Japanese investors still bullish on RP

Bangko Sental ng Pilipinas (BSP) Governor Amando M.Tetangco Jr. said yesterday that Japanese investors are still largely optimistic on the Philippines as the country’s economic fundamentals held steady in 2008.

Tetangco is heading the economic mission that arrived in Tokyo, Japan on Monday to meet with Japanese investors, creditors and funding agencies and discuss the performance of the Philippine economy last year as well as its prospects for this year.

Tetangco was joined by Finance Secretary Margarito B. Teves, Economic Planning Secretary Ralph Recto along with Trade and Industry Secretary Peter Favila.

According to Tetangco, the mission was a no-deal roadshow where the economic team planned to meet with top executives of various private firms in Japan as well as Japanese economic and finance officials.

Yesterday, the economic team conducted a country presentation attended by financial and research institutions in Japan.

“So far, (the feedback) is positive that the Philippines has been relatively stable in the midst of the turmoil,” Tetangco said.

Tetangco said the economic mission intends to apprise investors and creditors from both the government and the private sector in Japan on how the Philippine economy performed against the global economic downturn.

In the discussion, according to Tetango, were policies and reforms that the Arroyo administration intends to undertake, along with program initiatives laid out this year, to mitigate the impact of the slowdown and sustain the country’s economic growth.

Today, Tetangco said the team is scheduled to meet with top executives from the Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Banking Corp. and Nomura Securities.

Also in the meeting would be top officials from Japan’s Ministry of Finance, Bank of Japan, Ministry of Trade and Industry, among other government agencies.

Tetangco has consistently expressed optimism that the Philippines would fare better than most countries when the global economic slowdown hits full blast this year.

Tetangco also said he is not expecting an outlook or ratings downgrade this year despite the difficulties expected to be faced by the economy in the wake of the global slowdown.

Earlier, Fitch Ratings opened the review season by saying that it is retaining its “stable” outlook on the Philippines, while other countries have been put on negative watch because of the effects of the US financial crisis and the ensuing economic recession.

Tetangco expressed optimism that the same sentiment is likely to carry across to the other credit ratings agencies as they evaluate the country’s prospects this year.

“I think the Fitch move to keep our outlook stable is a general view among other rating agencies,” Tetangco said. “I think we’ll do okay as long as we keep on track.”

But Tetangco added it would depend on government actions in the coming months and how regulators would be able to implement the economic stimulus plan.

“It all depends on how we will handle the challenges,” Tetangco said.

Tetangco said the implementation of the economic stimulus plan would be critical to stable ratings, regardless of whether the government is spending more than the 2009 budget prescribed.

There have been criticisms that the Arroyo administration’s P300-billion plan would not be enough since it has already been in the 2009 budget since before the crisis became a full-blown meltdown.

But Tetangco said he is less concerned with the amount allocated by the government than with its capacity to actually implement the programs and spend the money.

“The important issue is for the money to be spent, it doesn’t matter if it is not new money,” Tetangco said. “It is the money that you are spending that would create economic activity and generate growth.” –Des Ferriols, Philippine Star