharing an exciting story during these volatile times in the financial markets,” said William H. Strong, Co-CEO of Asia Pacific at Morgan Stanley.

Morgan Stanley helped the Philippine road show in arranging meetings with investors together with other banks namely Citibank, Goldman Sachs and JP Morgan.

The Philippines officials said the stellar performance of the economy was achieved amid a global slowdown and maintained that the positive outlook for the Philippines remains.

“Good governance leads to good economics,” Purisima said, pointing to bold moves in pushing the Aquino administration’s reform agenda. Domingo, for his part, said reforms would continue to be undertaken to attract more foreign investors and businesses and spur faster growth.

The sovereign ratings was also a key part of the discussions in the meetings with key investors and fund managers. The secretaries asserted their confidence that an investment-grade rating for the Philippines was only “a matter of time,” citing that the cost of protecting Philippine bonds against default for five years is lower than some investment-grade countries such as Russia. On the implied ratings, the Philippines is between three to four notches underrated, they said.

While the Philippines is already able to borrow at much better terms compared to higher rated nations, Purisima said the government is working hard at bringing the country to investment grade. “This is very important in attracting investors who do not know the Philippines. We believe that getting better ratings will make it easier for the Philippines to attract more investors into the country. We need more investments to push the growth of the Philippines to a higher level and bring it nearer to a virtuous cycle of more jobs, more opportunities and a better life for more Filipinos,” Purisima said.

The Philippines, the economic managers added, also has a plan in place to mitigate the risks posed by the debt crisis in Europe, economic slowdown in China and weak consumption in the US.

There is limited trade and financial dependence on the EU, therefore potential impacts from an EU demand side shock are modest. Remittances are also expected to remain resilient, as they have consistently increased over the past decade despite numerous shocks. Increased capitalization by banks coupled with steps to improve asset quality have strengthened the Philippine banking system’s ability to withstand shocks. Additionally, the country has an exceptionally strong external credit profile.

“Europe is a very large economy. The region may have issues at this time but there are still a lot of opportunities for the Philippines to expand trade and, bring more investments to the country from that region,” Purisima said.

Purisima said bringing in more investments is key in ramping up the growth potential and Improving the way the economy will grow and mature. “We have a better chance of speeding up growth and bringing down poverty in the medium term,” he said.

Other members of the Philippine delegation included National Treasurer Roberto Tan, Assistant Governor Cyd Amador of the Bangko Sentral ng Pilipinas (BSP) and Executive Director Claro Fernandez of the BSP’s Investor Relations Office.
CONTACT:

MR. CLARO FERNANDEZ

Investor Relations Office

Bangko Sentral ng Pilipinas

Tel No. + 632 708 7487

Email: [email protected]