LATELY, we have seen a proliferation of conferences, seminars, forums (some pompously called summits), all dealing with investments, all proclaiming the grand economic performance of the Philippines compared to its neighboring countries. How attractive the Philippines is for foreign investors and domestic investors, as well!
This is not just a self-serving hype. There is basis and supporting evidence. For those who read the business pages, I have chosen to share the following information, that tell a good interesting story, taken from one of the presentations in one of those forums. My source is Cesar B. Crisol, CEO of Philippine Dealing System Holdings Corp.
The good news is worth repeating: Our capital market is growing. Our debt/bond market is growing. And this means expanding the sources of financing for businesses, aside from bank financing.
We still have a long way to go, but the opportunities are there, for corporate issuers, for financial intermediaries and for investors, local and foreign.
The continuous growth of total outstanding amount of Philippine corporate bonds is a very positive indicator.
In 2010 the amount was P384.15 billion. In 2014, it grew to P760.38 billion, double in four years.
The highest outstanding level of listed corporate bonds with Philippine Dealing Exchange reached P470.3 billion in 2014, from P178.3 billion in 2010. But in terms of issuer participation, the Philippine performance is very poor.
As of September 2014, the following tabulation makes a revealing comparison:
In terms of investor accounts, the profiles of brokered investors are, from my perspective, encouraging. In 2013 the number of accounts in registry was 52,774; in 2014, it had grown to 88,500.
There is a high retail participation for corporate securities, i.e., more than a 70-percent share in retail ticket size for corporate bonds, meaning, P5,000 to P5 million in investment amount per retail ticket.
I had always argued that the real bottleneck in the development of our capital market is the lack of issuers.
Some of them, in turn, have complained that regulatory procedures are burdensome and approvals take too long, that, in the meantime, the market may have ran away from you. True. But we can find solutions, and our regulator are not deaf.
In any case, you may not feel it now, but you will be favored by all these developments, even if unconsciously.