Foreign investors are on wait-and-see after elections in the Philippines won by Ferdinand Marcos Jr and a rally in the equities market might be a challenge, Philippine Stock Exchange President Ramon Monzon said yesterday.
“Further upside? It’s going to be tough. We have a lot of macroeconomic problems,” Monzon said in an interview with Bloomberg TV.
“The new economic team has a lot of hard work in front of them,” he said, citing the nation’s record debt and the need for new revenue sources.
Photo: AFP
The benchmark Philippine stock index fell by as much as 3.1 percent to a nine-month low a day after the elections on Monday.
Most of the 30 components of the benchmark dropped, with AC Energy Corp, San Miguel Corp, Wilcon Depot Inc and Robinsons Land Corp leading the losses.
Foreigners were net sellers in the local stock market a week before the vote.
The slide in the benchmark gauge also reflects losses in regional shares as rising US interest rates and slowing Chinese growth hurt sentiment.
The Philippine Stock Exchange Index has fallen more than 6 percent this year, outperforming the MSCI AC Asia Pacific Index, which dropped almost 18 percent.
“Many investors are likely to be in a wait-and-see mode,” Robert Ramos, who helps manage 140 billion pesos (US$2.7 billion) as head of the trust and investments group at Rizal Commercial Banking Corp, said before the start of trading. “They will wait for the new government to discuss its plan for the economy and how we get out from the impact of the [COVID-19] pandemic.”
Investors are awaiting who presumptive president Ferdinand Marcos will appoint in his economic team.
“I think that’s the most important thing in a change of administration,” Monzon said.
Marcos’ majority vote is being viewed “very positively” by some people, he said.
Economic reforms under Philippine President Rodrigo Duterte, which include further opening the economy to foreign investors and the revised rules in the capital market, are positive points.
“The ingredients are there. It’s just a question of really hoping the new team will have this dynamism that the country needs,” Monzon said.
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