By Joann Santiago
MANILA, Jan 22 (PNA) — Officials of Sun Life of Canada Philippines, Inc. (SLOCPI) remain optimistic on the resiliency of the economy and the domestic financial market and its impact on their business.
In a briefing Thursday, Michael Manuel, Sun Life Investment Management Managing Director for Asia, said firmer growth of the US economy will positively impact on the domestic economy.
“US is starting to grow so there’s enough capacity to grow,” he said.
With the sustained growth of the world’s largest economy, the Federal Reserve ended in the last quarter of 2014 its stimulus program and analysts are now projecting an increase as early as the middle of this year.
Manuel, however, cited that some analysts have revised their forecast on when the first interest rate would happen. Instead of the middle of this year, it is now projected to transpire in the latter part of the year.
He said this is positive for the Philippine financial markets since the low interest rate environment would still be there.
”As interest rate outlook pushes back towards 2015, you see bond market also rallying. There’s a lot of room for markets to breath and move higher ,” he said.
Because of latest global economic situation, SLOCPI Chief Investment Officer Michael Gerard Enriquez sees the Philippine Stock Exchange Index (PSEi) to reach the 7,800-8,000 level this year.
The main index has been posting increases lately but profit-taking resulted to its decline to 7,416.31 points Thursday ahead of the announcement of the European Central Bank’s (ECB) policy decision later in the session.
Enriquez, during the same briefing, said power and banks are among the projected drivers of the local equities market this year.
In terms of the expansion of the domestic economy, Enriquez said there is a possibility that the seven to eight percent target of the government can be achieved, partly because of the expected increase in government spending, which in turn is seen to be front-loaded ahead of the election ban by November this year.
He said the government “has learned their lesson last year”, thus, they will stick to their targets and exhaust all means to hit these.
He also noted that because of the ban for all government infrastructure projects six months ahead of the May 2016 elections, higher spending in the first half is more likely.
”There’s a big chance that the government will hit their growth target for this year,” he said.
As of the third quarter of 2014, expansion of the domestic economy is below the government’s 6.5-7.5 percent target after it stood at 5.8 percent due in part to lower government spending.
Aside from the expected increase in government spending, the other factors seen to boost domestic growth are higher investments from both the local and foreign investors.
“We see more investors taking in more risk,” Enriquez said.
Meanwhile, Sun Life Asset Management Company, Inc. (SLAMCI) ended 2014 with Php 47 billion worth in assets under management (AUM).
SLAMCI President Valerie Pama, during the same briefing, said they have come a long way from having three managed funds worth Php 150 million in AUM in 2000 to eight managed funds to date such as the Bond Fund, Balanced Fund and Money Market Fund.
”We’re extremely proud of what our company has achieved in the past 15 years in serving the Filipinos, because it shows how we’re able to help bring them closer to achieving prosperity and financial security,” she said.
Pama said SLAMCI now have 2,449 financial advisors and 11 bank partners, six of which are foreign banks while five are local banks.
She added that their active clients now number about 60,776 as of end-December 2014, up 21 percent year-on-year. (PNA)