Experts forecast bullish Philippine market in 2012
Posted on February 8th, 2012 under Biz Progress
The Philippines could expect a bullish market during the Year of the Water Dragon, business experts said in a forum.
According to Cora Guidote, vice president of SM Investments Corp., the country could have a six-year bullish market because it has very optimistic indicators in business, like the Philippine Stocks Exchange index which hit record highs during the past trading sessions.
She said that other reasons for the optimism is the country’s national debt has gone down while fiscal revenues were stable.
Guidote added that Philippine banks are very liquid and well provisioned, and now have a loan deposit ratio of 45 percent to 80 percent.
The executive said that remittances are also growing by 25 percent to 27 percent.
Guidote also mentioned that the Medium Term Development Plan would be a potential economic growth enhancer if it were effectively implemented.
“Business can do well and do better if the drive on fiscal consolidation and the drive against corruption is balanced with fiscal support for the broader economy through infrastructure and job creation,” she added.
Another growth enhancer would be the agricultural sector, which needs greater support toward self-sufficiency to make it less vulnerable to climate change.
Guidote also said that sunshine industries such as fuel, agriculture, medical tourism, infrastructure (through the public-private partnership [PPP]), alternative energy, green technology (retail, engineering design and architecture), gold trading and information technology will also get a boost this year.
Meanwhile, Gus Cosio, president of the First Metro Asset Management, noted that infrastructure, consumer spending, and recovery in China and Europe were possible drivers for the Philippine market for 2012.
He added that the slow us recovery that will shift to higher gear; continued demand for iron, nickel and chrome ore from China; gold prices strongly supported at $1,500; and a low-interest rate environment were also Philippine market drivers.
University of the Philippines (UP) professor Ben Diokno also discussed external and internal threats that will hamper economic growth of the Philippines.
He said the external threats would be the slowing world economy brought by the European debt crisis; natural disasters in Japan; and the debt problem in the United States.
Another external threat are the geopolitical uncertainty like the political crisis in the Middle East and North Africa; rising oil and food prices; and climate change.
Diokno added that internal threats were the weakening in purchasing power owing to persistent unemployment and underemployment, and rising poverty; government ineffectiveness; perception that the governance problems are not being addressed; and inability to move projects and slow progress in PPP initiatives.
“Our leaders have to design and implement a strong reform programs, but that programs requires strong leadership, an effective and competent government, leaders who will work for the welfare of the majority of the people and a credible and effective legal system and regulatory framework,” the UP professor said.