Wednesday, April 6, 2005

DBP President Reynaldo G. David Bullish on the Economy

President David expressed optimism about the socio-economic growth prospects of the country during the monthly Exchange Forum of the Anvil Business Club, an association of young Filipino-Chinese entrepreneurs and professionals. The well-attended forum was held recently at the Executive Staff Room with President David as main speaker.
He particularly cited the market’s reaction to the recent ratings downgrade on the Philippines by Moody’s as a basis for such optimism. “On the same day (the downgrade happened), the market reacted. You saw the peso strengthening. You saw the market up. And predictably, the exchange rate, immediately weakened. The market said that the downgrade shouldn’t have happened.”
President David also pointed out improvements in tax collections as another factor influencing his positive projection on the economy. “Commissioner Parayno has done very well — extremely well — that collections are coming in. We have all the laws, it’s a matter of execution. If you’ve heard Sec. Purisima, his statement has always been, we have everything we need, all we need now is execution. And he’s right,” the President explained.
He added that the strengthening of the peso signals improved investors’ confidence. “The peso is very strong. Why is that so? Because investments are coming in. There’s foreign exchange coming in,” he explained.
Value Added Tax
President David also shared his views on the Value Added Tax (VAT) law during the discussion. “The credit ratings people are watching us. Moody’s, Standard & Poor’s, and Fitch. They want to see whether the fiscal discipline is there, whether the wherewithal and the political will is there to make sure that the VAT is passed. Hopefully, it is. If it does, then this country will rise from the ashes.”
He further expounded on the proposed tax measure as a necessary fiscal measure, as he stated: “We’re paying more for our debts today than if the ratings are to improve. You pass the VAT, our ratings will improve, our costs will go down. We can go to 12 percent and bring it back to 10 percent within a certain period. It’s like saying we recognize the problem, we want to help, but make sure that once the help is there, once we have accomplished it, we go back. That’s a good way of doing it.”
“Grab the opportunities”
During the forum, President David presented the Bank’s priority programs, credit facilities, and plans for the year. He also urged the Filipino-Chinese businessmen to support and participate in DBP’s development initiatives.
“I am very glad for this opportunity to show what we in DBP are doing in promoting entrepreneurship, stimulating economic activity, and energizing Philippine development as a whole... If you have the projects in health care, education, housing, community development, production infrastructure, distribution infrastructure, please see us,” he told the group.
President David particularly invited the businessmen to take advantage of the Bank’s environmental management programs, particularly in areas where the tourism industry is flourishing.
“Boracay has a sewage problem. This is an opportunity for you. If you could have a barge that will move the waste from Boracay and from Caticlan, and have it transported to a proper landfill in Aklan, we’re willing to finance that,” he stressed. President David added that business establishments operating in the area such as hotels and resorts will likely support pro-environment initiatives.
“They will have to hook up with you and pay since the environment is their lifeblood. They will not kill the environment that they’re generating their income from,” he noted.
President David also stressed: “Our good financial performance and accomplishments last year have provided us with a huge, critical mass of financial resources, and the strength to sustain our development initiatives in the areas of infrastructure development and environmental protection.”
He announced that the Marketplace for SME Receivables Purchases (M4SME-RP), an electronic trading facility for the auction of SME receivables, is scheduled to operate this year. Explaining the processes of the program, President David assured the transparency and competitiveness of the M4SME-RP, and that it will give entrepreneurs the best possible source of working capital.
“Our M4SME-RP is transparent, market-based, and competitive,” he said. He also identified the various medium-scale industries that the Bank has assisted through its factoring facility, which could be of interest to the Filipino-Chinese business community. Our factoring facility can help SMEs in their cash flow requirements,” he noted.
President David also emphasized: “Our priority is development financing. We want to make sure that we can provide power and water, that we protect the environment, that we build hospitals and schools.”
In the end, he stressed that the Bank’s developmental projects would not only benefit Filipino-Chinese businessmen, but the country in general. “We have a lot of programs. The good thing about these programs is that they rest on the 10-point legacy of the administration. And a lot of these rest on our dreams. We want to fulfill these dreams,” he concluded.
The Anvil Business Club was founded in 1991 with the objective of promoting entrepreneurial courage, professional excellence, leadership, and civic consciousness among its members. Its monthly Anvil Exchange Forum has featured top international and local tycoons, government leaders, scholars, and other achievers as resource speakers.
Article taken from the Development Bank of the Philippines website.

No comments:

Post a Comment