The President at Davos 2023: Highlights and issues raised

The World Economic Forum (WEF) concluded its Annual Meeting for this year last Jan. 20, after a five-day convention of government and business leaders across the world, including Philippine President Ferdinand R. Marcos, Jr. and several other government officials as well as the country’s prominent tycoons.

Held in Davos, Switzerland, the 53rd WEF Annual Meeting was themed “Cooperation in a Fragmented World.” It aimed to serve as a platform to participate in dialogues and help find solutions through public-private cooperation.

During the annual meeting, Mr. Marcos talked about the state of the country’s economy, among others, as well as secure some investments on the sidelines.

The president also joined in a High-Level Dialogue on “Investing in Infrastructure for Resilience” and opened a panel session on “Moving Towards Nutrition Security,” as the Presidential Communications Office (PCO) reported.

PHL economy

In his opening remarks during the Country Strategy Dialogue at the WEF, Mr. Marcos highlighted the strength of the Philippine economy.

The PCO said the President cited the 2023 global economic growth projection of the International Monetary Fund (IMF), which is expected to be at 2.7%, slower than the previous year’s 3.2%.

“But for the Philippines, we project our economy to grow by around 7% in 2023. Our strong macroeconomic fundamentals, fiscal discipline, structural reforms, and liberalization of key sectors instituted over the years have enabled us to withstand the negative shocks caused by the pandemic and succeeding economic downturns and map a route toward a strong recovery,” Mr. Marcos was quoted as saying.

“We have seen inflation accelerating globally in recent months… We are mindful that while protectionist policies may be appealing, even necessary in the short term, there will ultimately be no long-term winners… We join the call for all governments to unwind any trade restrictions and reinforce our commitment to the World Trade Organization (WTO) reform,” he added.

Initiatives being carried out for the country’s continued recovery and making it more conducive for business were also shared by Mr. Marcos to investors during his opening remarks, the PCO said.

Mr. Marcos also claimed on Jan. 21 that economic leaders at the WEF tagged the country as part of the “VIP Club” of Southeast Asia for its economic performance.

However, IBON Foundation conveyed dismay over the Palace’s bullish assertion regarding the economy. In a Jan. 22 report by BusinessWorld, the think tank said that “facts show that last year was a tough one for poor and middle-class Filipinos.”

IBON also said that the relatively rapid growth seen in 2022 is a “misleading indicator of the economy’s trajectory,” as it was merely “a rebound from reopening and there was a statistical boost from being measured against the low base of an economy pressed down by lockdowns.”

The Philippine economy grew by 7.6% last year, according to data released by the Philippine Statistics Authority on Jan. 26. Last month, the government lowered its 2023 growth target to 6-7%.

Investment commitments

During the WEF, Mr. Marcos also secured investment pledges from at least two foreign companies.

According to PCO, the president met with Gokul Laroia, Morgan Stanley’s chairman for Asia-Pacific, on the sidelines of the annual meeting.

Mr. Laroia told Mr. Marcos that the investment management and financial services firm would set up an office in Manila, and swore to support the government’s development initiatives.

The Malacañang also said that the President secured an investment commitment from DP World. The Emirati logistics company is looking into setting up an industrial park in Clarkfield, Pampanga.

“We are committed to investing in the Philippines. We’re committed to expand,” Chairman and Chief Executive Officer Sultan Ahmed bin Sulayem told the President on the sidelines of the WEF, according to the Palace. “We’re interested in the Philippines, in industrial parks.”

DP World currently operates ports in Manila and Batangas.

Despite these commitments, investment analysts were unimpressed.

“Investment pledges are always good, but until we actually see these pledges on the ground and start to get implemented, only then can we realize and reap real benefits,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., told BusinessWorld in a report last Jan. 20.

Meanwhile, Terry L. Ridon, a public investment analyst, said that Morgan Stanley’s commitment to building an office in Manila “does not constitute a commitment to undertake foreign direct investment (FDI) in the Philippines.” He said that the investment bank’s primary business covers portfolio investments and not FDIs.

He also said that DP World is “already well-established” in the country, and that the President does not have to go to Davos if only to persuade the logistics company to expand its operations here.

“In the final analysis, the president’s Davos trip should be judged based on the total cost of funding the delegation against actual investment pledges originating from the WEF itself,” Mr. Ridon was quoted as saying.

“It is difficult to put a specific number on the value of raising the president’s and the country’s international prestige through Davos, because this can also be done in other more significant and consequential international meetings and conferences,” he added.

Invitation to tech-collab center

Another highlight of the Philippine delegation’s attendance to Davos, WEF Founder Klaus Schwab had a meeting with Mr. Marcos as well, inviting the Philippines to join a technology-sharing center to be established by the WEF.

“When we inaugurate it, we will invite the Philippines to be amongst the first countries to (take) residence (and) showcase your investment opportunities in a much more effective manner compared to video conferencing because you bring people into the next (stages) of what’s happening,” Mr. Schwab was quoted as saying.

He told the President about the many discussions on the internet about three-dimensional, virtual interaction communities, joint with artificial intelligence, driving WEF to develop a global collaboration platform.

“We have all the representations of some countries, of companies and you can interact every time,” he said.

According to PCO, Mr. Marcos said he would task the Department of Information and Communications Technology (DICT) to engage with the WEF as the organization hands over materials to the country as a starting point.

Sovereign wealth fund

The proposed sovereign wealth fund was also pitched by Mr. Marcos at the WEF, saying that it is one of the government’s efforts to diversify the country’s financial portfolio, according to PCO.

The President further talked about setting up a sovereign wealth fund in a breakfast meeting with international CEOs on the sidelines of the WEF. According to PCO, the President said that setting up such fund is a “good idea” to leverage government assets and pursue big-ticket infrastructure projects, especially in the agriculture and energy sectors.

The proposed sovereign wealth fund, or the so-called Maharlika Investment Fund bill, has been swiftly approved by the House of Representatives on Dec. 15. And recently this month, through Senator Mark Villar, a bill to create the Maharlika Investment Fund has been filed in the Senate.

Several critics and analysts have raised concerns over the controversial sovereign wealth fund.

The WEF Annual Meeting was held on Jan. 16-20. Along with Mr. Marcos and other government officials, the convention was also joined by seven of the country’s biggest tycoons to support the president’s participation. These businessmen included Sabin Aboitiz of Aboitiz; Kevin Andrew Tan of Alliance Global; Jaime Zobel de Ayala of Ayala Group; Lance Gokongwei of JG Summit Holdings; Ramon Ang of San Miguel Corp.; Teresita Sy-Coson of SM Investments; and Enrique Razon of International Container Terminal Services, Inc. — Chelsey Keith P. Ignacio