Philam Life sees stock market surge in 2013

The country’s corporate sector is up for another positive year in 2013, with publicly listed firms expected to post double-digit growth in incomes, and with the main index PSEi seen to hit the 6,000 mark.

This was according to insurance firm Philam Life, which projected that firms listed on the Philippine Stock Exchange would post an average net income growth of 13 percent next year from the already respectable 9 percent anticipated for this year.

The insurer also said the index may hit a new high of at least 6,000 next year on the back of a favorable performance of the economy and amid “several” initial public offerings (IPOs) in the pipeline, which could attract investments in equities.

“What investors have been quite excited about in the Philippine stock market is that the economic growth that we have experienced so far appears to be on an upward trajectory,” Eduardo Banaag Jr., first vice president and equity fund manager of Philam Life, said on Wednesday in a press briefing.

He said growth of the Philippine economy in 2013 may be faster than this year. The government expects the economy to grow between 5 and 6 percent in 2012.

Philam Life gave its projections as it reintroduced its “Money Tree” product, which is an insurance policy with an investment feature. It said Filipino consumers are encouraged to take advantage of the income opportunity from the stock market, whose performance is largely influenced by that of the economy.

Money Tree policyholders, while enjoying insurance protection, also may earn from investments in equities or fixed income securities. Investors may choose to have their money placed in either of the three funds, namely the equity fund, the fixed-income fund and the balanced fund, which are all offered under the policy.

“Filipinos have money to spend, especially as remittances continue to grow and as businesses register higher profits. However, there is a big [income] opportunity loss because people tend to put most of their [extra] money in banks,” Anthony Bernabe, vice president for marketing at Philam Life, said in the same briefing.

Officials of the insurance firm noted that some P4.1 trillion is placed as banks deposits earning very low interest rates.

Philam noted regular savings deposits in banks earn an annual interest rate of just 0.375 percent, while time deposits earn 2.75 percent.

Arleen May Guevara, senior vice president and chief investment officer at Philam, said interest rates offered by banks are even lower than the annual inflation rate, which stood at 3.6 percent in September. She said earnings from interest on bank deposits are, therefore, simply eaten up by inflation.

“There are a lot of resources out there that are not mobilized. There is so much to do with the sleeping money,” Guevara said.