Sun Life sees PHL GDP growth of 6.8%-7% in 2017
SUN LIFE of Canada (Philippines), Inc. remains bullish about the Philippine economy in 2017 despite persistent global uncertainties, with a growth estimate of 6.8%-7% driven by the government’s plans for aggressive infrastructure spending.
“I think we will continue. You might have short- term volatility, but I think the outlook is still positive for the Philippines. We still expect strong GDP ( gross domestic product) growth this year. Our forecast is 6.8 to 7% and I guess what is critical is for the government to execute all the infrastructure projects,” Rizalina G. Mantaring, president and chief executive off icer at Sun Life, told reporters.
President Rodrigo R. Duterte’s government is looking to invest as much as P9 trillion over the next six years for government-funded infrastructure programs, which when delivered is expected to sustain GDP growth at 7-8% from 2018 to 2022.
The life insurer’s full- year forecast for 2017 was higher than its 6% estimate made in June, according to the firm’s Chief Investments Off icer Michael Gerard D. Enriquez.
Ms. Mantaring’s estimate is within the government’s official target for 2017 of 6.5-7.5%.
Ms. Mantaring noted that for the company’s GDP guidance to be met this year, the government needs to execute on its infrastructure program “because that is really what’s bogging down a lot of our industries.”
“The government has to focus on that because that will also drive growth in the future years, the government spending will really drive the growth — that’s critical,” she added.
Ms. Mantaring also noted that uncertainty over US policy should raise a sense of urgency in Manila to ensure that its policy direction is clear.
“Clarity of policies of the government, that will really help particularly since there are a lot of uncertainty coming from the US, so more clarity on the local front will also help. And I think generally, the economic program of the government is very good, it is really just execution at this point,” she noted.
Ms. Mantaring also said that global uncertainties might have a negative impact on the Philippines’ business process outsourcing (BPO) sector, but the country is still advantageous for investment.
“We have 70% of BPO revenue that comes from the US, but you know I don’t think it will be as bad as people think it will… if [US companies] have BPOs here, there are really advantages to being in the Philippines — the English language ability, the service mindset, and most of all the costs — they’re less than about one-fourth to onefifth of the cost in the US, so that is not something that you can easily replace,” she said.
The Information Technology and Business Processing Association of the Philippines (IBPAP) said in October 2016 that it expects the BPO sector to continue expanding in the next six years, earning as much as $38.9 billion in revenue by 2022.
IBPAP had a target of $ 25 billion in net revenue for the industry in 2016, with a work force target of 1.3 million.
Meanwhile, Ms. Mantaring said of Sun Life’s growth prospects in 2017: “So far we are up significantly versus the same period last year. So far… the indicators look good, we are up from last year,” Ms. Mantaring said.
“In December we had a record month, highest sales in our history for the month and the quarter was almost a record quarter also,” she added.
For the fifth consecutive year, Sun Life was first among the country’s life insurers in terms of total premiums in 2015 at P32.8 billion, up from P30.7 billion in 2014.
Asked for an update on the company’s second infrastructure investment, a renewable power plant, Ms. Mantaring said, “It is still being worked out. But we are exploring several opportunities.”
Asked if the insurer is looking at other infrastructure projects this year, she said: “We need to look at what’s available. But we are looking at several opportunities, what is available and what is feasible.”
Ms. Mantaring also said that the company is launching several types of unit-based products this year in the form of new funds, mutual funds and more dollardenominated investment products, noting that the demand for the dollar is currently strong, “so a lot of people are diversifying.”
The company also hopes to secure the Insurance Commission’s approval for various types of products within the month. —