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RP investor confidence up but below Asia Pacific


Investor confidence in the Philippines continued to be in the optimistic zone for the third straight quarter in January to March, suggesting that investors believed the market had stabilized, the ING Group’s latest quarterly Investor Dashboard Survey showed. The global financial service group said the Philippine index rose by 5 points to 139 in the first quarter from the previous one despite growing uncertainty about the upcoming national and local elections. The sentiment index for the Philippines has been climbing since reaching a low of 89 at the height of the US-led financial crisis in the first quarter of last year. But the Philippine index was slightly below the overall pan-Asia (excluding Japan) rating, which slid to 145 in the first quarter from 147 in the last quarter of 2009. "Investor confidence in the region, however, continues to be high at double the crisis low of 73 for the [fourth quarter of] 2008, and remains in the optimistic range," ING said in a statement.

Source: ING Investor Dashboard Survey
With the recovering economy, local investors showed the most improved view of the high-risk investment sector among Asia-Pacific countries, ING said. "The increase in Philippine investors who said their household financial situation improved in the last quarter [was] the second highest in the region, after India," it added. Paul Joseph Garcia, trust officer of ING Bank N.V.’s Manila branch, traced the uptrend to investors’ improved expectations on growth prospects for Asian markets, including the Philippines. He also cited economic stimulus of heavy election spending, increased exports and money sent home by Filipino workers abroad. Philippine exports rose for the fourth consecutive month in February, posting double-digit growth from a year earlier following a surge in electronic product sales, the government reported on Tuesday. Export earnings grew by 42.3 percent to $3.567 billion in February from a year earlier, bringing the two-month level to $7.146 billion or 42.4 percent growth. The peso has hit a 20-month high against the dollar, which ING traced to stable consumer prices and what it claimed was the government's improving fiscal condition. The local currency's rise, it added, was also contributing to improved investor confidence in the country. "However, the peso’s rise may be disrupted by the May elections." Despite the risk from the May elections, Philippine investors' views on improving economic and financial conditions in the first quarter were up slightly from the last quarter of last year, apart from return on investment. But in the first quarter, there was a seven-percentage-point increase in the share of investors who believed their return on investment would improve in the coming quarter. The five-percentage-point increase in investors who believed their household financial situation improved in the last quarter was the second highest in the region. May elections Meanwhile, the share of Philippine investors who expect the May elections to positively affect the economy and their respective investment portfolios slid to 40% in the first quarter. The same proportion of investors were unsure. When asked what policy programs the next President should prioritize to improve the local investment climate, investors’ top three choices were the economy (79%), education (54%) and trade relations (48%). The top three presidential candidates whom investors think could best promote a stable investment climate were Senator Benigno "Noynoy" Aquino III (37%), Gilberto "Gibo" Teodoro Jr. (28%) and Senator Manuel B. Villar Jr. (23%), ING said. The ING Investor Dashboard Survey measures and tracks investor sentiment and behavior of affluent investors from 12 Asia-Pacific markets — China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Japan and Australia. The first-quarter survey was conducted in March 2010 and involved online interviews with 3,729 investors aged 30 years and above, and have disposable assets or investments of at least $100,000. For Indonesia, respondents had disposable assets or investments worth at least $60,000 and for the Philippines, the requirement was at least $60,000 in disposable assets or investments or a monthly income of at least P200,000. The survey was conducted for ING by The Nielsen Company. — Norman P. Aquino, GMANews.TV
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