Live Blog

LIVE: Philippine Investment Summit with Nouriel Roubini

Why does the Philippines deserve an investment grade credit rating? Global economic strategic thinker Nouriel Roubini and a panel of domestic business leaders and economists share their insights

  • Good day! Welcome to the live blog of the Philippine Investment Summit 2013.

    From 2pm to 5pm, global economic strategic thinker Dr. NOURIEL ROUBINI and a high-level government and corporate leaders in the Philippines will share their insights on the theme "The Philippine Economic Upgrade: A Bright Spot in Asia."
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  • Rappler's Lala Rimando, Cai Ordinario and Aya Lowe are at the invitation-only gathering in Shangri-la Hotel Makati to provide blow-by-blow account of the goings on.
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  • ROUBINI is the co-founder and chairman of Roubini Global Economics (www.roubini.com), an independent, global macroeconomic strategy research firm. He is also a professor of economics at New York University’s Stern School of Business. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.

    He is dubbed "Dr. Doom" for predicting the 2008 financial crisis in an IMF event. He was proven right. This time, however, he is bullish -- about the Philippines!
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  • THE PROGRAM:


    1:00 PM
    Registration
    Pre-event Briefing with Roubini

    1:30 – 2:00
    Opening Ceremony
    Invocation
    National Anthem
    Welcome Remarks

    Mr. Francisco Sebastian
    Chairman, First Metro Investment Corp.

    2:00 – 2:20
    Keynote Address
    Hon. Cesar Purisima
    Secretary, Department of Finance

    2:20 – 2:30
    Introduction of the Keynote Speaker
    Mr. Roberto Juanchito Dispo
    President, First Metro Investment Corp.

    2:30 – 3:15
    Keynote Presentation
    Dr. Nouriel Roubini

    3:15 – 4:00
    Panel Discussion to be moderated by Tamara Henderson (Bloomberg) and Coco Alcuaz (ANC)
    Dr. NourielRoubini

    PANEL OF REACTORS:
    Mr. Francisco Sebastian
    Mr. Roberto JuanchitoDispo
    Mr. Hans Sicat– President, The Philippine Stock Exchange
    Mr. Manuel Pangilinan– Managing Director and CEO, First Pacific Company Ltd.
    Mr. ErramonAboitiz– President and CEO, Aboitiz Equity Ventures
    Mr. Alberto Villarosa– President, Bankers Association of the Philippines
    Dr. Bernardo Villegas– Economist
    Dr. CielitoHabito– Economist

    4:00 – 4:30
    Open Forum

    4:30 – 4:40
    Closing

    4:40 – 5:30
    Networking Refreshments
    Media Interviews
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  • This is a promotional video on the event

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  • Hi there! Before the event, let's brush up on credit ratings and the Philippines:

    Currently, the Philippines is just one notch below investment grade in all three major credit rating agencies.

    Here are the current credit ratings of the PH per credit rating agency;

    Standard & Poor's - BB+ as of July 2012
    Moody's - Ba1 as of October 2012
    Fitch - BB+ as of June 2012

    The country is hoping for an investment grade this year, 2013.
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  • The LOWEST credit ratings that the Philippines got from all 3 major credit rating agencies were during the Arroyo administration when issues of widespread corruption, political killings, political instability, lack of policy reforms and weak economic performance hindered the country in climbing the credit ratings ladder.

    Standard & Poor's gave its lowest grade to the PH of BB- from January 2005 to July 2009.
    Moody's gave its lowest grade to the PH of B1 from February 2005 to February 2009.
    Fitch Ratings gave its lowest grade to the PH of BB from June 2003 to August 2010.
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  • The HIGHEST credit ratings that the Philippines got was at the tailend of the Ramos administration. This spilled over to the Estrada regime then bounced back up during the current Aquino administration after a series of downgrade during Arroyo's time.

    These are the credit ratings and the time it was given:

    Standard & Poor's - BB+ from February 1997 to October 2002 and again in July 2012
    Moody's - Ba1 from May 1997 to November 2003 and again in October 2012
    Fitch - BB+ from July 1999 to November 2002 and again in June 2011 and 2012

    The HIGHEST ratings were given when there were economic and policy reforms and high confidence on political leaders, such as during the Ramos time. The Estrada administration, on the other hand, enjoyed high political support from the masses although this dampened at the latter half of his regime.

    The current Aquino administration enjoys both high political support and strong economic and policy reforms. Ever since Aquino took office, there hasn't been a credit rating downgrade and the outlooks from these agencies look bright.
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  • Here is a list of the credit rating upgrades (excluding the "outlook") per president from all three major credit rating agencies:

    Noynoy Aquino (2010-2016): 5 upgrades
    Gloria Macapagal Arroyo (2001-2010): 1 upgrade
    Joseph Estrada (1998-2001): 0 upgrade
    Fidel Ramos (1992-1998): 4 upgrades
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  • The Philippines received its first credit rating from Standard & Poor's and Moody's in 1993. Fitch Ratings followed suit 6 years later in 1999.

    Since the start of the credit rating phenomenon, the country has stayed in the speculative grade area. The country never went down to default while never experiencing achieving an investment grade either.
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  • Credit ratings given by Standard & Poor's to different countries.

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  • Standard & Poor's ranks the Philippines 75th out of 141 countries, with a grade of BB+.
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  • Credit ratings given by Moody's to different countries. (July 2012 data)

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  • Moody's ranks the Philippines 74th out of 113 countries, with a grade of Ba1.
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  • Credit ratings given by Fitch Ratings to different countries.

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  • Fitch Ratings ranks the Philippines 69th out of 141 countries, with a grade of BB+.
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  • In Southeast Asia, only 4 of the 10 ASEAN member states currently enjoy investment grade status: Malaysia, Singapore, Thailand and the recently upgraded Indonesia.
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  • Indonesia, the country's closest peer in the region in terms of per capita income, recently received investment grade status from two of the 3 major credit rating agencies: Fitch Ratings in December 2011 and Moody's in January 2012 .

    According to studies conducted by Moody's and Fitch's, it is historically more difficult to reach an investment grade when a country's GDP per capita falls under the $3,000 range. Indonesia's GDP per capita is $3,508 in 2011 while the Philippines is still way below the mark of $2,223 in the same year.
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  • Here at the Philippine Investment Summit. Wow, the hall is already bursting at the seams and more are pouring in! It's a roomful of who's who in the finance industry.

    A lot of foreigners here, too. Bankers, brokers, fund managers, finance journalists from Hong Kong, London, New York, even from faraway Johannesburg, all packing this standing-room-only event.
    by Cai Ordinario via twitter edited by Lala Rimando 1/30/2013 5:51:58 AM
  • Philippine Investment Summit 2013 about to start. COCO ALCUAZ, the emcee for the event, says the summit is 'over capacity', adding this shows how many people want the Philippines to hit 'investment grade'.
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  • The event is about to begin.
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  • FRANCISCO SEBASTIAN, Chairman of First Metro Investment Corporation, delivers his welcome address.
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  • Sebastian welcomes foreign delegates through a 3-word Filipino welcome: Mabuhay (to live), Kumusta (a shortened version of como esta), and Salamat (thank you).
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  • SEBASTIAN: We are no less proud that we have assembled in this room the best of the best in Philippine business...a fourth of Philippines GDP.
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  • Sebastian introduces the first speaker, FINANCE SECRETARY CESAR PURISIMA, as the prime mover of the Philippine economy.
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  • PURISIMA: I feel like the opening act of a Jennifer Lopez concert.
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  • PURISIMA: i cannot agree more with Dr. Roubini (that we deserve investment grade). But a common question to me is 'how sure are we that this is not like the past?' I told them this is totally different. Before external debt is 52.2% now, it's 25.6%.
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  • PURISIMA: Our external debt is lower than Korea, Thailand. We have been able to access the financial markets with peso-denominated instruments.

    Our external position is stronger now than it was.
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  • PURISIMA: We are a structural current acct surplus country thru OFW REMITTANCES and BPO industry, which is growing as a major dollar earner in the Philippines.
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  • PURISIMA:: the president wants a third leg to this position thru the development of the TOURISM sector. The goal is to hit 10 million tourists. Tourism remittances can be the third strong leg of the Philippine economy.
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  • PURISIMA: The capitalization of banking system is above 17%, way above the standard of 8%. NPLs are also at historic lows. Our banks are in a stronger position.

    The BSP is in good hands under the leadership of Gov. Amando Tetangco Jr.

    Inflation compared to 1997 is also well under expectations.
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  • PURISIMA: The most important difference of 1997 and now is the leadership backed by the people. His lowest approval rating is highest among the the highest approval ratings of his predecessors.
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  • PURISIMA: We started to reap dividends...low interest rates. We now have fiscal space to invest in critical expenditures. Increase in DepEd budget, DOH, DPWH, DSWD. On infra, we increased it by 80% from good governance.
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  • PURISIMA: We are giving every Filipino (a chance) to realize his dreams. 2 years and 10 months under Aquino admin, we pointed toward a better future. We are able to grow the economy at 6.5%, higher than 4.7% in the past. Clearly, that shows you Philippines can be better than before.
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  • Purisima says once we address MINING issues, it can address economic issues. MINDANAO can also be an extra gear for the economy.
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  • Purisima: my priority in 2013 is to continue to execute efforts to reduce infra gap, align policies to support administration's objectives.
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  • Purisima: our revenue effort is still not where we want it to be. we want it to go up to 16 or 18% of GDP by the end of PNoy's term.
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  • Purisima: collection of taxes from self-employed, they acct for 10-12% or P10 billion. the average is a bout P7,000 tax payment. their income is about minimum wage. without meaning to focus on a particular profession, doctors, average income tax is P183,000.
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  • Purisima asked BIR to check if the 500+ employees of a certain firm in the country, not all had tax identification numbers.
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  • PURISIMA (on revenues from taxes): Estate tax collection is P850 million to P1 billion consistently for the past 10 years. Our goal is bring that up to P50 billion.

    (On revenues from customs): Average customs collection per container is only at P350,000. There's room for improvement.

    Our deficit, we are targetting 2% of GDP this year.
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  • PURISIMA: For us to be integrated with ASEAN, we need to upgrade infra. That is why solving the INFRASTRUCTURE GAP is a crucial constraint we need to deal with.

    We built a pipeline and we restored confidence in the process/system.

    (Purisima details the improvement in airports and routes in the country to help usher in more tourists to and from various destinations nationwide.)
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  • Purisima says President (Benigno Aquino III) is willing to use political capital for development.
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  • PURISIMA: We cannot drop our guards but we should celebrate our small wins. We're happy that with the good governance agenda, we are able to heal that (negative outlook) psyche so that the Philippines can go back to its position when Ambassador Cuisia was still a boy.
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