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PHL classified among ASEAN economies expected to attract investor interest

THE PHILIPPINES was among a group of regional economies expected to attract the most interest as an investment destination, according to an analyst participating in a Fitch Solutions webinar.

The Philippines in the same category as Indonesia and Vietnam within the Association of Southeast Asian Nations (ASEAN) in terms of investability, according to Tim Wong, DBS Bank Group Research head and Asian Insights Office managing director, noting that the Philippines in particular enjoys critical mass in terms of the population’s wealth.

“They’ve just gotten to a level of GDP (gross domestic product) per capita, which is when middle class consumption really starts to take off,” Mr. Wong said in the webinar.

“It’s driven by factors that are actually baked into the fact that there’s a large population, a young population, so we got positive demographics,” he added.

He was asked to identify which ASEAN countries he expects to outperform, to which he replied, “the Big Three in ASEAN… Indonesia, Philippines and Vietnam.”

Political risk is also declining in the Philippines, another webinar participant said, which will make it more attractive to foreign investors.

“The risk is declining in the Philippines now according to our data, but it’s early on in the new Marcos government,” Fitch GeoQuant Data and Analytics Head Ross Schaap said.

“Our system reads the news, and it scores these countries on that basis. We have a lot of positive news right now. We’re cautiously optimistic,” he added.

Mr. Schaap also noted that the government made progress in stabilizing the macroeconomic environment during the Duterte administration.

He added that investment, trade, and regulatory environment risks leveled off and even maybe rose slightly during the previous administration.

Meanwhile, Hannah Nguyen, International Chamber of Commerce Digital Standards Initiative Digital Ecosystems director, noted that ASEAN companies will be looking to reduce costs and to improve resilience and visibility in the supply chain which will enable them to be more agile and competitive.

She added that this will lead companies to upgrade their environmental, social, and governance compliance.

Aside from politics and a large and young demographic, Mr. Wong also noted that the investment flows are geared towards sectors that benefit from infrastructure, urbanization, and digital transformation.

“Urbanization is very much tied in with middle class income growing as people move to cities and find jobs in those cities,” he said. — Aaron Michael C. Sy