MANILA, Philippines - The Philippines remains among the better growth stories in Asia as its economy is expected to continue heading north despite bumps caused by the onslaught of natural calamities, officials of Canadian insurance giant Sun Life said.
Michael Oliver G. Manuel, Sun Life’s managing director for Asia, said fund managers consider the Philippines as one of the better growth stories in the region.
“According to fund managers, it is one of the better stories in Asia, but also among the more expensive in terms of price-to-earnings (P/E) ratio,” Manuel said in a press briefing.
Manuel pointed out that emerging market outflows are returning to the developed markets as seen by large capital outflows from the markets.
He said developed markets such as Japan and the eurozone are now expected the draw the main bulk of emerging market outflows.
“Japan and the eurozone are still recovering; interest rates are still high, fixed income rates are still low,” he pointed out.
“There will be growth in these markets, but fund managers this time will have to be selective.”
Meanwhile, Sun Life officials said the Philippine economy is seen to grow by a slightly slower 6.3-percent pace this year, from 6.5 percent in 2013.
The government expects gross domestic product (GDP) growth last year at the upper end of the target 6.5- to seven-percent range. However, its 2014 growth forecast would likely be trimmed down from the earlier 6.5- to 7.5-percent range due to the impact of recent calamities, particularly Super Typhoon Yolanda.
Sun Life Financial chief investment officer Miquel Gerard D. Enriquez said he expects the local bourse to continue strengthening as domestic and global interest rates remain depressed.
“In the short term outlook, the Philippine Stock Exchange index (PSEi) at 6,000 is a good level, and if the full year 2013 corporate earning reports reflect strong results the index could strengthen further to 6,500,” Enriquez said during the same press briefing.
Inflation is forecast to stay with the Banko Sentral ng Pilipinas (BSP) range of 3.5 to four percent while the peso will remain weak at 45 to 45.50 to the dollar.
He added that domestic and foreign fund managers are still focused on the equity market over the fixed income or bond market.