The Philippine economy will continue to grow and the bulls are projected to prevail in the local stock market next year and onwards, top executives of Sun Life Of Canada (Philippines) Inc. said.
Michael Enriquez, SunLife chief investments officer, said the steady increase in the gross domestic product (GDP) growth is expected to continue with the presidential elections next year.
The economy grew faster in the third quarter, with the GDP increasing by 6 percent from 5.8 percent in the second quarter.
“These are the dividends for a steady economy,” Enriquez said.
Private companies have began to ride on the bullish growth of the economy, by expanding across regions in the country.
Government spending in terms of infrastructure has also increased significantly, the results of which are expected to be seen in the years to come. The rollout of projects under the public-private partnership scheme is also seen to aid in economic growth.
“Definitely, the outlook for next year remains to be bullish. There is still a lot of room for growth in the Philippine economy,” Enriquez said.
STABILITY
Enriquez assures that despite the volatile peace and order situation in parts of Europe, the Philippine stock market will continue to flourish, and will be able to recover fairly quickly.
“Every time markets drop, especially if markets drop because of the sentiments of investors, markets quickly recover,” he said.
A quick market rebound is also seen when problems are global and generally sentiment-driven, he added.
This is based on data collected from previous market drops in the past years, where the Philippines was shown to have been able to rebound quickly if the problem was not domestic or structural in nature.
“It has no direct effect in terms of derailing the economy. In the long term, the economic fundamentals of the country can neutralize external threats,” Enriquez added.
Based on data on the market performance of the Philippines vis-a-vis other developing and developed countries, the Philippine peso has also shown resiliency, he said.
Enriquez attributed this partially to an increase in domestic investors supporting the local stock market.
Currently, over 50 percent of all investments in the Philippine stock market are domestic in origin.
“Foreign ownership has been steady in the last few years but the Philippine stock market has continued to grow. Domestic money has contributed significantly to the steady increase,” he said.
He noted that the Philippines is in a demographic sweet spot, with majority of the population entering the work force and contributing to economic growth.
Remittances from the overseas Filipino workers (OFW) and business process outsourcing (BPO) sectors are also drivers in the consumption growth in the country and are expected to increase year on year.
Inflation levels in the country are still relatively low, Enriquez added.
2020 TARGETS
Sun Life sees Cebu province as a very important location in the company’s expansion plans.
“Perhaps more profoundly, it is the regional center for the Visayas and Mindanao,” said former finance secretary and Sun Life Chairman Jose Isidro Camacho.
The company is looking forward to continuing its recruitment program for financial advisors and increasing the reach of its financial literacy campaign.
Along these lines, Sun Life will be adding a third office in Cebu. Several more offices are also in the pipeline.
The company is also close to closing a power financing deal with a 600 megawatt coal-fired power plant in Mindanao, executives said. This is expected to come to fruition in the third quarter of 2018.
Sun Life president Riza Mantaring also boldly declared that the company’s main goal for 2020 will be to increase the number of individually insured Filipinos to 5 million.
Currently, Sun Life has 1.2 million individually insured people in its portfolio.
Before the end of 2015, the company was able to achieve and even exceed all of its goals, save for the 50 billion pesos in assets.
“But we’re expecting to reach that target before 2015 ends,” Mantaring added.