CalPERS gives RP higher score in attracting investments

The Philippines garnered a higher score from the California Public Employees’ Retirement System (CalPERS) in terms of efforts to attract more investments.

The country was assigned an average score of "2.13" by Wilshire Associates, a leading consulting management firm commissioned by CalPERS to conduct a study on the pension fund’s flow of investments to 27 emerging markets.

The score is 0.13 of a percentage point higher than the "2" threshold rating that Wilshire gave the Philippines last year.

With the score, the Philippines moved up to 14th in ranking among the 27 emerging markets included in the Wilshire study. The Philippines ranked only 18th in the previous study as the country barely made it to the threshold mark.

For this year, however, the Philippines scored the second highest rate of improvement in scoring from Wilshire. In the process it also beat other neighboring Asian countries, like Indonesia and Malaysia, which each got a score of "2."

The two other countries that enjoyed a higher 0.20-point increase in score were Egypt and Pakistan. Ironically, both countries did not hurdle the threshold with identical scores of "1.8" in 2006 from "1.6" the year before.

Aside from Egypt and Pakistan, six other countries, including China, failed to get passing scores from Wilshire.

Wilshire ranks the countries based on the following factors: political stability, transparency, and labor productivity. Their markets are assessed according to such factors as the level of protection for investors, market liquidity and volatility, red tape, settlement proficiency and the cost of investing in these markets.

The Philippine Stock Exchange hailed Wilshire’s confirmation of the Philippine score, saying this would definitely sustain the already bullish stock market.

"We in the PSE are thankful that our constant efforts to approach CalPERs to ensure that our country makes it to the list did not end up in vain," said PSE president and chief executive oficer Francis Lim.

The benchmark PSEi went up yesterday by 29.47 points or 1.26 percent to 2,370.29 points, its best finish in almost seven years, or after the local index closed at 2,372.05 points on Aug. 4, 1999. Yesterday’s close also marked the third straight day of advance for the PSEi, which serves as the main barometer of local stock price movements.

CalPERS is the largest pension fund in the US and the second largest in the world. While CalPERS has only around $30 million invested in the Philippines out of global portfolio of over $132 billion, the US pension fund is monitored by investors around the globe, and is generally regarded as an authority in the investment community.

The Philippines also retained its "1.0" score in the area of political risk. The Philippines retained this score despite political problems hounding the government.

But the Philippines received better scores for its economic policies. For instance, in terms of return to risk ratio, the Philippine score improved from just "1" in the previous review to "2.3" in the latest study.

In terms of capital market openness, the Philippine score improved to "1.7" from only "1" in the previous review.

The PSE helped the government get an improved score in this issue by dispelling some erroneous perceptions about the country’s business policies.