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Finance Secretary Purisima Invites Global Fund Managers and Institutional Investors in Japan to Invest in the Philippines

22 February 2016 – Finance Secretary Cesar Purisima renewed the call for more Japanese investments in the Philippines before global fund and asset managers, institutional investors, and financial executives at the 2016 Asia-Pacific Investors Cooperation-Japan (APIC-Japan) Capital Markets and Institutional Investors Summit at the Shangri-La Hotel in Tokyo.

Speaking during the Keynote Plenary Session, which was co-moderated by Government Service Insurance System (GSIS) President & General Manager Robert Vergara (photo above), Secretary Purisima touted the 6.2 percent five-year average growth of the Philippine economy, the highest in nearly 40 years, as well as Japan’s strategic partnership and geographical and demographic complementarities with the Philippines, as creating the ideal conditions for greater Japanese investments into the country.

The Secretary highlighted the Philippines’ sound fundamentals, including stable inflation and a strong external sector, evidenced by 13 straight years of current account surplus, as well as rich natural resources, a relatively young population and workforce, and a growing consumer market, that have contributed to 68 straight quarters of economic growth.

“But the key to the success of the Philippines in the past five years is to unlock the opportunities offered to us by the financial market by creating an environment of confidence,” he stressed, “as a result of the good governance agenda of President Aquino.” The Secretary then cited the 24 positive credit ratings actions, making the Philippines the most upgraded sovereign, as evidence of overall investor confidence.

Secretary Purisima recognized that investments in infrastructure, health, and human resources development remain crucial for a sustainable and connected Philippine economy. Maintaining the fiscal health of the Philippines over the next ten years will be critical to finance needed infrastructure projects such as the implementation of the JICA Dream Plan for an integrated transport system in Metro Manila as well as increasing public spending for education and pro-poor programs.

But the Secretary also saw the need to develop capital markets in the Philippines and in Asia, to tap into the region’s pool of savings, and to recycle these funds for needed capital infusion in regional infrastructure. He cited ongoing work on the ASEAN Bond Market Initiative and the ASEAN Infrastructure Fund as good first steps towards integration of regional equity markets and channeling of funds to meet Asia’s US$8 trillion demand for infrastructure over the next ten years.

In the open forum, Secretary Purisima invited global fund managers to revisit existing global carbon pricing protocols and emission standards, which may understate the impact of economic activity on the environment. As Chair of the Finance Ministers of the 20 Most Vulnerable Countries, he reminded fund managers of the role of finance in contributing to collective government action on climate change and the environment, including through tools such as a global tax on shipping and aviation fuel.

GSIS President Robert Vergara for his part stressed that pension funds around the world should consider making green investments and investing in green technologies, which actually do generate the required level of returns. Over half of the investments made by the GSIS private equity fund established together with ADB and the Macquarie Group were in green technologies and renewable energy, and Mr. Vergara hopes it could be the template for other pension funds to finance green investments as well as investments in infrastructure in the Asian region.

The 2016 APIC-Japan Capital Markets and Institutional Investors Summit was organized by the Asia-Pacific Investors Cooperation, a regional investor network exclusively created by and for Asian sovereign wealth funds, government funds, central banks, and public and private pension plans.

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