Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B. Buenaventura belied reports yesterday that Philippine bonds are losing their attractiveness to investors.
In fact, Buenaventura said there are a lot of offers from various financial institutions to underwrite future Philippine bond offerings.
He pointed out that while the spreads of Philippine bonds appear to be widening, it is only because the base has reportedly narrowed. Based on last quotes on Philippine bonds, the spread over the comparable US Treasuries has widened to 320 basis points.
Buenaventura, who just came back from a World Economic Forum held in Davos, Switzerland, said that the picture of the Philippines is being painted worse locally than it is being painted abroad.
The mood abroad according to Buenaventura is more positive. He said that "we are more cynical" and that "we should start looking at the glass as half full, instead of as half empty."
The three main concerns of foreign investors, Buenaventura said, are the passage of the Retail Trade Act, the revised General Banking Act and the Revised Securities Act.
There was also some concern about the government's fiscal position.
Local analysts and some foreign analysts, however, said that foreign investors are shying away from the country due to what they called "crony crooks" of President Estrada, the two different set of rules that apply for the President's cronies and for all others and Finance Secretary Jose T. Pardo's still unclear policies on financial matters.
They pointed out that Finance Secretary Pardo appears to be deferring too often to Buenaventura on matters of interest rates.
Likewise, Pardo has not clearly outlined his planned policies.
Buenaventura said some of the foreign investors he talked to in Switzerland were even disappointed with the President's decision to drop the constitutional economic reforms.
However, Buenaventura said, he assured them that the President has not abandoned those reforms and is instead prioritizing the "doable" items first.