Policy stability is one of the most critical factors for attracting long-term capital, according to Valentino Bagatsing, chairman and chief executive of Investment and Capital Corporation of the Philippines (ICCP).
Bagatsing, whose company is one of the leading independent investment houses in the country, said while risk is a part of any business, investors struggle with policy uncertainty, especially when rules change during a project.
“You cannot enter into a 20-year project and have the rules change at year five or 10,” he said.
This sentiment resonates in the Philippine capital market, which is underdeveloped compared to its neighbors. The Philippine Stock Exchange lists fewer than 300 companies, while Vietnam has around 750, Thailand over 850, and Indonesia more than 900.
Vietnam once sought Manila’s guidance on setting up a stock market, but its market capitalization is now roughly 70 percent of GDP, several times larger than the Philippines’ market relative to its economic size.
Bagatsing said Vietnam’s rapid expansion reflects not only policy stability but also discipline and predictability, adding that reversals and “predatory roadblocks” quickly erode trust and confidence.
For the Philippines, the message is clear: investors are prepared to manage market risks but require that contractual commitments hold, he said.
This means respecting long-term agreements while allowing for transparent adjustments when the environment warrants it, Bagatsing said.
“The Philippines is not short on opportunity,” Bagatsing said.
“Ultimately, trust in governance is the main driver in attracting long-term capital to build critical infrastructure,” he said.
