In an investors briefing, First Metro Asset Management, Inc. (FAMI), the fund management arm of First Metro Investment Corporation, advised company directors, CFOs, other decision-makers and investors to invest in the country’s promising growth story.
FAMI president Karen Liza Roa said, “The Philippines is a consistent performer. Our economy registered an above 6.0% GDP growth for eight years in the last decade, proving its strength and resiliency despite the changes in government administration (from Arroyo to Aquino to Duterte), natural calamities, and a volatile market environment.”
Ms. Roa explained that compared to its ASEAN peers, the Philippines – with an average GDP growth of 6.4% in the last five years – emerges as one of the top economies in the region. Malaysia posted an average growth of 5.2%, Indonesia 5.0%, Thailand 3.1%, and Singapore 3.0%.
Speaking at the same event as a resource person was Cristina Ulang, vice president and head of Research at First Metro Investment (FAMI’s parent company). She said, “The continued growth of the Philippine economy is largely attributable to the strength of the domestic economy, driven in large part by household consumption and government spending, and thus, less vulnerable to global event risks such as the U.S.-China trade war. The Philippines’ robust demographics and improving ease-of-doing business makes it a good place to invest in.”
Ms. Ulang named key sectors driving the economy’s growth: household consumption, foreign direct investments, manufacturing, tourism, construction, and infrastructure. She said that these economic drivers should serve as an investor’s guide when choosing what particular stocks to invest in. Those with exposure to these leading sectors are expected to ramp up their production and services to meet the growing demands of their clients.
Ms. Roa also said, “By investing in a flurry of stocks, one has a better chance of getting the rewards brought about by these growth drivers, and at the same time, minimize risks through a diversified portfolio. That may sound tedious given the many available stocks in the market, but by simply referring to an index, such as the Philippine Stock Exchange index (PSEi) one would know where to invest.”
Ms. Roa added that in order to capture the Philippine growth story and take advantage of it, investors can also refer to the First Metro Consumer Index, which First Metro developed with globally renowned index provider MSCI, Inc. The First Metro Consumer Index is composed of 20 stocks with huge revenue exposures to industries that benefit from the four economic growth drivers.
The performance of the First Metro Consumer Index is tracked by the First Metro Consumer Fund, which FAMI launched a year ago. As of June 24, 2019, it registered a year-to-date return of 8.71%, outperforming the PSEi’s 7.10%.
In late April, the Philippines earned an upgrade from global debt watcher Standard & Poor’s. The “BBB+” is the country’s highest credit rating to date. Ms. Roa said, “Others are now seeing the perks of investing in the Philippines. It’s high time we do the same. The credit ratings upgrade validates what we at First Metro Group have always believed in – that the Philippine market has a huge potential. We saw it before the first investment grade rating from Fitch in 2013, and we continue to keep that confidence in our country’s growth story.”