The Philippines finance minister Cesar Purisima outlined challenges and strategies for growth at a recent corporate treasury event. He warned that China is building rail links that could cut the Philippines out of trade routes. Purisima outlined plans to push for regional financial reforms to harmonize standards and build infrastructure that outcompetes China. Corporate treasurers and CFOs at the event supported Purisima's vision and said they were expanding operations under current stable economic conditions in the Philippines.

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Home > Analysis > ‘Philippines must out-compete China’
‘Philippines must out-compete China’
Aug 25, 2015 | By Dan Bland | Country profile
Philippines finance minister Cesar V. Purisima and delegates at CT’s recent event in Manila
outlined strategies for growth in the country and how companies will benefit.
“As we speak, China is building rail links from
Kunming to Singapore, from Chengdu to
Myanmar, to cut us out,” Cesar Purisima
(pictured), finance secretary of the Philippines,
warned at CT’s Corporate Treasury and CFO
Summit (CTCFO) in the Philippines.
Purisima delivered a keynote address at the
event on August 4 and framed the most
pressing issues for corporate finance and
treasury heads in the Philippines.
In the midst of a run of 22 successive credit
rating upgrades, Purisima is high on credibility.
In the most recent upgrade on June 18, international credit ratings agencies praised his
administration for tackling the country’s debt, reforming revenue collecting agencies such as the
Bureau of Customs, and increasing budget transparency.
Purisima outlined his plans to push for regional financial reforms at the Asia-Pacific Economic
Cooperation (Apec) finance ministers meeting, which will take place on September 9 in the
Philippine province of Cebu. In particular, his Cebu Action Plan calls for integrated financial
markets with mutual recognition, which would include standards for credit ratings and regional tax
identification numbers.
Specifically, Purisima called for standard public private partnership (PPP) contracts for the
region, with terms comparable to loan contract standards. An Apec contract will give lenders,
borrowers and investors standard terms to agree on, he said.
All this would keep the Philippines relevant as outside developments threaten to upset the
country’s growth run, he said.
“China is acutely aware of the challenges from Asean [Association of Southeast Asian Nations],”
Purisima said. “We have this small issue with them, where they are claiming the whole area
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but we in Asean have to realise our potential and work together to harmonise standards, and
build infrastructure that out-competes them.”
CFOs and treasurers at the event spoke of their regional plans for expansion, which are in line
with Purisima’s vision for the Asean region.
Executives, including bankers and Max’s Group CFO Dave Fuentebella, widely believed in the
peso’s stability and concurred that it would remain within a range of 44 to 47 pesos to the US
dollar. Diwa Guinigundo, the central bank deputy governor, reiterated his readiness to deploy
measures to maintain stability and growth in the country.
Fuentebella, whose company runs the Philippines’ largest casual dining group, including brands
such as Krispy Kreme and Jamba Juice, said he planned to expand under current conditions.
Luis Juan B. Oreta, CFO of Manila Water, was positive about his in-country operations, but said
his regional expansion plans were hampered by a lack of financial services for intra-Asia
businesses. In particular, he said, there was a lack of affordable hedging products in Vietnam.
Bach Johann M. Sebastian, senior vice-president and chief strategy officer for JG Summit
Holdings, is also planning expansion.
JG – a conglomerate that includes consumer foods, real estate and air travel – is looking in
particular to invest in airport infrastructure to help the expansion of its airline and property
businesses.
Multinationals using the Philippines as a regional hub for finance and treasury functions also
praised the country’s policies.
Raphaël Darbellay, head of treasury for Regus International, a global temporary office
provider whose treasury is based in Manila, praised the high quality of local staff, as well as the
country’s solid trajectory. The growth in his profession has been so strong in Manila that he is
planning to start a local treasurers’ club in order to share expertise in the market.
The more than 400 treasurers, corporate finance leaders, bankers, and financial service
providers who gathered at CTCFO were positive about the country’s recent gains. Their interests
were varied and included digital invoicing and advances in financial technology, as well as
infrastructure investment and macroeconomics.
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