October 28, 2024 | 12:00am
MANILA, Philippines — The Philippine stock market’s attractiveness among investors is growing, with its appeal supported by the country’s significant economic growth potential, strong consumer sector and remittance flows.
In a report by Singapore financial insights platform Beansprout in partnership with the ASEAN Exchanges, the Philippines is being regarded as an increasingly attractive market for investors looking for opportunities in emerging markets with dynamic economies.
It said the Philippine stock market is catching notable interest as investors are increasingly turning their attention back to markets in Southeast Asia.
Recently, the benchmark index, the Philippine Stock Exchange index (PSEi), closed above 7,400 for the first time since 2022.
The report said the PSEi’s rise positions Philippine stocks firmly in bull market territory.
“This upward trajectory has been bolstered by the Philippine central bank, or Bangko Sentral ng Pilipinas, implementing interest rate cuts, which have positively influenced investor sentiment,” the report said.
“Additionally, similar moves by the US have further supported this trend. The cuts in US interest rates are anticipated to favor emerging markets by weakening the US dollar, enhancing the attractiveness of investments like those in the Philippine stock market,” it said.
Potential rate cuts by the US Federal Reserve are expected to further benefit the Philippines.
Aside from the recent surge in the stock index, the report said several factors are making the Philippines increasingly attractive to investors.
Among these factors are its economic growth potential that is underpinned by a robust consumer sector as well as the steady stream of remittances from overseas Filipino workers which provides a consistent influx of capital.
Also cited as a critical driver is infrastructure development, with the government committed to enhancing the country’s transportation, telecommunications and energy infrastructure.
But while great investment potential is seen in the country, the report said that investors should also be mindful of the risks associated when investing in the Philippine market.
Among these risks are currency risks and a global economic slowdown.
“For foreign investors, exposure to the peso may present foreign currency risks. Fluctuations in the exchange rate between the peso and other currencies can impact the returns of investments,” the report said.
It said that a global economic slowdown, particularly in the US and China, meanwhile, could significantly affect the country’s economy due to reduced demand for exports, affecting industries reliant on these markets.
Nonetheless, the report said the Philippine economy has demonstrated resilience despite external headwinds and is poised for long-term growth.
The Philippine Stock Exchange Inc. (PSE), on its end, has been working to bring in regulatory reforms and marketing campaigns to attract foreign investors into the local market.
PSE president and CEO Ramon Monzon said they are hoping to attract more listings and investments in the stock market.
Monzon said that among the major initiatives of the exchange is to get more companies to list in the market and to have more sustainability-oriented companies comprise the listed companies at the PSE.
Also among the PSE’s priority up to 2026 is to expand its product portfolio to improve market liquidity and pursue new growth areas.
Be the first to comment