Connect with us

Business

Finance: Investment potential of the Philippines

Legacy Phuket Gazette

Published

 on 

PHUKET: I recently spent a week in the Philippines – a country long labeled with the dubious distinction as ‘the sick man of Asia’ and a country investors might want to take a closer look at.

The Philippines’ presidential and vice presidential election on May 9 saw the rise of Rodrigo Duterte, after incumbent President Benigno Aquino III (who took office in 2010) was barred from seeking re-election.

From 2002 to 2009, the country’s GDP growth averaged about 5 per cent, but this average rose to 6 per cent from 2010 to 2015 (during Aquino’s term), with the government targeting even higher GDP growth of 6.8 to 7.8 per cent for this year.

Even after Duterte’s win (he’s been called the Donald Trump of the Philippines) most experts believe the economy should continue to perform well.

After all, the Philippines has weathered worse uncertainty and political and economic storms before, from Ferdinand Marcos and martial law to a messy transition to democracy, and from the Asian and then global financial crisis to the more recent economic downturn of many of its trading partners.

In recent years, the business process outsourcing industry has been one of the most important contributors to the Philippines’ growth story, with the sector expanding twice as fast as the entire economy. This is largely due to companies in high cost markets taking advantage of lower costs in the Phillipines for back office and customer care activities. In addition, overseas Filipino worker remittances have remained strong and are another important driver of the local consumer economy.

On the other hand, much of the recent strong economic growth has still not trickled down to the majority of the population – a problem you will quickly notice as a visitor to the country.

For investors, there would be a number of Philippines stocks that have lightly traded over-the-counter (OTC) market listings along with exchange traded funds (ETFs)/funds with exposure to the country, but the following ETF and NYSE listed American Depository Receipts (ADRs) are the most liquid options to choose from:

The iShares MSCI Philippines Investable (NYSEARCA: EPHE) has tracked the MSCI Philippines Investable Market Index since its September 2010 inception date and offers the broadest exposure to the Philippine stock market. The ETF also comes with a 0.64 per cent expense ratio, has over US$300 million in net assets (as of late April) and an average trading volume of close to 300,000 shares per day for the last three months. As of late April, EPHE was up 5 per cent since the start of the year, down 15.25 per cent over the past year and up 41.5 per cent since October 2010, while a potential performance benchmark, the iShares MSCI Emerging Markets Index ETF (NYSEARCA:EEM), is up 7 per cent since the start of the year, down 21.2 per cent over the past year and down 24 per cent since October 2010.

Philippine Long Distance Telephone (NYSE: PHI) or simply PLDT was founded in 1928 and is now the largest telecommunications and digital services company in the country. PLDT would also have investments in other sectors of the economy (for instance, a stake in Meralco, the country’s largest electric distributor), while through wholly owned ePLDT, Inc, the group offers a suite of managed digital solutions ranging from big data analytics and contact center solutions to disaster recovery and managed security.

PLDT has a market cap of around US$8.5 billion and an average trading volume of around 100,000 shares per day for the last three months. As of late April, PLDT shares are down 7.4 per cent since the start of the year, down 40.7 per cent over the past year and down 28.8 per cent over the past five years (mainly due to shares falling off sharply with last summer’s overall market swoon). There’s also a biannual dividend (with a rate paid at management’s discretion) yielding more than 6 per cent.

Does the Philippines fit into your investment portfolio?

Don Freeman, BSME, is president of Freeman Capital Management, a Registered Investment Adviser with the US Securities Exchange Commission (SEC), based in Phuket. He has over 15 years experience working with expatriates, specializing in portfolio management, US tax preparation, financial planning and UK pension transfers. He can be reached at 089-970 5795 or freemancapital@gmail.com.

— Don Freeman

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Best of4 hours ago

Top 5 Wine Bars in Bangkok with Delivery

Best of4 hours ago

The Best Bakeries in Bangkok with Delivery

Coronavirus (Covid-19)4 hours ago

More Pattaya people arrested drinking alcohol, violating Covid measures

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Best of5 hours ago

5 of the most appealing Phang Nga hotels

Phuket6 hours ago

“Phuket Sandbox” still on, provincial restrictions set after uptick in Covid-19

Thailand6 hours ago

Thailand News Today | Boss indictment, Pattaya arrests, bubble burst | July 27

image
Join the conversation on the Thaiger Talk forums today!
Best of6 hours ago

Top 5 bars in Pattaya

Thailand7 hours ago

UPDATE: Dying Samut Prakan mother tells daughters to go to orphanage

Best of7 hours ago

Top 5 Thai restaurants in Krabi

Drugs7 hours ago

Hong Kong officials seize 61 kilograms of heroin shipped from Bangkok

Best of7 hours ago

Koh Pha Ngan’s 5 best resorts

North East8 hours ago

Couple “drops off” Covid infected 80 year old father at Korat temple, drive off

Coronavirus (Covid-19)8 hours ago

Phuket officials add new layers of restrictions, Central closed for 7 days

Thailand9 hours ago

Korat construction camp closed following Covid outbreak

Coronavirus (Covid-19)9 hours ago

Tuesday Covid Update: 14,150 new cases; provincial totals

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand6 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand6 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand7 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand7 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand7 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending