Falling in Love with the Philippines, by the Numbers

WORDS BY: Rosario “Chats” A. Santiago

For years, our country has earned and maintained a reputation for being a sleeping tiger of Asia. Our neighbors and the rest of the world wondered when we would awake from slumber and become the economic force we’ve long had the potential to be. It didn’t help that we languished among the most corrupt of countries in the eyes of the international community.

“With a reputation for being chaotic and corrupt, the Philippines has something of an image problem…. Consolidation in the banking sector has generated economies of scale and greater efficiency … Still, the sector is not at par with its Asian neighbors….”

Those are excerpts from Asia Business Channel‘s focus on the Philippines back in September of 2008. And yet, despite the problems, it also said that “Asia’s sleeping tiger is about to wake up, and set the pace for the Asia of tomorrow.”

Less than two years later, in its April 2010 feature, “Philippines II: The Philippine Advantage” , the network cited the country as “a globally competitive environment for investors,” and called it “Asia’s new business hotspot.”

It went on to say that although the Philippines has been a nation “long overshadowed by its neighbors in terms of economic growth and socio-political development, Asia’s sleeping tiger is slowly waking up.”

Fast forward to the present: since the first trading day on January 2nd of this year, the Philippine Stock Exchange (PSE) has seen seven new historic high closes, including the momentous breach of the 6,000 level, when the market saw an intraday high of 6,044.91, which also went on to be that day’s closing figure. Since then, the index has stayed above 6,000 and is expected to maintain its upward movement to anywhere between 6,500 and as much as 7,300 throughout 2013.

In its January 2 piece entitled “Bulls seen to rule in PH market,” the Inquirer cited Paul Joseph Garcia of Bank of the Philippine Islands’ (BPI) Odyssey Funds as saying that the outlook for the year is one of `low-tide-high-tide’. According to the article, Garcia pointed out that “for the market to hit the `base case’ of 6,500, corporate earnings would have to rise by at least 13 percent and the local economy should expand by 6 to 6.5 percent. Under the `high tide’ or best-case scenario, Garcia said it is possible that the PSEi could hit the 7,100 mark, assuming that the local economy would grow by 7 percent and that corporate earnings would expand by over 15 percent.”

If projections announced by the Bangko Sentral ng Pilipinas or BSP early last month are realized, then one-half of Garcia’s assumptions would be in place for a continued bull run upwards of 7,000. According to the BSP, our economy could grow “near seven percent” this year, within the higher end of the government’s target.

“We are expecting to achieve the objective of the government to have a growth rate of six to seven percent,” Diwa Guinigundo, BSP Deputy Governor, said last month. “In fact, we could grow near the seven percent figure.”

Guinigundo pointed to strong domestic consumption, increasing investments, as well as accelerated government spending as key factors to once again propel growth.

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