GMA victory seen to inspire investors’ confidence in RP

While Philippine exports are gaining ground this year, investors are still concerned over the lack of investments in the all-important electronics sector.

Expecting the "likely victory" of the incumbent President Arroyo, investors said it was possible for the new administration to inspire investor confidence but critical areas of power and utilities have to be addressed.

In a report by the Emerging Markets Sovereign Debt Research of the New York-based Bear, Stearns & Co. Inc., investment experts said the electronics sector, particularly, has not been able to recover its performance in the 1990s.

"The major reason for this has been the evaporation of new investment," said analyst John Stuermer. "The (industry) is targeting $1 billion of new investments in 2004 but then $1 billion was targeted in 2003 and only $230 million was realized."

"Hopefully, the likely victory of President Arroyo in the presidential elections will give greater confidence to industry investors," Stuemer said.

"For this to happen, though, her government will have to improve its performance in a number of areas," he added.

Stuemer said the privatization of publicly-owned power companies through the new senate would therefore be an important early test for the newly-elected president.

Electronics, Bear Stears reported, accounted for 67 percent of Philippine exports in March.

Semiconductors, which accounted for 47 percent of electronics, recovered from the slump in the first two months of the year, increasing by 6.4 percent in March.

For the whole quarter, electronics rose by 6.02 percent and semiconductors were essentially flat, growing by only 0.36 percent.