CEBU, Philippines - President Rodrigo Duterte is gaining positive feedback from investors, which may translate to good prospects for the Philippine economy and the local stock market.
"He's (Duterte) a disciplinarian and is eradicating drugs, corruption and anything that would drag the Philippines down. This is very good for businesses as well as the economy of the Philippines. The PSE (Philippine Stock Exchange) would rise with that," said Marco Nino Velasco, business development manager of Unicapital Securities Inc.
Velasco, however, was not fully confident of the local stock market's prospects for the rest of 2016.
"For one, companies are disclosing their earnings now adding more momentum to the market. After that, we're back to reality — struggling global economy," he told The FREEMAN yesterday.
"I still think that there would a big drop late this year or early next year. But there's nothing to worry about since our economy is doing well and it will just bounce back up. The Philippines is resilient," Velasco added.
He said that from investors' perspective, the Philippines is a gold mine because of its robust economy.
Last month, the benchmark PSE index (PSEi) rose more than 5 percent, outperforming all major emerging Asian stock markets.
PSEi opened yesterday at 8,034.76 points from Tuesday's close of 8,036.
In June, foreign portfolio investments (FPIs) or "hot money" posted a net inflow to S451 million. Approximately 83.8 percent of June investments were in securities listed on the PSE. FPIs are called hot money because they are easily pulled in and out of the local platforms depending on global and local sentiments.
In a general view, the domestic economy has been rosy, supported by OFW remittances and the booming BPO sector.
"Duterte doing some cleaning up just made things better. Growth now will trickle down to the middle class and eventually the marginalized sector. Before it was all in the elite (the less than 5 percent of the Filipino population)," Velasco said.
"If Duterte is consistent, which I believe he is and those following him as presidents as well, Philippines can catch up with Singapore in no time. That might be a long shot for now but it's a possibility," he added. (FREEMAN)