On Headwinds and Prospects for the Philippines and Having More Women at the Table

On the morning of March 30, 2023, I attended the very first face-to-face membership meeting of the Institute of Corporate Directors or ICD at Ascott Makati.  

As keynote speaker, we had former Governor of Bangko Sentral ng Pilipinas (BSP) Amando M. Tetangco Jr. who delivered his 2023 Philippine Economic Outlook, entitled “Headwinds, Policy Responses and Prospects.” Overall, he believes that things are looking up for the country, despite the economic shock brought about by the COVID-19 pandemic. He attributes this to the “whole-of-government” approach that the country took, including the BSP’s extraordinary liquidity measures, such as provisional advances, remittance of dividends to the National Government, and purchases of government securities in the secondary market. In total, the BSP injected about P2.2 trillion in liquidity to the financial system as of April 27, 2022, which is equivalent to 11.2% of nominal GDP in 2021! 

According to Gov. Tetangco, the Philippine economy performed strongly and continues to show bright prospects. The Philippine banking system remains on solid footing, with 15.8% adequate capital buffer as of Q3 2022, 5.5% ample liquidity as of January 2023, 106.3% high-coverage ratio of non-performing, 9.4% assets further expanded, P17.3T deposits and 11% sustained lending all as of Jan. 2023. Sounds good!

However, Gov. Tetangco cautions that while there is headway on post-pandemic recovery, the near-term outlook is fraught with fragilities and uncertainties that require the country to be vigilant on economic headwinds. These include subdued global prospects, persistently high inflation, geopolitical tensions such as those between Ukraine and Russia and between China and Taiwan, the banking trouble in Europe and the US (Credit Suisse and Silicon Valley Bank travails), and debt distress.  

What made this event more interesting was the panel that followed, with ICD Fellows former banker Antonio M. Cailao, Ayala Land Inc. Director Antonino T. Aquino, and Opal Portfolio Investments (SPV-AMC) Inc. President and Execom Member Imelda C. Tiongson or Ida and ably moderated by Metro Pacific Hospital Holdings, Inc. Vice President Racquel R. Cagurangan.  

Because it is Women’s Month and many women’s business groups were present in the audience—such as Women’s Business Council Philippines (WomenBizPH), Network of Women Corporate Directors (NOWCD), the Management Association of the Philippines (MAP)’s Women’s Committee (and the Filipina CEO Circle)—Ida zeroed in on the importance of helping MSMEs, especially those that are women-owned and women-led because they make up the majority. She also suggested that digitalization is key to ensuring transparency, so much so that it would be possible now for companies to track financial transactions and actually pay proper taxes (comparing ESG to biblical tithing, or giving back a certain portion to the community, which can have a domino effect as far as equity, equality, and trickling down effect of income). Digitalization and governance go hand-in-hand.

Tony Aquino urged private organizations to do their part in supporting social enterprises to address the poverty issue and to leave the “ayuda” or handout to the government. For instance, he mentioned that Ayala Malls the country over are allowing MSMEs to set up stalls in their malls free of charge to give them a leg-up. With each of those MSMEs giving jobs to ten people, then there is definitely a multiplier effect. Now, if each of the organizations represented by the ICD directors present and the members of MAP did their part in helping social enterprises, then the multiplier effect would be even greater.

Chairman Emeritus Dr. Jesus P. Estanislao asked Gov. Tetangco pointblank if he felt confident that the good record that the country has been experiencing will continue for the next three years given the risk factors. Gov. Tetangco said he was quite optimistic as far as the monetary authorities are concerned because we had the framework, tools, and the people in place. He noted that there are still many long-serving central bankers in the BSP today who are very much aware of what is needed to sustain this in the next few years and to train the new central bankers on work ethic, governance, and commitment to the mandate of the institution. Having the right leader is also important, he stressed, one who is not a politician and who does not owe any political debts to sponsors so that the leader can remain independent, implement good governance, and promote financial inclusion in the country.

Tony Cailao urged people to become more involved in Dream Philippines, the vision of the Institute of Solidarity of Asia chaired by Dr. Estanislao, where there is enough for everyone, where no one is left behind in poverty, and where Filipinos can attain their dreams and highest potential because government institutions practice good governance and actually serve the people instead of themselves.  

After the panel discussion, ICD inducted the fellows of the past three years. During the pandemic, I enrolled in ICD’s Professional Corporate Directors Program. Although I have served on various boards before, including the Philippine Tourism Promotions Board, the Philippine Association of Convention and Exhibition Organizers and Suppliers, Inc., and the Women’s Business Council Philippines, Inc., among others, I had never really taken a formal directorship course. I passed the six-week course and the written and oral exams that took place after and was accepted as a Fellow of the Institute of Corporate Directors in 2021. But because the pandemic lockdown was still in place, my batchmates and I didn’t get to be formally inducted until today.

I was pleasantly surprised when they called woman after woman to the stage. Pretty soon, there were 11 of us and nine men. What a huge statement this is for Women’s Month, I thought. With more women directors at the table, boards will benefit from a greater diversity of experiences, points of view, skills and strategies, and subsequently, better governance, and better results for the organizations.  

According to the International Finance Corporation, various research have shown that having gender-diverse boards and senior leadership is positively correlated with better financial and non-financial performance, resulting in company growth and better environmental, social, and governance performance. It just makes better business sense, as boards that represent their customer base are more attuned to what the market needs, especially since women make up more than half of global purchases.

However, women are still under-represented on boards. Deloitte Global’s 7th edition of Women in the Boardroom Report, released in February 2022, shows women holding a global average of 19.7% of board seats or an increase of 2.8% since 2018 compared to a 1.9% increase from 2016 to 2018. A study by the ICD shows that in the Philippines, the actual average ratio of female and male directors for all publicly-listed companies is 19:81 or 19% in 2021, a slight increase from the 17:83 ratio or 17% in 2019. 

This new crop of women fellows will definitely increase the available bench of candidates for gender diversity on boards.  

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