PRESIDENT Ferdinand “Bongbong” R. Marcos, Jr. on Monday (Tuesday, Manila time) told the United States’ business community that the country has improved the ease of doing business, touting policies that have liberalized the Philippines’ “vibrant” economy.
Mr. Marcos, who is in the US for a state visit and to attend the United Nations General Assembly, made the pitch as he encouraged investments in key economic sectors, including information technology and agriculture.
“Bouncing back from the pandemic, the Philippine economy has seen robust growth since last year and has returned to its path toward upper middle-income country status, achievable, we believe, within the next few years,” Mr. Marcos said in a speech delivered at the New York Stock Exchange (NYSE). He led the ringing of the bourse’s closing bell at 4 p.m. on Monday.
“Against this backdrop, we have increased the scope for mutually beneficial investments that would mean more jobs and a better quality of life for Filipinos. For investors, doing business in the Philippines is an opportunity to reap the benefits of a vibrant economy,” he said.
Mr. Marcos encouraged the US business community to invest in areas related to information technology and business process management, medical products and devices, electric vehicles and batteries, agribusiness, and telecommunication infrastructure and services.
“We seek partnerships in many areas of our development agenda: in public infrastructure — such as mass transit systems, airports, toll roads; in public services; in digitalization initiatives; in the energy development agenda; in efforts to modernize agriculture; and in programs aimed at strengthening our industries, to just name a few,” he said.
In his speech, the Philippine leader cited policies that have made doing business in the country more attractive, including measures that lowered the corporate income tax, rationalized fiscal incentives, and reduced the minimum paid-up capital requirements for foreign retailers and startups bringing in new technologies.
He also mentioned a 2022 law that allowed full foreign ownership in key public services, which was passed by lawmakers without revising the Philippines’ 35-year-old charter.
Mr. Marcos likewise touted the country’s growing labor force and consumer market.
The US was the Philippines’ third-largest trading partner and second major source of foreign direct investment applications in 2021. Bilateral trade between the US and the Philippines was at $19.6 billion last year.
SOUND FUNDAMENTALSMr. Marcos said his administration is committed to maintaining sound macroeconomic fundamentals and providing a “clear development roadmap.”
He said although the country’s external borrowings increased substantially as financing needs increased due to the coronavirus pandemic, “we continue to reduce the cost of our public debt through judicious debt management.”
“Now that the economy is reverting to normalcy, the government is likewise heading back to the path of fiscal consolidation,” he said, noting that the government wants to reduce its debt-to-gross domestic product ratio to below 60% by 2025 and to 51.2% by the end of his six-year term in 2028 from 60.5% at end-2021.
This will help the country reach its goal to have an “A” level credit rating within the next few years, Mr. Marcos said.
“Our economy’s resilience to crises is recognized internationally… As we look forward to achieving upper middle-income status, we are also gearing up for “A” territory credit ratings in the medium term.”
He noted the Philippines has “sufficient” buffers against external shocks, citing the steady inflows of remittances, business process outsourcing receipts, and foreign direct investments.
Moody’s Investors Service last week affirmed the Philippines’ “Baa2” credit rating, which is a notch above the minimum investment grade and a step below the “A” rating category.
On the other hand, Fitch Ratings in February maintained the Philippines’ investment-grade “BBB” rating, but retained a “negative” outlook, flagging uncertainties surrounding medium-term growth and hurdles to bringing down debt. A “negative” outlook means a downgrade is possible within the next 12 to 18 months.
Lastly, S&P Global Ratings last affirmed the Philippines’ “BBB+” rating with a “stable” outlook in May 2021.
Meanwhile, the President said his government would pursue more partnerships with the private sector and explore government-to-government (G-to-G) deals.
“We have really opened up the policy of the Philippines to more of these public-private partnerships (PPPs),” Mr. Marcos said in an interview with NYSE vice-chairman John Tuttle. “But not only PPPs but also G-to-G arrangements, as I mentioned, joint ventures between private entities.”
Cabinet members as well as Philippine businessmen attended the NYSE economic forum, which was led by Aboitiz Equity Ventures, Inc. Chief Executive Officer Sabin M. Aboitiz, who chairs the Private Sector Advisory Council.
Jaime Augusto Zobel de Ayala of Ayala Corp., Ramon S. Ang of San Miguel Corp., and Lance Y. Gokongwei of Cebu Pacific Air, Inc. were also present during the forum. — Kyle Aristophere T. Atienza
