by: Sarah Joson
Thursday, June 19, 2014 |
It is safe to say that the Philippines went through immense changes over the last 10 years, because it has accumulated remarkable foreign exchange reserves and posted great earnings even if there were looming issues regarding interest rates and inflation.
The country also proved its resilience last year when it was hit by the strongest typhoon ever recorded, Haiyan. Despite the calamity, the Philippine economy grew 7.2 percent in 2013, putting it in 5th position in Southeast Asia. In line with that, IHS Inc. predicts that the annual economic growth of the Philippines for the period of 2016 to 2030 will be at 4.5-5 percent, and will be valued at $1.2 trillion by 2030.
Positive Activity Seen in the Philippine Stock Market
With the strong performance of the Philippine economy, the stocks in the country have been observed to be performing well over the last four years. The PSEi Index posted year-to-date (YTD) earnings which are in excess of 16 percent in June of this year. Growth drivers are business process outsourcing (BPO), cement, and consumer products.
The Philippines has become an ideal BPO destination for its low labor costs and large workforce known for being proficient in English. It is expected to generate at least 110,000 jobs in the coming years.
However, the article pointed out that there has been no record of a publicly listed company that invests in BPO firms. Investors are advised to capitalize on companies that are currently being fuelled by BPO. These include real estate and property development. Some of the notable players in this segment are: Megaworld Corp. (MEG), Ayala Land, Inc. (ALI), Robinsons Land Corp. (RLC), SM Investments Corp. (SM), and SM Prime Holdings, Inc. (SMPH).
Now, industry leaders should figure out how to sustain the growth of the Philippine economy. They should be cautious not to rely on the BPO sector and remittances from overseas Filipino workers too much. Other industries such as agriculture, manufacturing, and tourism can also be further developed.