Investor sentiment upbeat in Q3 - ING

MANILA, Philippines - Dutch financial giant ING said investor sentiment in the Philippines has finally turned optimistic in the third quarter after languishing in the neutral category since the height of the US financial crisis in the fourth quarter of last year.

ING’s third quarter Investor Dashboard Survey showed a 19 percentage point increase in investor sentiment in the Philippines to 135 for the third quarter of the year from 116 in the second quarter.

The country’s investor sentiment dipped to the neutral category in the fourth quarter of last year with 95 points that dipped to 89 points in the first quarter of the year before improving to 116 points in the second quarter of the year.

“The Index places Philippine investor sentiment back in the “optimistic” zone since it fell to neutral in fourth quarter of 2008. From first to third quarter this year, the investor sentiment index for the Philippines has been consistently on an upswing,” ING said.

ING Bank Manila managing director Cesar Zulueta said the survey was taken in September after a significant rally over the months of July and August wherein the Philippine Stock Exchange index monthly returns of 14.8 percent and 3.1 percent, respectively.

“Local market conditions are now more favorable. Economic variables such as inflation, interest rates, company earnings, and remittances, are supportive of higher growth. Investors with the appropriate risk appetite may want to increase their exposure to growth assets like equities,” Zulueta stressed.

He pointed out that another contributing factor was the better-than-expected overseas Filipino workers’ remittance inflows as 88 percent of all Filipinos consider the money sent home by Filipinos working abroad is an important contributor to the local economy.

The Bangko Sentral ng Pilipinas (BSP) now sees OFW remittances increasing by four percent instead of a zero growth to a record $17.1 billion this year from $16.4 billion last year especially after the onslaught of typhoons Ondoy and Pepeng.

“While recent weather conditions in the Philippines could have dampened investor confidence, rising remittances are expected to boost domestic liquidity and consumer spending, sustaining the overall sentiment among Filipino investors that the economy will improve further in fourth quarter of 2009,” Zulueta said.