Policy stability: Essential in attracting long-term capital

Policy stability is among the most critical factors in attracting long-term capital, according to Valentino S. Bagatsing, chairman and chief executive officer of Investment and Capital Corporation of the Philippines (ICCP), one of the leading independent investment houses in the country.

Bagatsing stressed risk is part of any business endeavor, but what investors have trouble with is policy uncertainty, especially when the rules change halfway through. “You cannot enter into a 20-year project and have the rules change at year five or ten,” he said.

That message resonates strongly in the Philippine capital market, which remains underdeveloped compared to its neighbors. The Philippine Stock Exchange lists fewer than 300 companies, while Vietnam has around 750, Thailand over 850, and Indonesia more than 900.

Vietnam once sought Manila’s guidance on setting up a stock market, but today its market capitalization is roughly 70% of GDP, several times larger than the Philippines’ market relative to its economic size.

Bagatsing said that Vietnam’s rapid expansion reflects not only policy stability but also discipline and predictability. He points out that reversals and predatory roadblocks quickly erode trust & confidence.

For the Philippines, the message is clear: investors are prepared to manage market risks but require that contractual commitments hold, Bagatsing emphasizes. This means respecting long-term agreements while still allowing space for innovation and transparent adjustments when the environment warrants.

“The Philippines is not short on opportunity,” Bagatsing adds. Ultimately, trust in governance is the main driver in attracting long-term capital to build critical infrastructure.”