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Ramon Royandoyan –

January 11, 2022 | 3:29pm

MANILA, Philippines — The Philippine Stock Exchange is projected to grow 13-15% this year amid the background of economic reopening and presidential elections, First Metro Investment Corporation reported on Monday.

In an online briefing to journalists, FMIC noted this uptrend is highly possible since strict quarantine restrictions in months past were not imposed, giving the economy enough room to sustain demand amid a growing surge of infections.

“Upside is 15% for PSE index, with earnings per share growth of 35%. We delivered on last year’s forecast, just didn’t happen at end of the year. The biggest event to price in is that we’re returning to pre-pandemic gross domestic product, hopefully. Market is going to price that in,” said Cristina Ulang, head of research for FMIC. 

Economic managers revised GDP growth projections in their December meeting, now at the 5-5.5% for 2021 from an old forecast of 4-5%. The latest GDP figures show the economy expanded at a slower pace of 7.1% in the third quarter of 2021, which surprised many economists as many expected a lower print.

FMIC is projecting the economy to grow between 6-7% in 2022.

The investment banking arm of Metrobank Group expects other macroeconomic indicators, such as inflation to reach below 4% levels this year. Vic Abola, an economist at the University of Asia and the Pacific, who was present at the briefing, said this is due to the transitory nature of food and crude oil, especially since the former sensitivity to harvest and monsoon season.

On the one hand, the local bourse closed 2021 down to 7,122.63 as investors were fearful that the domestic economy would be sent into another round of harsh lockdowns due to worsening caseloads. While Ulang said the PSE index “flatlined” in the past year, its performance was markedly better than its 2020 pace since it shrank 8.6%.

FMIC said the only index that outperformed the Philippines was the New York Stock Exchange. As it is, FMIC executives were bullish on the local bourse owing to several initial public offerings stock rights offerings, and follow-on offerings. One of the biggest IPOs last year was Monde Nissin which raised P48.6 billion, shattering a PSE record.

The only tailwind for the economy and local equities, however, would be the upcoming presidential polls.

The country is heading into a crucial election year, one that decides who would inherit the Duterte administration’s pandemic-scarred economy and how they will guide the country out of it. Ulang noted there is an upside to an election year, as various industries benefit from a boost from campaign-related spending, as was the case in previous polls.

“There is still extra spending compared to regular years, there will be an upside, it could be lower than 2% but there will be an upside,” Ulang said.

For Abola, he believes the results of the 2022 elections need to be credible. Latest surveys show that Ferdinand Marcos, Jr. son of the late dictator, and incumbent Vice President Leni Robredo leading among voters’ preferences.

“It’s not who will win but how it is conducted. Doesn’t matter who wins the presidency, we do have momentum, we have a basis for growing faster. I think the credibility of elections is one at stake,” said Abola.