Here’s a story you won’t read in The Economist – or in much of the rest of the mainstream media for that matter. Investments in the Philippines are up; way up. January to September 2016 saw a 49% increase on the same nine months of 2015. And last month, pledges approved by the Board of Investments (BOI) tripled from September last year – PHP51 billion as opposed to PHP17 billion. Disappointing news for the economy gurus at The Economist; great news for the Philippines and those investing in it.
To The Volatilian™ this comes as no surprise; we’ve been alerting investors to this economy’s potential since President Duterte unveiled his socio-economic agenda back in June. The only thing that does surprise us is how little impact the anti-Philippines coverage has had. But then it shouldn’t; investors are not so easily duped and few, if any, would have evolved their investment strategies based on what The Huffington Post or The Guardian or Time magazine had to say about the Philippines’ economic outlook.
Ceferino Rodolfo, Undersecretary for the Industry Development Group of the Department of Trade and Industry (DTI) and the BOI’s Managing Head, explained: “What we are seeing in the real sector, which is actually the more important one that relies on the fundamentals of the economy, is that growth is being sustained and even accelerated”.
Based on the year-to-date investment picture, BOI chairman, and DTI secretary, Ramon Lopez, expects that 2016 will record an increase in approved investment pledges of between 10% and 15% – that would put them somewhere in the region of PHP403.41 billion to PHP421.75 billion.
According to Lopez: “The investors look at the social economic agenda and the economic policies. As long as they are not changing, as long as it is safe to invest here, investments are protected, contracts are honoured, they see no problem”.
The same bullish investment pattern is being seen at the Philippine Economic Zone Authority (PEZA) – an attached agency of the DTI tasked with investments promotion. In the first nine months of the year, PEZA’s approved investments have risen by 3-5%. Most of this has come from the expansion programmes of existing investors, which is just about the best endorsement of any for entering this market. These are businesses which operate here; they have a true perspective of the risks and rewards of the Philippine economy as it is right now and their decisions have been based on that.
And so the mainstream media’s much anticipated – or possibly hoped for – economic Armageddon turns out to be yet another false prophesy and one that could have cost investors dearly if they’d paid it any notice. That doesn’t mean there won’t be any fluctuations; falls and rebounds in the future – it’s an economy; it’s a living beast. The Philippines is subjected to storms and winds like any market. But given this administration’s resolve and its willingness to use innovative approaches to grow the economy – and given the fact that the successful policies of the previous administration are also being continued – The Volatilian™ believes that the Philippines has a real chance of becoming an Asian Economic Lion.
President Rodrigo Duterte’s war on drugs is not just costly in terms of blood; it’s extremely expensive to fight in terms of cash. But if he doesn’t fight it, and if he doesn’t win it, this emerging market becomes a submerging market. And so for economic reasons as well as for obvious societal reasons this war will continue.
There’s too much at stake here – like the country’s future.