Pressure mounts on government to deliver

through it,” Jose Mari B. Lacson, head of research at ATR Asset Management, Inc., said in a telephone interview.

“So far, actions are speaking louder because initially we were focusing on words.”

The dust has settled and there are some encouraging signs that Mr. Duterte can deliver on his promises, analysts said.

The House of Representatives in end-May approved the first of up to five tax reform packages just before Congress adjourned the first regular session, after the President certified the bill as urgent. Investors cheered the bill’s progress, driving the PSEi’s ascent back to the 8,000 level.

The government has started to roll out big-ticket infrastructure projects, with the Department of Transportation marking the first five stations of the P255-billion railway project from Manila to Clark. Construction is set to start in the last quarter of 2017.

“As of the moment, they (infrastructure projects) are still in the realm of what could be,” Philstocks.ph Senior Analyst Justino B. Calaycay, Jr. said in a separate interview.

“We’re hoping government can ramp up spending. Remember that the principal criticism of the previous administration was it kept underspending… It looks like in the first year of the Duterte administration, ‘ yun pa rin ang nangyayari (that was still the norm).”

Mr. Calaycay was referring to weaker government spending in the first quarter of 2017 that was partly to be blamed for the softerthan-expected economic growth of 6.4%, signaling that the government’s P8-trillion infrastructure program is struggling to take off.

All eyes will be on the secondquarter gross domestic product data and corporate earnings results, as investors search for fresh drivers to give the stock market enough gas to stay beyond the 8,000 level.

“There was too much money that was thrown in the national elections; consumption spending was off the charts. Right now, all that throwaway money is gone and what were seeing is the organic growth of the economy. It’s still high at six percent,” James S. Lago, head of research at PCCI Securities Brokers Corp., said in an interview.

Risks are aplenty down the road. Changing the laws that will cut personal and corporate income tax rates and increase consumption levies in order to compensate and help fund the government’s massive infrastructure push is proving to be challenging since it took the House roughly eight months to pass a watered-down version of the bill, Philstocks’ Mr. Calaycay noted.

The siege in Marawi City has reached its fifth week and investors, who initially ignored Mr. Duterte’s decision to place the southern island of Mindanao under martial law, have begun to worry that security concerns could distract the government from its economic reform agenda or even upset the fiscal balance.

“It is creeping into the minds of the people. It’s starting to become a real concern. Businesses don’t thrive on such uncertainty,” Mr. Calaycay said.

Still, some business leaders gave a generally positive review of Mr. Duterte’s term so far.

“He is action- oriented, decisive and business-friendly… We should remain optimistic,” said Manuel V. Pangilinan, managing director and chief executive officer of First Pacific Company Ltd. that controls PLDT, Inc.; Metro Pacific Investments Corp. and Philex Mining Corp.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

“They are on the right course. One thing going well is we have a President who is addressing the problem of peace and order. It does more comfort to people like us,” said Prudential Guarantee & Assurance Chairman Robert G. Coyiuto, Jr.

Phoenix Petroleum Corp. President Dennis A. Uy — who hails from Mr. Duterte’s bailiwick, Davao City, and who is building an integrated casino in Cebu and listing his logistics business — noted that “[w]hat the President wants is to strengthen the middle class. It will be the fulcrum of the economy.”

“This means more people have money, no drugs and less crime.”