Sun Life sees Phl growth in 2012 at 6.5%

MANILA, Philippines - Canadian insurance giant Sun Life Financial said it sees the Philippine economy growing 6.5 percent in 2012 and around seven percent in 2013.

The global financial institution also expects the peso to range between 35 to 39 to the dollar this year, “as there are too much dollar inflows coming from remittances from overseas Filipinos, business process outsourcing (BPOs) and tourism receipts.”

Last Tuesday, the National Economic and Development Authority (NEDA) forecast that the gross domestic product (GDP) in the fourth quarter of 2012 would expanded 6.5 percent, boosting full-year growth at six percent in 2012.

For 2013, the country’s economic planners retained its original outlook of between six to seven percent.

In a presentation yesterday, Sun Life Financial-Asia Investments managing director Michael Manuel said the low interest rate environment, high liquidity of the country’s banking system, stock market index establishing multiple records and the country on the verge of getting the much-anticipated investment-grade rating were responsible for their bullish outlook.

In 1998, Philippine banks were hampered with high non-performing loans (NPLs) thus trapping capital. Today, banks are getting bigger and stronger, liquidity is extreme and insurers are now aggressively lending beside banks.

“There is just too much money in circulation and there is a lot of interest in the equity market,” Manuel said.

Foreign investors already account for nearly 40 percent of trades in the bourse.

Proof of the bullish outlook is that Sun Life Financial (Philippines) has tasked subsidiary Sun Life Asset Management Co. Inc. (SLAMCI) to generate P50 billion worth of net assets under management (AUMs) in its mutual fund business by 2015.

SLAMCI is the fund manager of the Sun Life Prosperity Fund, which are mutual funds invested in the bond market, the equity market and the money market.

SLAMCI manages seven mutual funds under the Sun Life Prosperity (SLP) Funds, including fixed or bond fund, equity fund, balanced fund, government securities (GS) fund, money market fund, and dollar-denominated funds (Advantage and Abundance).