RP seen to corner hefty share of investments

The Philippines is expected to corner at least five percent of over $1 trillion in investible funds of foreign investors this year, according to estimates by Chase Manhattan Securities Inc.

Chase Manhattan Asia Ltd. managing director and head of debt capital markets international fixed income Robert Fernandez said this means that foreign investors' allocation for Philippines debt papers could reach as high as $50 billion this year.

The officials said allocation for the Philippines for 2000 is the second highest in Asia next to South Korea which is expected to corner about nine percent of the $1-trillion fund.

Last year, the Chase official said the Philippines was able to capture at least two to three percent of the entire issuance in Asia amounting to $14 billion. "There is huge appetite for Philippine debt papers. The investors' appetite is driven by acquisition and consolidation mode in various sectors in the industry," the officials said.

He said most of the sectors that they see consolidating over the near-term are media/telecommunications, financial services and the insurance business.

The Chase official also said that investors took into consideration the effort of the Philippines to continue to let the market access vital information about the Philippine economy. "The investors value transparency and accessibility," he said.

According to Fernandez, the international bond market is very liquid now and encouraged authorities to tap the bond market.

Fernandez commented that the planned $1.5-billion issuance of the Philippine government for the whole of 2000 is relatively small compared to the huge funds floating in the international market.

He cited that last year, in the United States alone, there was about $7 billion to $8 billion in issuance every week.

For the month of January 2000 alone, he said there were about $1-billion worth of bonds offered in the market. Therefore, he said the Philippines should take advantage of this investors' confidence. "The $1.5 billion (planned issuance of the Philippines) is very easy to sell," Fernandez said.

He said most of these investments are probably long-term in nature. "Investors see the Philippines' fundamentals to continue to improve. We are talking of investors who are willing to invest for a long time," he said.

Aside from sovereign issues that are expected to gain favorable response from investors, Fernandez said the foreign investors are also very bullish about various Philippine corporations such as those in the telecom industry like the Philippine Long Distance Telephone Co. "Investors, however, are very confident in overall performance of Philippine corporations," he said.