The Philippine Online Chronicles

2011 has been witness to various events such as typhoon Pedring in Metro Manila,

The economy for instance.  Tthe Philippines has done quite well, judging from the performance of the stock market. Investor confidence is on the up and up.

Last year, the Asian Development Bank (ADB) raised the Philippines' economic growth forecast for that year and for this year on the basis of strong investment inflow and consumption. In its Asian Development Outlook, the Manila-based lender said the economy is likely to expand 5 percent this year from an earlier forecast of 4.6 percent last September where growth is expected to be be driven by investment and consumption. The ASEAN region was forecast to have positive growth , the highest being Vietnam at 6.7 percent.

How the Philippines will perform depends on the government on its plans to reduce the fiscal deficit, and improve governance and the business environment. According to ADB country director Neeraj Jain, jump-starting the planned public-private partnerships will give investment a strong boost,"

However, despite the predicted growth , there is still the chronic problem of unemployment which from statistics, fell slightly to 7.3 percent. This explains why majority of Pinoys are still poor. The lack of jobs drove many of our countrymen to work abroad.

For the year 2012, here are forecasts gathered from well-known experts in their respective fields as interviewed by Randell Tiongson, our first Pera Isipan editor-in-chief for POC, and posted in his blog site.

From Marvin V. Fausto, Senior Vice President and Chief Investment Officer BDO:

He is cautiously optimistic for the Philippines in general.

Even with the global economic slowdown, the resilient domestic consumption is being supported by steady OFW remittances and outsourcing revenues. He estimates that the economy could grow anywhere from 4-5 percent GDP.

The financial sector will remain very liquid, coupled with stable inflation rates and low interest rates.. Interest rates are expected to remain stable at around 4-5 percent while inflation is projected to remain benign at 3-4 percent.

As for the stock market, the Philippine stock exchange is expected to trade positively at around the 4,800 level.

Investments will center on infrastructure, agriculture, tourism, and education. Barring any major economic dislocation for the OFWs in the Middle East, US, and European markets, the domestic economy is expected to remain robust for 2012.

From Ms. Riza Mantaring, CEO of Sun Life Financial.

According to Ms Mantaring, there is a lot of uncertainty attached to 2012.  While prospects appear to
have improved over the past few months from the earlier fears of a double dip recession in the US or worsening of the European debt crisis, a number of factors can affect global economic growth — a still bumpy and difficult resolution to the Euro debt crisis, and the political tensions in the Middle East and North Africa..

While 2012 is difficult to predict, there is a strong feeling that the Philippines is in a strong
position to weather the challenging economic and market climate this year. Interest rates are projected to remain low, which should encourage investments, while the robust flow of OFW remittances should continue to support strong private sector consumption.  Even under the best of circumstances though, there is an expectation of volatility given the challenges in the global front.

Equity markets are not expected to post outsized returns.  Still, fund managers who adopt the right trading strategies through the market ups and downs can produce good returns.  For fixed-income, the outlook for rates remaining low underpins the outlook for decent returns.

From Henry Joseph Herrera, former President and CEO of Sun Life

2012: a volatile year for global equities on account of fiscal deficit and debt issues largely in EU and US, slowdown of global economy and its impact on emerging markets, and worsening impact on countries of natural disasters (such as those caused by global warming).

Spikes in interest rates may be in the menu for countries unable to get a handle of their ballooning fiscal deficits and national debts. More country sovereign credit downgrades may be expected.

Investment opportunities abound where financial threats exists. Focus should be on safety and liquidity of invested assets while the “dark clouds” persist. Reduced weighing on risky assets is the prudent approach at this time. The possibility of much cheaper asset prices sometime in the near future is not unlikely. Returns on fixed income instruments will remain subdued, at best, given the low prevailing rates in the country.

From Mr. Joseph James Lago, an RFP and the Head of the PCCI Securities Brokers Corp.

On PSEi: Should the Philippine economy post at least a 5.0% GDP growth in the first two quarters of this year, and corporate earnings continue to improve, the belief is that the PSEi could finally hit the 4,800 level in the 2nd half of 2012.The arguments to a resumption of the bullish trend are weighted on the 1st half of the year as valuation and global economic growth concerns linger.

Peso – US dollar: The dollar’s appreciation is likely to be sustained in 2012 if the US economy continues on a moderate growth path as anticipated. The other push factor is the euro’s loss of allure as an alternative reserve currency given the still unresolved debt crisis. If the 44.70 level is surpassed, the peso could depreciate to around 45.50 – 47.00.

My personal view is that this year will be great judging from the way the stock market is performing at an all time high coupled with the strong performance of our currency. 2012 may not be bad at all. How about you?

Photo: from google.com.ph

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