Tuesday, February 14, 2017

Sun Life Foresees Continued Strength Growth of Philippine Economy

Less than a year in the Duterte administration, the Philippines experienced an unprecedented social divide that brought a phenomenal cultural revolution that expands to all social classes and sectors of the society. In the advent of internet technology and social media, all of us became witnesses on how perceptions of people determine the probable outcome of a state of a nation. 

So, here we are, after seven months under the new government, Filipino people are bearing the loads of realities on our backs such as an atmosphere of social unrest being felt by many brought about by the government’s unorthodox approach on its “war on drugs” campaign, wide spread corruptions in the executive office and legislative body, scandalous issues in the PNP ranks, and some fragile issues on diplomatic relationships with other countries, just to name a few. 

While all these are happening, peoples' confidence in our economy is put on a rigid test. Had the used-to-be “Sickly Man of Asia” truly recovered from his illness and indeed became the fastest growing economy in the region that's strong enough to support investments or have we just experienced a relapse and regressed to a state where our economy has gone from bad to worse?

Apparently, big players in the business are showing no signs of weariness despite the steady decline on stocks and weakening of the Philippine peso over the dollar. But, for small time investors like me, how should I react to these scenarios? Should I pullout everything and look at venturing into European markets? With my limited knowledge of how our domestic market will play in the next months or years, it is helpful to seek wisdom and hopefully find solace from the experts. 

Recently, the Sun Life Asset Management Company, Inc. (SLAMCI) organized an intimate gathering of members of the media to present the current financial “State-of-the-Nation”. Mr. Michael Enriquez, Sun Life Chief Investment Officer, explained that with a continuous increase in consumer and government spending, the outlook remains fundamentally positive. "Remittances from overseas Filipino workers, the BPO industry, and the large number of Filipinos who are of working age are among the factors boosting our economy from the consumer’s end. On the other hand, the rise on government spending is bringing more jobs and has also increased the demand for construction materials," he said.

According to Mr. Enriquez, these so called positive developments are offsetting the impact of recent events in the market, including the weakening of the PH peso against the US Dollar and the drop in the Philippines Stock Exchange Index due to the shift of foreign funds to the US market. Further on, he encourages small-scale investors to stay the course, even boost their investments, and look further for a long-term season of investments. Since the stock prices are cheaper, it is the best time to buy to enjoy greater gains once the market goes up and recovers. 

One investment tool people should consider is investing in mutual funds such as the Sun Life Prosperity Funds, managed by SLAMCI. Historically, the Sun Life Prosperity Funds have been performing strongly despite the given scenarios in the market. The Sun Life Equity Fund for one, has gained a five-year return of 39% and a 10-year return of 119%, while Sun Life Prosperity Balanced Fund marked a 28% and 89% growth in the five and 10 year return respectively; the and the Sun Life Prosperity Bond Fund lodged a 12% and 44% return for the same duration. The said figures is as of December 31, 2016.

So what does all these percentages mean to a small scale investor? According to Sun Life finance experts, basing on their technical parameters, our economy is still holding strong and investors of these financial tools are reaping relatively promising gains still. These revenues are results of a sound economic growth, perhaps brought about by the infusion of reserves that was left by the previous administration and the locked in tenures of foreign investments in our country.  On the technical side, these factors would equate to a relatively good statistics in the next coming months.

However, numbers and statistics may tell us promising futures but realistically, many would still hold on to their resources and seek a lesser risk taking investments instead. Given the overall present state of our country today, financial and investment decisions should be made with thorough analysis. SLAMCI advises investors not to take drastic steps due to “fear of the unknown”. Instead, we are all encouraged everyone to invest long term because Sun Life believes and are confident that things would get better sooner than we expected. 

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