PSEi seen to hit 5,500 this year
The local stock barometer will likely hit 5,500 this year as the Philippine economic growth story will continue to support a double-digit growth in corporate earnings and attract large funds seeking higher yield in a low-interest rate environment globally, according to fund managers at Bank of the Philippine Islands.
“The Philippine economy will remain resilient this year despite external headwinds,” said Maria Theresa Marcial-Javier, BPI senior vice president and head of BPI asset management and trust group. She said the country could grow 4.2-4.7 percent this year, accelerating from the modest 3.7-percent expansion last year, on the back of greater government spending.
“Fiscal flexibility will be used to boost the economy but it’s still aligned with the government’s drive to improve fiscal position,” Javier said.
“It’s not unlikely that we will touch investment grade this 2012. We still have to retrace our best years but I think the direction is favorably pointing toward improving revenue and tax effort that contribute to further positive view for credit-rating agencies,” she said.
Javier added that the country’s inflation rate would likewise remain benign—averaging 3.5-4 percent this year, leaving the Bangko Sentral ng Pilipinas with enough room to extend its accommodative monetary policy.
Domestic consumption would also remain robust, Javier said, supported by remittances. While growth in remittances could soften to 5 percent this year from 7 percent last year as this segment was “already tapering or maturing,” she said a “sunrise” industry for the Philippines would be business process outsourcing.—Doris C. Dumlao