Towards the end of Presidential campaign in the Philippines when it was clear that Mar Roxas was going to lose, his supporters began spreading reports that if Rodrigo Duterte wins the economy of the Philippines will collapse. Reports of panicky investors circulated on mainstream media and was shared and re-shared by Roxas’ supporters on the various social media platforms.
Today, more than two months into President Rodrigo Duterte’s new administration, the Philippine economy is firing on all cylinders and is poised for another record breaking year.
According to Secretary Carlos Dominguez of the Department of Finance the Philippines is “at a critical juncture. The next six years can either continue along the path of high economic growth but high socioeconomic inequality, or chart a different path towards shared prosperity that will uplift all. This is why it is so important to fund the 10-Point Socioeconomic Agenda. It revolves around the need to maintain sound macroeconomic and fiscal policies, invest in the people, and address the binding constraints to investment and job creation. This is why we need tax reform.”
But even as the data clearly shows that the economy under Duterte is doing well, some of Roxas’ most ardent supporters still continue to spread doomsday predictions about the country’s financial prospects. Citing the normal fluctuations in the stock market as proof, disgruntled Roxas die-hards are running around like chicken little screaming that the sky is about to fall.
Fortunately these irresponsible rumors are quickly being quashed by the sober voices of those who really understand the market. According to Lorenzo Tan, former president of the Banker’s Association of the Philippines (BAP) and one of the Philippines’ top bankers, “The Philippine Stock Exchange has appreciated more than 9% year-to-date despite the correction the last few days. There are also external factors that affect global markets including possible a increase in US interest rates in the next two weeks. Some fund managers may take some cash to safety or adjust their portfolios.”
Despite these factors, Lorenzo Tan also says that what observers are seeing “is just a healthy correction for our market, which is still trading at more than 18 times the 12-month earnings, one of the highest in the region.”
Adding that the Philippines has “one of the highest GDP growth rates in the region at 7%,” Tan remains bullish on the continued growth of the Philippine economy, especially in Mindanao, under President Duterte’s leadership.
As people see an increase in GDP growth rates in Mindanao under Duterte administration, there will be tremendous ‘psychological lift’ in the local population that will create demand for primary and secondary homes, Move Up housing, and SME commercial spaces. This will be in addition to the many vertical residential developments that had already started in Davao years ago.