The President particularly noted with optimism the resurgence of portfolio investments in the Philippine Stock Exchange (PSE) where trading for the past few days has been bullish, with the market advancing by more than 25 percent since Jan. 17.
The President cited the robust recovery of the country’s stock market as one of the concrete achievements of her one-year old administration which has been able to woo back portfolio investments, otherwise known as ‘hot money,’ following the Best World Resources "insider trading" scandal that rocked the market, resulting in capital flight during the Estrada administration.
She admitted, however, that capital flight continued at the PSE following the Sept. 11 terrorist attacks in the US last year.
"Our stock market is at its five-month high. It is back to the levels before Sept. 11," President Arroyo said.
Digressing from her prepared speech during the opening of the Second National Convention of the Chinese-Filipino Business Club Inc. (CFBCI) at the Ceremonial Hall of Malacañang yesterday, President Arroyo disclosed that in a conversation with Dante Go, president of CFCBI, she cited an article that appeared at The Analyst stating that trading last Wednesday rose 39 points "because the Americans are here," referring to the arrival in the Philippines of the American troops participating in this year’s RP-US Balikatan joint military exercises in various parts of the country.
President Arroyo quoted Go as saying that it’s not because the Americans are here but because confidence is back.
President Arroyo said her administration has regained the respect of big foreign investors and this is a clear signal that the Philippines is "back on the radar screen," especially in the international business and investment community.
"The same signal that has been sent by the increases in the very large rallies in our stock market, last Friday and Monday, that certainly put the Philippines on the radar screen," the President told Palace reporters.
Last Friday, she noted, the trading rallied that day by 40 points which was the highest since Jan. 22, 2001.
"The highest is the day I became President, the first stock market day. And then last Monday, another 40 points. And this is mostly coming from outside," she cited.
"So even for portfolio investors, we are on the radar screen. For direct investments, we are on the radar screen," the President said.