A quarterly survey by Canadian based Manulife Financial Corp. has found that investors from the Philippines are Asia’s most optimistic, and are also more willing than others in the region to invest throughout the ASEAN Economic Community (AEC), as well as in more far away developed and emerging markets.
“Philippine investors remain optimistic about investing at home with the sentiment index for domestic investment at 59, the highest in Asia”, said Manulife in the Q2 edition of its Investor Sentiment Index.
They added that Philippine investors are also the most bullish on Canada and Japan with regards to growth, with 19% believing that the Japanese economy will be the fastest growing in the next two years, followed by Canada, China and Australia. “This contrasts markedly with the average Asia investor, 27% of whom expect China’s economy to grow fastest, followed by much lower expectations for Japan, Australia and Canada”, said Manulife.
In the most recent survey, Indonesian investors were Asia’s second most optimistic and scored 57 on the sentiment index. Malaysians were a more distant third at 47. Investors in Singapore registered at 15, the Japanese at 14, while the Chinese scored 11. The least optimistic were Taiwan at -1, and Hong Kong at -10.
Property was listed as the most preferred asset. Sentiment for home property was the “highest at 75, up one in the quarter, while investment property rose by four points to 74,”, according to Manulife, which added that “fixed income saw the biggest increase, up five points to 50.” Sentiment on stocks also rose by four to 45, while that for mutual funds rose one point to 36. Manulife mentioned that “cash was the only asset class to see a decline, down nine to 73, but still remains high.”
Despite positive sentiment, the Philippines’ GDP growth slowed to 5.7% in the first quarter of 2014 – the first time in nine quarters that it fell below 6%, and less than the 7.7% and 6.3% pace that was achieved in the first and fourth quarters of 2013, respectively. “We believe sentiment was boosted by a credit rating upgrade from Standard & Poor’s and an increase in government spending on much-needed infrastructure projects”, said Manulife.
Standard & Poor’s upgraded the Philippine’s credit to investment grade on May 8th, which is the country’s highest rating as of yet. S&P increased the country’s rating to BBB with a stable outlook from the BBB- that was issued in 2013.