Manulife expects PH to keep growth momentum
The Manulife Philippines expects the country would keep its economic growth momentum this year amid the projected increase in infrastructure spending and robust private sector investments.
Aira Gaspar, Manulife Philippines chief investment officer, said the Philippine economy, as measured by its gross domestic product (GDP), will continue its strong performance delivered in 2016 and keep its upbeat economic momentum this year.
“Looking ahead, we expect a continued execution of larger infrastructure spending and co-investing projects with private capital. This will generate positive multiplier effects on employment, manufacturing, retail trade and productivity,” Gaspar said in a statement.
“These factors, coupled with supportive structural reforms would drive stronger corporate earnings and create new catalysts for Philippine equities,” she added.
Gaspar also said the country’s sound macroeconomic fundamentals, healthy foreign exchange reserves and domestic-driven economy will reduce its vulnerability to external headwinds.
“We expect the local central bank’s policy to stay accommodative throughout 2017 given manageable inflation outlook and positive economic growth momentum,” the Manulife official said.
“In addition, our ample domestic liquidity mitigates the risk of an abrupt rise in local government bond yields,” Gaspar added.
Likewise, Manulife expects robust remittances from overseas Filipinos and business process outsourcing industry, citing these sectors will offer strong support to domestic consumption and continual domestic liquidity formation.
For the emerging markets in Asia, Manulife said they are expected to continue to grow in 2017, offering opportunities for investors amid ongoing global political and market volatility.
“This year will be a year of volatility as investors may see a gradual rise in inflation, flatter yield curves and higher US interest rate,” Manulife said.
“In advanced economies, long-term interest rates are expected to stay low this year, whereas in Asia, growth and strong fundamentals could present opportunities to investors,” the insurer added.
Southeast Asia could perform relatively better given that its economies are driven largely by domestic consumption and policies, as was observed in 2016, Manulife said.