President Rodrigo Duterte’s effort to patch up with business leaders who earlier crossed paths with him over poor water services last year won wide approval reflected in the stock market index which gained by a substantial 1.79 percent in yesterday’s trading.
The tycoons expressed elation yesterday over the gesture of Mr. Duterte in reaching out to them during a late night address on Monday.
Magnates Manny V. Pangilinan of the Metro Pacific Investments Corp. (MPIC) group and brothers Jaime and Fernando Zobel de Ayala of the property-based conglomerate Ayala Corp. said they were impressed with the President’s statement.
“To the Ayalas and to Pangilinan, I apologize for the hurting words. If you can find in your heart to forgive me because if you do not then I will undercut you. I’ll go direct to God,” Mr. Duterte indicated.
“I’d like to thank you from the bottom of my heart for helping us, you know, to provide the necessities of the moment. I can promise you that I’ll be nice and if you want to see me, we can talk,” the President said in the recorded public address.
“I have gone past being mean because the coronavirus disease 2019 (COVID-19) made me humble. With the kind of response that you made, showed to the public, it’s a humbling experience also for me that, you know, made me realize that we need each other at this time,” the Chief Executive added.
Bourse finds energy
The President’s initiative fueled the Philippine Stock Exchange index (PSEi) to close 99.58 points higher at 5,671.67.
The all shares index finished 1.14 percent higher, to 3,424.98, while the sub-indices closed in green with the exemption of the services index.
“Positive comments from President Duterte in his speech last night toward several business leaders improved the general sentiment and increased optimism, pushing the PSEi higher. He apologized for his harsh words and praised them for cooperating and providing relief during these trying times,” head of research for AAA Equities, Christopher Mangun, said in a daily market note.
“Today’s gains wiped out almost all its losses from yesterday. Investors cheered the renewed cooperation between government and the private sector which overshadowed concerns of geopolitical tensions abroad,” he added.
Shares of Ayala Corp. finished with a 14.73 percent gain while MPIC shares chalked up a 13.55 percent increase. Shares of Manila Water also ended 12.05 percent higher. Maynilad’s parents MPIC and DMCI Holdings also finished higher.
Head of sales for Regina Capital Development Corp. Luis Limlingan said overall, the stock market bounced back as signs of rebound in the oil, technology and utilities were observed across the globe.
At the PSE, trading volumes were higher albeit below average at P5.49 billion. Foreign investors switched to buying stance with P86.52 million worth of foreign inflows, cutting over 20 days of consecutive net-selling.
Considering Tuesday’s gains, Mangun said the benchmark index may move higher in the next days and test resistance at 5,850 to 6,000 level.
Pangilinan, in a social media post cited the President’s “sincerity and kindness.”
“I wish to assure him that our Group is fully committed to being a partner of government in addressing the heartbreaking moments of COVID-19 on our people in building a better tomorrow for them,” the President noted.
“We are, and have always been here, for the country,” Pangilinan assured Mr. Duterte.
Brothers Jaime and Fernando Zobel de Ayala indicated the same appreciation in a statement sent to media. “We are grateful for President Duterte’s statement at the briefing last night. We have always believed in building a strong partnership between the private and public sectors in addressing our country’s problems and in investing in the country to create jobs and improve the lives of Filipinos,” the Ayalas indicated. Both said they appreciate “the recognition of the Ayala Group’s efforts in supporting the administration as it faces the challenges brought by the COVID-19 pandemic.”
President Duterte, in his address, recognized that there would be “a lot of legal issues” between the government and the business owners but added he was willing to be “reasonable” the next time they had a chance to talk.
Water concessionaire Manila Water is a subsidiary of AC while Pangilinan’s MPIC owns a controlling stake in Maynilad.
In December last year, Duterte threatened to file charges against the two water firms for allegedly entering into onerous agreements with the government.
His tiff with Ayala and Pangilinan started after the Permanent Court of Arbitration in Singapore, in its separate rulings, compelled the government to pay P7.39 billion and P3.4 billion to Manila Water and Maynilad, respectively, for supposed losses and damages suffered by the two water firms.
On 7 January, the President gave the two water firms the option to either accept the new water contracts or face cancellation of their present deals.
Since finding out that the contracts were “disadvantageous” to the government and the public, Duterte said he would not hesitate to have the tycoons detained over syndicated estafa or plunder raps and floated the possibility of asking the military to take over water operations.
In March, Duterte expressed willingness to resolve their conflicts with the two water firms.
Settlement in horizon
Presidential spokesman Harry Roque, however, said legal proceedings will continue with regards to the disputed contracts entered by the government with the water concessionaires.
Roque made the remark when asked during a virtual press briefing in Malacañang Palace if President Rodrigo Duterte apologizing to businessman Manuel Pangilinan and the Ayalas for his “hurtful words,” will have any effect on the previous plan by the government to possibly pursue charges against them.
He, however, sees a strong partnership between the government and the private sector particularly in dealing with the coronavirus 2019 (COVID-19) pandemic
Roque, at the same time, said that an on-court settlement could also be explored by the President following his statement Monday night that he is open to talks with the two water firms.
with Francis T. Wakefield