Philippines one of the most attractive investment destinations - Oxford Business Group

Global consulting firm The Oxford Business Group (OBG) launched the latest version of a report on the country from the investor’s perspective, highlighting the Philippines’ growth story and its improving stature in the global arena.

The report entitled, “The Report: the Philippines 2015”, unveiled in Makati City on May 7, was produced with the help of the Makati Business Club and the Philippine Chamber of Commerce. It features detailed coverage of specific industries, most of which are benefiting from the strong economy.

“We are convinced that the Philippines is now one of the hottest and most attractive investment destinations not just in the region but globally. There has been a huge shift in investor sentiment away from traditional emerging markets such as the BRICs, China and India, now it’s all about Southeast Asia,” said Paulius Kuncinas, OBG Managing Editor for Asia in his speech at the launch.

The Philippine growth story is exciting, he said, because the growth is driven by domestic consumption anchored on high local demand.

This is a more sustainable model compared to the export-driven growth of other Asian “Tiger economies”, he said.

The most remarkable aspect of the story, he added, was the emergence of new sectors led by the BPO industry, which, he noted has moved on to more value-added services. It can claim global leadership along with India.

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Philippines Aims for 'A' Credit Rating from Standard and Poor's

Standard and Poor’s Ratings Services (S&P) has kept its credit score on the Philippines, and is likely to stay at that level in the next six months at the least.

In a statement, S&P said it affirmed the Philippines’ ‘BBB’ long-term foreign currency rating, and assigned a stable outlook, which means the current score stays for the next six months to a year.

According to S&P, its move was driven by the country’s strong external position amid rising foreign exchange reserves and a smaller foreign debt burden.

Remittances by overseas Filipino workers (OFWs) and revenue from the business process outsourcing (BPO) industry have propped up the country’s external payments position. A recovering U.S. economy also has fueled exports growth, lending further support to the Philippines.

The Philippines is rated a notch above the minimum investment grade by both S&P and Moody’s at 'BBB' and 'Baa2', respectively. Fitch however has kept the Philippines at the minimum investment grade of 'BBB-'.

In a statement, government officials said the Philippines is aiming to hit the “A” rating over the medium term.

“Fundamentals of the Philippines significantly improved over the last few years. With the trend staying positive, additional upgrades in the credit ratings over the medium term should be achievable,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said.

“On the part of the BSP, efforts to further improve the regulatory environment for financial institutions, maintain price stability, and strengthen external payments position would be its contributions to placing the economy on an even higher gear,” Tetangco said.

Finance Secretary Cesar Purisima said a credit rating in the “A” category should be attainable, especially since the Philippines still remains underrated if one would compare the country’s credit ratings with how the market prices Philippine debt papers.

“If compared with those of other emerging markets, fundamentals of the Philippines are one of the strongest. And with continually improving major credit indicators, including debt manageability, credit ratings ideally should adjust accordingly,” Purisima said.

“Throughout the past five years of pursuing initiatives toward good governance, we have managed to outperform even our own targets and expectations. Moving forward, we expect to sustain the reform momentum and to raise the bar even higher,” he added.

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Optimistic Filipino Business Execs on a Hiring Spree

Philippine business leaders are Southeast Asia’s most optimistic and the world’s third most bullish.

In its International Business Report, Grant Thornton said at least eight out of every 10 business executives in the Philippines are upbeat about the country’s economic prospects in the next 12 months.

Audit firm Punongbayan & Araullo conducted the survey in the country for Grant Thornton.

Filipino executives were behind their Irish and Indian counterparts, optimism among whom reached 92 percent and 89 percent, respectively, of survey respondents.

Filipinos however were the most optimistic in Southeast Asia, with Indonesians coming the closest at 68 percent, followed by Thais, 36 percent; and Singaporeans, 4 percent. Malaysians bucked the trend, with pessimists outnumbering optimists.

Filipino executives also are in the mood for hiring, with the percentage of respondents expecting an increase in employment at 56 percent, up 14 percentage points from last year.

Despite the improved hiring outlook, more than a third of respondents are hard put looking for qualified workers, albeit down 5 percentage points from last year.

“Although there’s a slight improvement in our skilled workers compared to last year, the gap between businesses’ hiring appetite and the depth of the local talent pool is still alarming,” Marivic Españo, chair and chief executive of P&A, said. 

"The country needs to cultivate the kind of workforce it needs to stay competitive and prevent our most highly skilled professionals from emigrating for job opportunities abroad,” she added.

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