Philippines to further Recover – Sun Life Report

Even in the face of rising inflation and worldwide supply chain disruptions, the Philippines is set to recover over the course of the year.

This is according to Mike Enriquez, Sun Life Investment Management and Trust Corp. (SLIMTC) President and Chief Investment Officer, who recently presented his market outlook for the second half of year 2022.

“We’ve been seeing mobility continue to be sustained in spite of certain COVID-19 scares,” Enriquez said during his Sun Life Investment 2022 Mid-Year Market View.

He further said that with the economy boosted by election spending and the restoration of much business activity as movement restrictions ease, the Philippines continues to be strong despite inflation and interest rate headwinds.

As the increase in the COVID-19 case count have been small, the reopening of the economy will proceed. And because demand for key goods in the consumption-driven economy is inelastic, growth is still expected.

This mean that the consumers are less likely to be deterred by price increases, Enriquez explained. Thus, SLIMTC has projected a gross domestic product growth of between 6.3% and 10% this year.

Enriquez also revealed that there is also room for investment to grow, particularly on the Philippine Stock Exchange index (PSEi). In terms of risk-reward, since the PSEi is cheap right now, there’s a higher upside potential at these levels for the PSEi, compared to downside risk.

“Markets generally move higher during Presidential election years.” Enriquez also said.

The firm sees the peso trading at P51-53 or P52-54 by the end of the year and expects the Bangko Sentral ng Pilipinas to tighten policy by up to 75 basis points by the end of 2022.