Valentino S. Bagatsing, Chairman and CEO of the Investment and Capital Corporation of the Philippines (ICCP), a leading independent investment house, emphasized today that policy stability is a critical factor in attracting long-term capital. According to Bagatsing, while investors are prepared to manage business risks, they are often deterred by policy uncertainty and sudden regulatory changes.
Bagatsing emphasized the importance of consistent rules, particularly for long-term projects. “You cannot enter into a 20-year project and have the rules change at year five or ten,” he stated, underscoring that such reversals and “predatory roadblocks” quickly erode investor trust and confidence.
The Chairman’s message resonates strongly with the current state of the Philippine capital market. Compared to its regional counterparts, the Philippines’ capital market is underdeveloped, with the Philippine Stock Exchange listing fewer than 300 companies. In contrast, neighboring countries like Vietnam, Thailand, and Indonesia have significantly larger markets, with over 750, 850, and 900 listed companies, respectively.
Bagatsing noted that Vietnam’s rapid market expansion, despite once seeking guidance from Manila on setting up its stock market, reflects not only policy stability but also discipline and predictability. Vietnam’s market capitalization is now approximately 70% of its GDP, dwarfing the Philippines’ market relative to its economic size.
For the Philippines, Bagatsing’s message is clear: investors are willing to manage market risks, but they require that contractual commitments be honored. This means respecting long-term agreements while still allowing for transparent and innovative adjustments when necessary.
“The Philippines is not short on opportunity,” Bagatsing added. “Ultimately, trust in governance is the main driver in attracting long-term capital to build critical infrastructure.”
