Public transport key to growth – expert

PUBLIC transportation is needed to spur economic activity because without it, people would not spend their money, a financial expert said on Monday.

BDO Capital and Investment Corp. President Eduardo Francisco, who joined TheManilaTimes online forum held on Monday, said that while the government had provided stimulus to jumpstart the economy, these initiatives would go to waste if private consumption, which accounts for 70 percent of the country’s overall gross domestic product, would continue to lag.

“We’re seeing what’s happening on the ground, and while rates have gone down, people will not borrow if they’re not comfortable, and people won’t spend if they think that the pandemic is going to be prolonged,” he explained.

He said public transportation would encourage businesses to open up and people to spend and invest.

Only the rail systems were allowed to resume operations since the government scaled down the community quarantine in Metro Manila. Public utility vehicles and buses have yet to resume their operations.

Francisco said mall tenants also admitted that public transportation is vital for them to reopen their businesses.

“They feel that the critical factor is the public transportation. If the [government] allows that, of course with proper social distancing, then more traffic will go up, and then some of the tenants will be encouraged also to open more,” he stressed.

Besides spending, Francisco added that the crisis was a good opportunity for Filipinos to invest in equities and bond markets.

“The Philippines is very cheap compared to our neighbors. So, if you want to look for a potentially middle or middle term investment, buy Philippine equities because the upside is going to be very high,” he said, adding that there were a lot of strong companies where people could invest for as low as P5,000 to P10,000.

Francisco said people should take advantage of expected higher yields from government bonds.

“There’s some talk — not confirmed — that the government might raise retail treasury bond. So, if they issue, then again that is another way to get yield. It is very safe so I recommend that,” he said.

Besides government- issued securities, Francisco noted that investors might also look at the telecommunications, consumer and the banking industry.

He also urged consumers to continue to spend “to get everything started.”

“Otherwise, we’re not going to get out of this problem together,” he said.

TheManilaTimes Forum was co-presented by BDO Unibank Inc., Bank of the Philippine Islands, BPI Philam and San Miguel Corp., and sponsored by SM Investments Corp. Its special partners were the Cagayan Economic Zone Authority, Entrego, Maybank and Paymaya.