When President Benigno Aquino III, aka P-Noy, was recently laid to rest on Saturday, stock market participants may be reminded of the bull market that enriched many of them during his tenure.
On July 1, 2010, the first trading day since P-Noy’s inauguration as the 15th President, the Philippine Stock Exchange Index (PSEi) closed at 3,315.26. Three months after his term, the index exceeded the 4,000 mark and also 5,000 and 8,000 levels in the coming years.
During the P-Noy period, PSEi rose to full-time intraday highs 131 times and climbed to full-time highs close to 119 times. At one point, new highs were recorded for seven consecutive trading days.
“I fondly remember the time when I personally sent stock market updates to President Aquino every time the market brought new milestones. We need to give P-Noy credit and his drive for good governance, which fostered political stability and transparency, which translated well into the market’s strong performance, ”said PSE President Jose Pardo.
Apart from shooting up to new heights, it was also during P-Noy’s period that the highest foreign purchases on the stock market were recorded. That was in 2012, when the local stock exchange registered net external flows of P109.98 billion. The highest total turnover value and the average daily value turnover published since 1998 – when PSE began its electronic data recording – was seen in 2013 at P2.55 trillion and P10.52 billion, respectively.
The highest capital raising ever in PSEs also happened under his watch. That was in 2012, when capital raised from IPOs, subsequent offers, share offerings and private placements, excluding the sale of secondary shares, hit P219.07 billion.
“All these stock market records during the time of President Aquino served as strong evidence of the level of investor confidence in his management. The strong macroeconomic fundamentals served as the ideal backdrop for foreign and domestic investors to raise capital and invest in the Philippine stock market, ”said PSE President Ramon Monzon.
P-Noy had also visited PSE a number of times to call ceremonies during his tenure and celebrated the record highs in the stock market.
On June 30, 2016, President Aquino’s last day of office, the PSEi closed at 7,796.25, meaning that during its six-year term, the PSEi had risen 135.2 percent.
Where credit is due
Few may credit the late President Aquino for his administration’s contribution to building new infrastructure, let alone his Public Private Partnership (PPP) program, which the current government did not waste time dismantling in 2016.
Yet days before his death, one of Aquino’s most successful PPP projects came as a surprise, while implementers of President Duterte’s infrastructure program – repackaged under the banner “Build, Build, Build” (BBB) - presented their results so far.
When Transport Secretary Arthur Tugade began to showcase new projects being implemented under Duterte, he chose to open with Mactan Cebu International Airport (MCIA), arguably the most beautiful and busiest airport in the Philippines today.
Duterte used similar flattering expressions when he inaugurated MCIA’s new passenger terminal under its dramatic arched roofs in 2018.
We say surprise because the MCIA extension PPP, which was awarded to Megawide Construction Corp. and India’s GMR infrastructure in 2014, are not mentioned among the flagship BBB projects. Earlier in the presentation, the CEO of the Bases Conversion and Development Authority, Vivencio Dizon, erroneously said that the Aquino administration left “almost zero” projects that they could work on. He probably chose to forget the approximately 50 transfers of Aquino-era PPPs whose remains were canceled or scattered in the BBB pipeline, or was unaware that Tugade would highlight one of these PPPs minutes later. Showing the MCIA was a strong reminder that the current administration has not yet started and implemented a truly defining infrastructure project despite its many achievements.
Ninoy Aquino International Airport modernization was a potential game changer, but this was shelved. Even Skyway 3 from San Miguel Corp. was completed during this period, but was started during Aquino’s presidency.
Aquino’s PPP was condemned, in part because so few projects were completed. In fact, infrastructure projects take many years to complete and may encounter problems with very uncertain results. This is why older projects like the Japanese-funded Metro Manila metro and the north-south commuter train will be completed years after Duterte retires.
What Aquino’s administration proved was that the private sector could be a credible partner in building greater infrastructure if investors felt the rules were fair and transparent.
“The foundation was made in Aquino’s time,” former PPP Center director Cosette Canilao told Biz Buzz.
She said some project approvals took longer due to Aquino’s careful nature.
He asked many questions and wanted to know the projects inside and out, wary of “any potential corruption” that has plagued major projects in the past, she said. The early PPP promises also preceded much of the political framework.
This slowed down the process, leading to much of the criticism that chased PPPs. And yet the private sector has not given up PPPs and shown that they were willing allies in nation-building. In total, the private sector ponyed around P64 billion in premium payments to the government for projects.
The BBB was clearly built on the foundation laid by Aquino and his predecessors. As the Duterte government moves into its final year, the hope is that the next administration will simply follow up.
—Miguel R. Camus INQ
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