How to Invest in Philippines?
Among the frontier markets, investors have often overlooked the Philippines. With a population of about 91 million and a stable manufacturing and service-based economy, the country offers several good investment options. Goldman Sachs included Philippines in its “Next Eleven” list of countries. This year the economy is projected to grow 3.6%.
Some of the reasons to invest in Philippines include:
- Banking sector appears resilient
- The capital adequacy ratio of banks exceed the minimum required
- Economy is less dependent on exports than many other regional peers with exports-to-GDP ratio around 30%
- Inflation is mild and is under the target range set by the Central Bank
- Financial markets has rebounded due to strong overseas remittances, macroeconomic policies and renewed confidence
- The current account remains a surplus
- Many companies in the telecommunications, energy, property,banking and retail trade sector are owned by conglomerates
- Many of its major trading partners are in fast-growing Asia
Source: IMF
According to a recent article, the banking and utility sector has interesting opportunities for investors.Currently there is no country-specific ETF for Philippines. However in February, iShares filed papers to launch a Philippines ETF. This ETF will be heavily concentrated in utilities, telecommunications and financials.
The Philippine Long Distance Telephone Company accounts for about one-fourth of the benchmark PSE Composite Index. Its ADR trades under the ticker PHI in the New York Stock Exchange. It has a dividend yield of 6.17%. The company is well-positioned in the industry and is expected to experience accelerated growth with its broadband service. Some of the largest companies such as Ayala (OTC: AYALY), Globe Telecom (GTMEY), Metropolitan Bank and Trust Company(OTC: MTPOY), etc. trade on the OTC markets. The complete list can be found here.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
[...] – Artcile mentions Globe Telecom of Philippines paying a dividend yield of about 8.50%.I mentioned this stock in my post How to invest in Philippines? [...]