MANILA – Consumer and banking stocks are poised to benefit this year from the government's tax reform and infrastructure programs, an analyst said Tuesday.
Higher disposable incomes due to lower income tax rates are expected to boost consumption, ATR Asset Management research head Jomar Lacson said.
Bank loans are expected to grow as consumer spending picks up and as the government builds more transport systems, Lacson told ANC's Market Edge with Cathy Yang.
While positive sentiment over tax reform and infrastructure could help stocks rally at the start of the year, Lacson said investors should "temper" their expectations and monitor the implementation of the two initiatives.
"We need to see execution on the government part to be on the spot," Lacson said. The pace of the infrastructure rebuilding been "very good" and needs to stay on schedule, he said.
The full effects on corporate earnings might not be felt until the second half of the year or early 2019, Lacson said, adding, "That’s when expectations and reality start to merge."