Standard Chartered bullish on Philippine infra, bond markets

MANILA, Philippines - The Philippines is in the middle of ASEAN growth, which not too long ago has overtaken China as the single largest recipient of foreign direct investments, according to the Standard Chartered Bank (SCB).

With a population of 625 million people, aggregate gross domestic product (GDP) of $2.4 trillion and a growth of 4.5 percent in 2014, this economy is the seventh largest in the world and the third largest in Asia.

SCB regional chief executive officer for ASEAN and South Asia Ajay Kanwal said in a recent study that international investors in ASEAN, particularly in the Philippines, have plenty of appetite for projects, and are aiming to plug Asia’s $11-trillion infrastructure gap.

“Infrastructure financing, when structured right, could make for an attractive asset class for the institutional community, with huge positive impact on the region’s economies,” Kanwal said, adding that SCB is leading the charge to pursue this asset class, even though Southeast Asia’s economies are cooling.

The study highlighted SCB’s efforts to ostensibly position itself in the ASEAN network as a leading international bank focused on the growth possibilities in Asia, primarily in the Philippines, where it has been active in the past 143 years.

The study further detailed SCB’s efforts to build its clout in the developing and growing capital markets in the region, and how it has been actively supporting the entry into international markets by homegrown Philippine conglomerates.

In a bid to support the financing and investment requirements of its clients in the Philippines, SCB assists local business players actively bidding for major infrastructure projects in the government’s public-private partnership program.

The foreign bank’s efforts include shoring up a major domestic conglomerate’s foray into mammoth infrastructure projects in tollways and railway systems; and prominent construction firm’s entry into major airport construction in Cebu, as well as government-partnered projects to build classrooms and set up livelihood programs for typhoon-ravages communities and school children in the Visayas and other far-flung areas.

Standard Chartered Philippines chief executive officer Anirvan Ghosh Dastidar said the financial institutions focus on the region is deliberate. It displays the commitment to develop regional bond markets, and accentuates SCB’s confidence in the Philippine capital markets.

Infrastructure-building, particularly in the Philippines, as reinforcement to its nation-building process, has been the focus of SCB’s transactions in the ASEAN region’s local currency bond since mid-2014.

The Philippine government recently held a  conference in Manila in partnership with the Asia House, a non-profit, non-political organization that aims to build dynamic links between the diverse communities of Europe and Asia.

The conference tackled the country’s current economic landscape, and how the upcoming Presidential elections may impact its growth momentum

Two of the attendees, Standard Chartered Philippines’ Anirvan, and Regional head of Capital Markets Lynette Ortiz, took part in the discussions with Asia House corporate members, particularly where, and how the Philippines has stood out relative to other emerging economies.

“Standard Chartered is privileged to be among the banks appointed by the sovereign to support efforts in promoting the country. Despite the headwinds and external challenges, the nation continues to be a bright spot in Asia and the bank will help the government promote the opportunities there are in the country,” Anirvan said.

He said the Philippines stands out among the emerging market issuers.  The country is very well regarded and supported by the global investor community as can be seen in the successful issuances the Republic has brought to market over the years.

Anirvan said SCB is in a strong position to help grow the bond market in the region, and in the process, help the spur the Philippines’ economic development.

As the only international bank with a strong presence in all 10 ASEAN member states, Standard Chartered has been working with the various ASEAN economies and governments, interacting with clients and partners, and promoting the benefits of economic integration.

“We believe that by growing the economic pie, all member states of ASEAN will benefit. Closer economic integration could improve the cost competitiveness for business, adding to the attractiveness of ASEAN and greater integration could lift the region to the next level of growth,” he said.