Investors laud GMA's fiscal reforms; unfazed by scandals

The brewing political battle in the Philippines these days, has not at all affected the investors' outlook in the country contrary to some forecasts, an international economic analyst said.

However, the current administration led by Gloria Macapagal Arroyo, who, including her family is hit by scandalous issues, should carefully manage the reforms very well, in order not to be shaken by the negative issues which primarily aimed at snatching Arroyo's presidential seat.

Standard Chartered Bank senior regional economist Mike Moran said that investors are more interested on how the Arroyo government is implementing the reforms to build a strong economic foundation in the country, and not being distracted by the temporary political squabble.

He said investors are already "immune" to the various issues that try to pull down whoever is taking the Presidential throne in the Philippines, thus what is important to them is how the current administration is working out to save the country's ailing economy.

This means, he said that the Philippines still continues to take the spotlight at preferred investment sites, despite its current situation.

Moran said the foreign investors applauded Arroyo's quick implementation of reforms and was able to immediately put the "once shattered" economy, back on track.

However, he warned that prolonged political uncertainty could affect the investors' decision and interest.

"Political stability still tops investors' priority list and situation is monitored carefully by offshore funds," he said emphasizing that the recent issue still has not wiped out strong confidence of potential investors to the Philippines.

Investors in the United States, as well as Europe are still looking at the Philippines as attractive investment site, because of the good reform play implemented by the Arroyo administration.

"What the Philippines has to offer now is its good reform play story, your economy is getting back on its feet," he said.

Early this week, the Philippine Stock Exchange (PSE) announced that foreign investors remain upbeat of the country's macroeconomic fundamentals despite the scandals that rocking the Arroyo administration.

PSE president and executive officer (CEO) Francis Lim was quoted saying that foreign investors continue to look at the Philippines as alternative investment site given the country's improving fiscal performance.

Lim based his announced on a separate assessment made by London-based Fitch Ratings and broker firm UBS Securities Asia, which report indicated that Philippines still attractive to foreign investors.

Likewise, ATR-Kim Eng Securities report said that investors abroad seem to be able to discern the fundamental changes taking place from what is simply a political noise.

"This is because the sequence of recent events is not something that is wholly new. What foreign investors see is that positive steps have been taken to stabilize the government's finances and this is being taken favorably," said ATR-KES.