Investor sentiment in RP hits record high in 2nd quarter

MANILA, Philippines – Investor sentiment in the Philippines rose for the fourth consecutive quarter to reach an all-time high in the April to May period, making the country the second strongest driver in the Asia Pacific region, a survey by Dutch financial giant ING showed.

“The Philippines ranks as the second strongest driver of Pan-Asia (ex-Japan) sentiment and registered the greatest degree of positive change in overall investor sentiment,” ING said in its latest Investor Dashboard Survey.

The survey, which gauges investor sentiment in Asia Pacific countries except Japan, said the Philippine index reached a record high of 157 points in the second quarter, from a rock-bottom level of 89 points recorded in the first three months of 2009. The latest ranking was up 18 percentage points from the 139 points reported in the first quarter of 2010.

ING added that while most Asian markets are more pessimistic in the second quarter of 2010 than the previous quarter in terms of local property prices, the Philippines is an exception with the greatest increase in optimism towards property prices.

“Philippine investors see an increasing positive impact from the US economy on their investment decisions in the second quarter; investors from other markets see otherwise as the Philippine Stock Exchange Index (PSEi) rose by 12 percent in Q2 2010, likely driving Philippines investors to increase their positive outlook towards both the stock exchange and the high risk/high return investment sector in the next three months,” the report said.

It said that 75 percent of local investors believe that the new administration can promote a stable investment climate in the Philippines. The survey was conducted in June after the May national elections won by President Aquino.

“While it is generally acknowledged that the new administration will not drive significant reforms and policy direction, it is likely that the removal of political uncertainty is reason enough to spark a substantial 39-percentage point leap in the second quarter of the year in the number of investors who believe the new administration will make a positive impact on the economy.

Seventy-nine percent of Philippine investors are now confident that the economy will progress after the elections, while 80 percent believe that the elections will also have a positive impact on investment decisions and activities,” it said.

The report noted a sustained buildup in investor confidence in the Philippines from the last quarter of 2009 to the first semester of 2010.

“The fact that average daily turnover in the stock market is higher 31 percent from a year earlier and mostly driven by local activity is affirmative of investors’ combined optimism on the economy and prospects of a new government,” said PJ Garcia, ING’s chief investment officer in the Philippines.   –Ted Torres (The Philippine Star)