Philippines Investment Outlook

Posted by: : Shayne HeffernanPosted on: May 26, 2014 Philippines Investment Outlook

Businesses turned more bullish in the second quarter, expecting to make more money as the domestic economy recovers from the effects of Supertyphoon “Yolanda” and get a boost from improving conditions in advanced markets.

The improvement was a result of several factors, mainly robust consumer demand during the harvest season, graduation and enrolment periods, and the summer season that brings in more foreign and local tourists, results of a central bank survey showed.

Respondents also cited continuing confidence in the Aquino administration and the improvement of global economic conditions as reasons for their optimism.

“The country’s strong macroeconomic fundamentals such as manageable inflation and steady growth of remittances as well as more favorable external conditions with the recovery of global markets support the positive business outlook,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

Results of the BSP’s Business Expectations Survey for the second quarter showed that the overall confidence index (CI) rose to 50.7 percent from 37.8 percent in the Q1 2014 survey.

This higher reading indicated that the number of optimists increased and continued to be greater than the pessimists during the quarter. The confidence index is computed as the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative with respect to their views on a given indicator.

For the third quarter, businesses anticipated continuing economic expansion as the next quarter CI sustained its high level of 48.9 percent.

This was due in part to the more optimistic outlook of firms in the wholesale and retail trade and construction sectors given their expectations of brisk demand at the start of the school year and new expansion projects in power generation, telecommunications and building of highways, the BSP said.

The survey was conducted from April 1 to May 14 and covered 1,529 companies across the country. Respondents were drawn from the combined top corporations based on the list of the Securities and Exchange Commission’s Top 7,000 Corporations in 2010 and BusinessWorld’s Top 1000 Corporations in 2012.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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