Santa rally mythbuster more optimistic for PSEi this year

MANILA  —Veteran forecaster Jonathan Ravelas sees the Philippine Stock Exchange Index (PSEi) clawing its way toward a year-end close of 7,100—which would be its highest finish since the middle of the global health crisis in 2021 — despite lingering geopolitical and economic concerns.

However, he also maintained a cautious outlook and advised investors to stay defensive and be ready to seize opportunities as quick sell-offs arising from “fear, uncertainty and disruption” would continue this year.

Ravelas, senior adviser at Reyes Tacandong & Co., is among the analysts who dismissed a potential Santa Claus rally in the final stretch of 2023 as he projected a year-end close of about 6,300. The PSEi ended the year at 6,450.04, which was lower by 1.8 percent than the previous year.

His year-end 2024 PSEi target implied a 10-percent upside over 2023, but still flat over its 7,123 close in 2021.

READ: PH growth expected to accelerate in 2024 amid improving global, local prospects

“The Philippine economy is poised for resilience in 2024, leveraging lessons learned from the past year,” said Ravelas, who is projecting the Philippine economy to grow by 5.6 percent in 2024 and 6.3 percent in 2025.

His full-year average inflation forecast this year is 5.6 percent—versus 6.1 percent in 2023—and 4.5 percent in 2025, both still above the government’s target range of 2 percent to 4 percent.

Ravelas warned that geopolitical and pandemic-related risks the past year would likely spill over into 2024.

“The economy faced headwinds from global economic uncertainties, including trade tensions, disruptions and geopolitical issues,” he said.

READ: More foreign, private partnerships to boost PH growth, group says

He urged the government to boost public-private partnerships to help “unlock synergies, fostering a conducive environment for investment, job creation and sustainable development.”

He also underscored the need to diversify the economy, accelerate digital initiatives and cybersecurity.

“Strategic policies, a commitment to innovation, and collaborative efforts will be pivotal in steering the nation toward a dynamic and sustainable economic future,” Ravelas said.