The continued pursuit of business plans and the financing program from the various banks that support them should not stop now that Malacanang has a new tenant, businessmen and bankers said on Tuesday.
“We believe that all of them, generally, are pro-business and therefore it’s the degree with which they will execute their plans for the Republic and the country that will spell the difference in higher or slightly lower growth rate,” Security Bank President Alfonso Salcedo Jr, for instance, said.
Salcedo’s take on the outcome of the presidential races departs from an earlier interpretation given by former Finance Secretary Ramon del Rosario Jr. that with outspoken Davao City Mayor Rodrigo Duterte at the helm of government, the business community might not be as enthusiastic and that presumptive President’s tenure could even prove disruptive.
“Too early to speculate,” Salcedo said in a text message.
At the bank’s annual stockholder’s meeting last April, Security Bank Chairman Alberto Villarosa was confident business will continue to be bullish after the 2016 elections, regardless of who wins in the presidential races.
Salcedo also said at the same meeting that historically, the so-called middle market has been politically agnostic, and tended to focus on demand and as well as meeting those demands.
However, the bullishness of the market fluctuates regionally depending on the victory and strength of a preferred candidate in a specific region, he quickly added.
“I go around all over the country regularly and over the past two months leading up to the May 9 elections I have never felt any of our clients hold back or indicate to us that they will abort their expansion plans if candidate A, B or C wins,” he said. The Philippines was ranked in prior years as one of the fastest growing economies in Southeast Asia. As politics play a vital role in stocks and currency, aside from economic fundamentals, leadership remains a key factor in maintaining the strength of the currency rate and the stock market.
In previous years, the market proved volatile in certain periods after the national elections. A study done by Wealth Securities, a leading stock brokerage in the Philippines, showed that in the first week after Corazon Aquino, Fidel V. Ramos and Benigno Aquino III were elected as presidents, the PSEi posted positive returns with 22.3 percent, 6.6 percent and 4.7 percent, respectively.
However during the first week of Joseph Estrada and Gloria Macapagal-Arroyo, equity returns slowed to only 3.8 percent and 4.4 percent, respectively.
Nestor Tan, president and CEO of BDO Unibank Inc, said at the bank’s annual stockholders’ meeting that some companies from other industries took a step back in their investments. “I cannot give you numbers because we cannot quantify their intent. We only know that we have large corporate clients that have decided to hold back until after the elections before they proceed with their planned investments,” he said.
Tan explained this has always been the case in every presidential elections. The corporate sector accounts for 40 percent or 45 percent of the banks’ loan portfolio.
“It would just be a deferment to make sure the transition is orderly before they proceed. I don’t think there is any change in the optimism,” Tan said.