MANILA, Philippines – The entry of a new administration in 2016 will affect businesses due to policies that the new president will adopt, an expert said.
Victor Limlingan, finance professor and chairman of Regina Capital Securities, said the interrelation of political analysis and security analysis is a factor that should be considered in the stock market outlook leading into the 2016 elections.
“A lot of things can happen but I guess booking the profit can happen between now and probably six months before the election. By then, if there is a clear winner, then some of the money will come back depending on who is the leading candidate,” he told ANC on Monday.
Limlingan cited the volatility in the price of Petron Corp.'s shares depending on who was sitting as president. Petron had its IPO in 1994.
“It went through several presidents and the price of Petron varied depending on the policies of the president. Petron was a part of the privatization program of then-President Ramos and its IPO (price) was at P16,” he said.
Under the Estrada administration, Limlingan said Petron shares began losing value and went down below P1, before eventually recovering during the Arroyo administration.
He also cited the approval of the sin tax bill, which is expected to affect profits of alcohol and tobacco products.
“Political analysis is quite important especially on specific policies that the president will adapt. They affect one sector, and sometimes benefit other sectors,” he said.
Limlingan said that one of the possible presidential candidates in 2016, Vice President Jejomar Binay, has been known to be “favorable to business,” but noted that he saw business merely to finance his social programs.
“He will try to say, ‘I will make business grow but I’ll make businesses pay the right taxes so that I can use it for social benefit, education, medicine and so forth,'” said Limlingan.
Binay served as the mayor of Makati, the country's central business district, before becoming vice president.
Limlingan added that one of the challenges that the new administration will face in 2016 is to make growth inclusive.
“One of the things that the new administration will probably have to deal with are the social issues, not so much as the business policies,” he said.