LUXEMBOURG – Finance Secretary Benjamin E. Diokno has promoted emerging investment opportunities in the Philippines to leaders of Luxembourg-based funds and business groups in a Business Forum and Networking Lunch hosted by the Luxembourg Stock Exchange (LuxSE) on October 24, 2023.
“From clean energy to cutting-edge technology, the Philippines is primed and ready to seize emerging opportunities with our partners from around the world,” Secretary Diokno said before top representatives from the LuxSE, Luxembourg Ministry of Finance, Luxembourg for Finance (LFF), Luxembourg Chamber of Commerce, and the Association of the Luxembourg Fund Industry (Association Luxembourgeoise des Fonds d’Investissement or ALFI).
During the Forum, Diokno showcased the Philippines’ impressive economic performance when it posted its strongest full-year growth in over four decades at 7.6 percent in 2022, surpassing the country’s pre-pandemic output level.
The robust performance was recognized by international financial institutions–––the ASEAN+3 Macroeconomic Research Office (AMRO) expects the Philippines to post the fastest growth in Southeast Asia both at 5.9 percent in 2023 and 6.5 percent in 2024.
The World Bank Group also sees the Philippines outpacing its East Asia and the Pacific peers at 5.6 percent in 2023.
“Meanwhile, major international credit rating agencies have continued to affirm the Philippines’ creditworthiness and sound macroeconomic fundamentals,” Secretary Diokno said.
The Philippines has maintained its investor-grade credit ratings from S&P, Moody’s, and Fitch throughout the pandemic. These continue to improve as Japan-based debt watcher R&I recently revised its outlook for the Philippines from stable to positive, while Fitch Ratings upgraded its outlook from negative to stable.
The Finance Secretary also shared with investors the Philippines’ 197 priority Infrastructure Flagship Projects (IFPs) available for partnership, which have a total investment requirement of about US$ 155 billion.
Furthermore, he informed investors of the improved ease of doing business in the country through the establishment of green lanes and reforms to the country’s public-private partnership (PPP) policy environment.
“This PPP Code is the product of close coordination between the economic team and Congress to achieve a unified and predictable PPP policy environment that will facilitate higher quality infrastructure projects in the country,” Secretary Diokno said.
According to the Finance Secretary, transforming the Philippines into a fast-rising investment hub requires greater foreign participation, which drove the government to enhance retail trade and liberalize key sectors including toll roads, airports, expressways, shipping, and telecommunications.
“We have also opened up the renewable energy sector to full foreign ownership. This bold move is seen to open up the floodgates to green investments and green jobs, quickening our transition to a green economy,” Secretary Diokno added.
In line with this, the Philippines recently exchanged financing agreements with the European Union (EU) on the Green Economy Programme in the Philippines (GEPP), which will support the country’s transition into a green and circular economy. Secretary Diokno and EU counterparts are scheduled to sign the agreement in Brussels on October 25, 2023.
Finally, Secretary Diokno introduced the Maharlika Investment Fund –– the Philippines’ first sovereign wealth fund which will serve as a vehicle for driving long-term economic development.
The Philippines and Luxembourg
According to Philippine Ambassador to Belgium and Head of Mission to the EU, His Excellency Jaime Victor B. Ledda, the engagement offers fresh opportunities for Philippines-Luxembourg cooperation, noting that Secretary Diokno is the highest ranking Philippine official to have visited the country in the last ten years.
Honorary Consul General of the Philippines to Luxembourg and President of the LuxSE Alain Kinsch likewise welcomed the Finance Secretary’s visit as a prime moment to forge stronger ties between the two countries.
“The Luxembourg financial centre has a lot to offer to both Philippine and Luxembourg market participants. The Philippines has seen strong economic growth in recent years and is open to international cooperation. I am impressed by the level of ambition, innovation, and speed with which the Philippine Government is delivering on its infrastructure plan with 197 projects worth US$ 155 billion, of which 39 will be undertaken through public-private partnerships. This is a great opportunity also for international investors to access sectors such as, for example, renewable energy, airports or telecommunication in the Philippines,” Kinsch remarked.
Despite the limited exposure of the Luxembourg economy to the Philippines, the Republic’s US Dollar- and Euro-denominated Global Bonds are listed in the LuxSE, with the earliest listing dating back to 1992.
“With its sovereign sustainable bond issuances, the Philippines has helped pave the way for sustainable finance in Southeast Asia, and our role is to promote these sustainable investment opportunities to the international investor community,” said Julie Becker, CEO of LuxSE.
Following the Philippines’ establishment of the Sustainability Finance Framework in 2022, the Republic has since issued three sustainability bonds listed in LuxSE categorized under the Luxembourg Green Exchange (LGX) amounting to a total of USD 3 billion.
The Luxembourg visit was held on the sidelines of the Global Gateway Forum hosted by EU Commission President Ursula von der Leyen in Brussels, Belgium on October 25 to 26, 2023.
The two-day Forum will convene government, business, and civil society leaders from the EU and the rest of the world to debate on issues relating to infrastructure, digital connectivity, energy, and sustainable development.