Taguig City has a new source of pride with the emergence of a new tower housing the unified Philippine Stock Exchange (PSE) on 5th Avenue corner 28th Street in Bonifacio Global City (BGC) district.
The city mayor welcomed the physical merger of the two stock exchanges, which used to operate separately – one as the Makati Stock Exchange, established in May 1963, and the other in the Ortigas district of Pasig City, to where the old Manila Stock Exchange moved from Binondo, Manila, where it was established in August 1927. They traded the same listed stocks of the same companies.
“Welcome to Taguig, your new home,” Mayor Lani Cayetano said at its opening early this week, adding that the city is proud to be part of history.
The new building is two-thirds bigger than the old trading floor in Makati, has a big LED screen covering nearly three floors of the external wall of the 21-story structure, displaying the latest stock prices and other market data in real time.
But more than the pride it brings to its new home city, the unified PSE gives the country a new face for its emerging capital market, as the robust economy also gains stature among peers in Southeast Asia.
Over the decades since the ‘90s until recent years, the two Philippine stock exchanges have been ruled by a few dominant, higher-capitalized brokerages, often bickering over policies and politics. But the Old Boys’ Club is gone, their owners now retired and replaced by the young, agile-bodied smart generation of market players.
The unified PSE in its new home is quite symbolic of the transformation of the Philippine economy from a sickly poult to a winged creature now raring to fly. From being a basket case of Asia to a growth leader in the region, the Philippine economy has been growing at close to 7 percent over recent years and is widely expected to sustain that level of expansion this year and the next as underpinned by strong domestic demand and investment expansion in the country.
Investment growth in the country is seen having the potential to stay robust in the medium term as long as the “Build Build Build” program of the Duterte administration prevails and infrastructure spending rises to 5 percent of gross domestic product (GDP), according to Difference Group founder and CEO Dan Steinbock.
“Investments drive growth – a growth that is also supported by tax reform,” Steinbock, a policy and economic analyst, said at a Philippine Institute for Development Studies seminar on Wednesday. He was referring to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which will fund the government’s infrastructure push.
Economic growth in the country in 2017 was at 6.7 percent, slower than the 6.9 percent expansion recorded in 2016.
For this year, Steinbock sees Philippine GDP still able to maintain that growth at 6.7 percent and in 2019. Meanwhile, the chief economist of Bank of the Philippine Islands (BPI) gave a more optimistic forecast of 6.8 percent growth this year and 7.2 percent in 2019.
Such solid pace of growth has been reflected in the stock market’s recent performance, with the benchmark PSE index hitting an all-time high of 9,041.20 points on January 26 this year. Trading volume has also more than doubled to an average of P9 billion a day from just over P4 billion about two decades ago.
The merged stock exchanges now have a unified board of governors who have been placed in a better position to craft beneficial policies for the market and the investing public.
It is expected to ensure transparency and full disclosure of information for investors to benefit from or take precautions in making market decisions. The PSE management must also help disseminate analyst warnings to the investing public about risks to economic growth, such as domestic political divisions, an escalation of insurgencies, natural disasters and population displacements in the country, as mentioned by Steinbock.
Taguig City’s lady mayor must also keep her word that the local government would do its part in maintaining safe operations there, adding, “We will live up to expectations.”