33 54 111 219 31 254 195 37 246 139 50 250 192 144 244 186 Capitalizing on ASEAN Integration.

Capitalizing on ASEAN Integration

ASEAN IntegrationWhat are the Opportunities?

What is Government doing?

How can SharePHIL help?

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ASEAN integration an opportunity, not a threat:Philippine Companies can take advantage of favorable ASEAN demographics

Population (thousand

s)

GDP (USD

Billion)Philippines 101,803 269.0

ASEAN 631,858 2,395.3

Opportunity for Phil Companies to tap larger marketPopulation of ASEAN is over six times (6x)

Size of the economy is almost nine times (9x)

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ASEAN integration an opportunity, not a threat:Philippine Companies can take advantage of favorable ASEAN demographics

ASEAN becoming one of the world’s biggest economiesCombined GDP of $2.4T in 2013 (7th largest in the world if counted as one economy)

Will be the fastest growing consumer market with GDP of USD 10 trillion by 2030

Consuming households in ASEAN is expected to almost double by 2025, from 67 million in 2010 to 125 million in 2025.

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The Philippine economy stands out from the rest of ASEANLeads the region in GDP growth

2014: 0.7%2013: 2.9%2012: 6.5%

2014: 6.0%2013: 5.3%2012: 5.0%

2014: 4.6%2013: 4.8%2012: 2.5%

2014: 6.0%2013: 4.7%2012: 5.6%

2014: 5.0%2013: 5.6%2012: 6.0%

2014: 6.1%2013: 7.2%2012: 6.8%

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The Philippine economy stands out from the rest of ASEANLeads the region in GDP growth

INVESTMENT GRADE CREDIT

WITH STABLE OUTLOOK

Rating Outlook

S&P BBB stable

Moody’s

Baa2 stable

Fitch BBB- stable

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The Philippine economy stands out from the rest of ASEANEquity Market remains robust with more room for growth

2010 2011 2012 2013 2014 2015

PSEi Facts7,601.17 pts (up 5.1% YTD) (As of 19 June 2015)

All time high of 8,127.48 pts (on 10 April 2015)

27 Record Highs YTD

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The Philippine economy stands out from the rest of ASEANPhilippine Corporates moving towards bond issuances over traditional bank finance

The non-sovereign bond market in the Philippines has grown significantly over the past six years

In 2014, total corporate debt outstanding was about $28.9 billion or 25% the size of the bank debt market as opposed to only 20% in 2009.

Bank Loans have grown by 14% since 2009 while Corporate Bonds have grown by 19% over the same period.

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I. ASEAN Initiatives - ASEAN Capital Markets Forum (ACMF)

• ASEAN Capital Market Integration Plan

• Streamlined review of Common Prospectus

•ASEAN Corporate Governance Scorecard

• ASEAN Collective Investments Schemes (ASEAN-CIS)

• ASEAN Trading Link

II. ASEAN+ (ASEAN+3, APEC) Initiatives

• ASEAN+3 Multi-Currency Bond Issuance Framework

• Asia-Pacific Regional Funds Passport (ARFP)

Government is making strides to improve regional integrationInternational frameworks will foster more opportunities for capital raising and investing

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ASEAN+3 Multi-currency Bond Issuance Framework

•New regional bond issuance framework which would facilitate cross-border bond issuance within the ASEAN+3 participating economies

•Along with Thailand, various other countries including the Philippines, Japan and Singapore, were identified as possible markets for AMBIF’s pilot issuance

•Philippine companies who want to expand their operations to other countries in the region can easily raise capital through intra-regional funding and investment

•Need for these Philippine companies to follow international metrics of stability and corporate governance


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Japanese bank issues Baht bonds

•Bt 3.2bn ($90m) bond

•Proceeds of the issuance for support of its lending to Japanese and Thai companies through its (Mizuho Bank's) branches in Thailand

•The bank can sell the bond in a nine-month period starting from May 1, 2015.


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ASEAN Trading Link

•New platform designed to link the various national exchanges in South East Asia

•Provides a common access point for the ASEAN exchanges in the network via an inter-connected exchange hub

•Initial phase participants: Bursa (BMB), Stock Exchange of Thailand (SET) & SGX-ST (the equities branch of SGX)

•BMB, SET and SGX represent approximately 2/3 of the USD 2.0 trillion market capitalization of the seven members of the ASEAN Exchanges


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ASEAN Trading Link: Benefits

•A broker in the local market through just the connection to the ASEAN Common Exchanges (the hub) will be able to offer all its clients access to all the ASEAN markets that are part of the Intra-ASEAN Network (provided that broker has accounts setup with the respective sponsoring broker)

•ASEAN investors will have access to a broader and more diverse portfolio of stocks to invest in and at a lower cost than what they might otherwise have to pay


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ASEAN CG Scorecard: How Philippine PLCs performed

•The average corporate governance scores of the top 94 Philippine PLCs by market capitalization rose from 48.91 points in 2012 to 58 points in 2013.

•Of the five corporate governance categories, the most dramatic improvement in average scores on a year-on-year basis was in the Role of the Stakeholders (4.85 points in 2013 compared with 2.80 points in 2012), Disclosure and Transparency (16.03 points in 2013 up from 13.58 points in 2012), and Responsibilities of the Board (19.71 points in 2013 versus 16.36 points in 2012).

Good corporate governance is good economicsPhilippine companies should adopt international standards of corporate governance to gain the confidence of international investors

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Good corporate governance is good economicsPhilippine companies should adopt international standards of corporate governance to gain the confidence of international investors

Thank You

33 54 111 219 31 254 195 37 246 139 50 250 192 144 244 186 Capitalizing on ASEAN Integration.

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