MANILA, Philippines – Despite choppy trading at the Philippine Stock Exchange for the past two weeks, an analyst believes investors still have confidence in the market.
Nestor Aguila, chairman of DA Market Securities Inc., said investors will be back to investing in Philippine stocks after two weeks of foreign selling, on better economic prospects in the second quarter.
Aguila said the market correction is still healthy with the index still within its target range of 6,500 to 7,000 for the year.
“From the start of the year, we were saying that if we make 6 percent in the Philippine market for our funds, we're good. The market did 14.8 percent already, as of now. Second, the foreign fund managers sold $18 million worth in total just to take profit, so that's good. They will be back because they made profit. Third, this corrective position in the market is very healthy,” he told ANC on Monday.
Aguila said a “golden age” for the Philippine economy will likely occur in the next 10 to 20 years, citing the country’s young demographic and change in spending habits.
“We’re going to see a golden age very soon, maybe 10 or 20 years from now. On my travels to China 10, 20 years ago, I saw the same thing, wherein the younger group is spending more because they had more money, and started aspiring for better products,” he said.
He added that aside from consumer spending and infrastructure, the economy may see a boost from township projects, which he described as “new spending machines,” particularly in Visayas and Mindanao.
“All these conglomerates, take a look at what they’re doing now, they’re expanding all the way to the south and those are the growth centers that we do not expect a big contribution but we will be alarmed because from now, based on the studies they’ve presented, offer the highest growth,” he said.
He also expects the Bangko Sentral ng Pilipinas to maintain key interest rates in its June 19 policy meeting to help boost growth.