Author Topic: Buy peso assets early, exec urges investors  (Read 1062 times)

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Buy peso assets early, exec urges investors
« on: July 23, 2012, 01:22:06 PM »
If you are monitoring the current trend of Philippine Peso,you would notice na nag appreciate na ang value ng pera natin.. perfect time to invest :)

and to match that up, here's an interesting article i just read from inquirer., ano masasabi nyo dito?

Buy peso assets early, exec urges investors

Investors should start betting on the Philippines because values of peso-denominated assets are expected to jump once the country’s widely expected credit rating upgrade to investment grade materializes.

This was according to Omar Cruz, president and CEO of bancassurance firm BPI-Philam, who said that now is the most appropriate time to invest in peso-denominated assets because the country’s leap to investment status may be imminent.

“It’s just a matter of time when the next notch of increase in the country’s credit rating will happen and bring us to investment grade. If you are not in the market early enough, and you come in when [the upgrade investment grade] has already happened, you will have lost a lot of [income] opportunity,” Cruz said.

He said it was prudent for people who have extra funds to now invest in portfolio assets, such as those being offered by BPI-Philam, to generate profit in the near future.

He was speaking during a “money summit” organized by insurer Philam Life and BPI-Philam held on Friday in Pasay City. BPI-Philam is the financial services firm formed from the alliance between Philam Life and Bank of the Philippine Islands.

Cruz, who is a former national treasurer, said the equities market of the Philippines has been the top performer in Southeast Asia in terms of equity-price gains from 2009 to the present.

He said this trend is expected to continue, and the gap between investment gains in the Philippines and the rest of Southeast Asia will be even more pronounced once the country is granted investment grade status.

Cruz cited the debt-to-GDP ratio of the Philippine government, which he said is already about the same as those of country’s enjoying investment grade.

Citing estimates by the International Monetary Fund, Cruz said the domestic debt of the national government of the Philippines is now just about 40 percent of the country’s gross domestic product, or 50 percent based on the IMF’s slightly different method of computing the ratio.

Cruz said credit rating firms require the debt-to-GDP ratio to be at 40 percent or lower for a country to deserve an investment grade.

He also said the ratio is expected to improve further and settle at only 30 percent by 2017.

Cruz also cited the healthy level of foreign-exchange reserves of the Philippines, adding these help shield the country from shocks brought about by market volatility caused by economic woes in industrialized countries.

The Philippines’ gross international reserves stand at about $76 billion, which is enough to pay for 11 months’ worth of imports, and is equivalent to six times the country’s foreign currency-denominated debts maturing within the short term.

“Many countries will be threatened by shocks coming from Europe, and maybe the United States. This is because their dollar reserves may be depleted [when central banks use reserves to defend their currencies],” he said.

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Buy peso assets early, exec urges investors
« on: July 23, 2012, 01:22:06 PM »

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Re: Buy peso assets early, exec urges investors
« Reply #1 on: January 31, 2013, 10:52:34 AM »
Maganda din mag travel ngayon at bumili ng dollar kasi malakas ang peso.... ipon ipon lang..

Nabasa nyo na ba eto?

Peso seen hitting 37:$1 level next year
By Prinz P. Magtulis (The Philippine Star) |

MANILA, Philippines - The peso is seen strengthening to 37 to a dollar by next year on the back of favorable investor sentiment, strong remittance inflows and sustained reform efforts by the government, an investment bank said.

“Our overweight position is based on the (peso’s) undervaluation, strong remittance inflows, improved macroeconomic stability and sustained reform efforts,” Bank of America-Merrill Lynch (BofA-ML) said in its latest report released yesterday.

“Bangko Sentral intervention will remain a risk to our view, but in our view, there are some limits to aggressive intervention,” it added.

Strong foreign inflows have allowed the peso to appreciate by roughly seven percent against the greenback this year, making it one of Asia’s best performing currencies. It closed at 41.02 to a dollar yesterday, the weakest since Nov. 23.

While a strong peso gives more purchasing power to consumers and importers, it also trims the value of dollar export and business process outsourcing earnings as well as remittances from overseas Filipinos. All three are considered growth drivers.

To temper a rising peso, BSP has kept its presence at the foreign exchange market by buying up dollars to boost the latter’s demand and strength. However this could not continue for so long, BofA-ML said, especially with the central bank incurring losses.
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“(R)educed seignorage and (foreign exchange) valuation losses, arising from intervention, are stressing the central bank’s balance sheet,” it explained.

As of September, BSP’s losses ballooned to P68.36 billion, more than double last year’s level as dwindling revenues failed to keep pace with rising costs. By buying dollars, BSP shells out pesos from its own coffers.

Nonetheless, BofA-ML said a strong peso “should dampen inflationary pressures” next year, along with lower interest rates that should boost bank lending.  This, in effect, could boost growth to as much as 5.5 percent.

For this year, the bank has forecast a 5.7-percent uptick on local gross domestic product (GDP). Philippine GDP grew 6.5 percent for the first nine months of the year. GDP is sum of products created and services rendered in an economy used to gauge economic growth.

“Our 5.5 percent GDP growth forecast for 2013 implies the Philippine economy would record its 15th straight year of growth, easily the longest growth streak the economy has sustained in its history,” BofA-ML said.

Risks however remain, BofA-ML said, citing failure to raise taxes which may “constrain” government spending, necessary for boosting economic expansion.
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Re: Buy peso assets early, exec urges investors
« Reply #1 on: January 31, 2013, 10:52:34 AM »


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