Metrobank unit sees over 7% growth this year

MANILA, Philippines - First Metro Investment Corp. (FMIC), the investment arm of top lender Metropolitan Bank & Trust Co., expects the Philippine economy to grow over seven percent this year following the 6.5-percent gross domestic product (GDP) growth in the third quarter of the year.

The government has revised the second quarter GDP growth to a higher to 8.2 percent from a 30-year high of 7.9 percent, as electricity sales and exports registered a strong surge during the period.

In its latest report, FMIC also said in?ation will slow down further to 2.2 percent this month and is expected to remain low for the rest of 2011.

“The fiscal de?cit was only P10.5 billion in October, leaving much room for the full-year de?cit to end below the target of P325 billion,” the report said.

Remittances from overseas Filipinos will accelerate by over 10 percent monthly in the last quarter of the year, as a Bangko Sentral ng Pilipinas (BSP) business outlook survey indicates that the last three months of the year would improve from a business confidence index of 45 percent in the third quarter to 50.6 percent.

“That will be the highest registered outlook since the survey was launched in 2001,” the FMIC report stressed.

Meanwhile, the peso is expected to end the year at 43.56 to the dollar, strengthening to 43.16 to 43.26 in the first two months of 2011.

At the capital market, the Philippine Stock Exchange index (PSEi) is expected to remain above the 4,000 level until the end of 2010, as strong macroeconomic fundamentals in the first nine months of the year keep investors bullish.

“In the long-term, macroeconomic strength, domestic optimism, and earnings upgrades will continue to create a positive environment for the Philippine equities market,” FMIC noted.

“We think the macroeconomic environment will drive higher equity prices and will attract more funds to the market.”

The index recorded a new high at 4,413.42 on Nov. 5, 2010, but was eventually pushed downwards as profit taking weighed heavily on the bourse.

“Surely, market observers can sense the strong risk appetite among local investors because the outlook is supported by stable macroeconomic conditions, optimistic domestic socio-political development and strong corporate earnings,” the FMIC report said.

Earlier, ING Bank said that the index will enter the 5,000 to 5,200 level next year. The foreign bank said the PSEi would close 2010 in the 4,300 to the 4,500 level.

“The present level of 4,000 to 4,100 is a consolidation state as investors were just profit taking and making the necessary adjustments with the currency adjustments,” Paul Joseph Garcia, ING Investment Management head and ING Bank Manila trust officer, said recently.