Finance Secretary Cesar V. Purisima Highlights Strength of Philippine Economy and Capital Markets
Purisima at the FinanceAsia Philippines Capital Markets Forum in Hong Kong Today
23 June 2015– Finance Secretary Cesar V. Purisima gives the opening address today at the Philippines Capital Markets Forum in Hong Kong. Speaking about “The Philippines Today,” Purisima opens a day-long discussion on the Philippine economy and the strength of its capital markets.
Treasurer of the Philippines Roberto B. Tan is set to deliver the opening remarks a few hours after, on “What the ASEAN Economic Community Really Means for the Philippine Capital Markets.” Panel discussions will focus on mapping the economic growth of the Philippines, including risks, regulatory landscape, and the marcoeconomic environment. The impact of US interest rates, as well as corporate and sovereign financing requirements will also be covered.
Purisima’s speech recalls how the Philippines executed its first global USD transaction for the year last January 2015 with an accelerated “Switch” tender offer exercise. Purisima also gives key highlights on Philippine bond markets in his remarks.
Compared to peers, Purisima gives data showing that the size of the Philippines’ local currency government bond market is at 31% of GDO or USD 87.09 billion at the end of 2014. While the same size of local currency government bonds was retained, investment grade ratings were achieved due to proactive debt management, fiscal reforms, and the President’s good governance is good economics governing philosophy.
Meanwhile, the size of the local currency corporate bond market in 2009 was only at USD 7.61 billion, or 4.38% of GDP. By end-2014, this has increased by 123% to USD 17 billion, or 6% of GDP. Corporates are also borrowing longer from the markets. From 2000 to 2010, the total corporate bonds with maturities greater than 10 years was at 0.62% of the total. As of December 2014, the figure has increased to 8.05% of total.
“The banking system shows a similar story, improving indicators on all fronts, thanks to the management of the Bangko Sentral ng Pilipinas or the Central Bank under Gov. Tetangco. The Philippines and the region can grow even further, and can deepen and strengthen our capital markets through our proposed Cebu Action Plan that will be the key output of this year’s APEC Finance Ministers’ Process,” Purisima said.
The Cebu Action Plan (CAP) is a 4-pillar roadmap for APEC member economies, promoting financial integration and inclusion, advancing fiscal transparency and reforms, enhancing fiscal resiliency, and accelerating infrastructure development and financing. The CAP stands to be one of the Philippines’ flagship initiatives in the region’s bid for more inclusive and sustainable economies as the country hosts the APEC meetings this year.
The FinanceAsia event will also touch on opening up the bond market, and will take a look at which sectors will see the most activity in the near-term horizon. The Philippines will also be featured as Asia’s M&A destination while experts discuss the policy and regulatory environments behind M&A, as well as the outlook for funding acquisitions.
Developments in the Philippine equity market and in improving corporate governance will also be recapped with fund managers and investors discussing the role of private equity intomorrow’s market. The day is expected to close with an interactive Q&A with some of Asia’s major investors into the Philippines, covering the reasons behind the Philippines’ attractiveness, and how Filipino corporations are connecting with key business partners abroad.
