Philippine equities can lose their tag as the only emerging Asia market to suffer foreign fund outflows this year”•with a helping hand from President Rodrigo Duterte.
Strategists say progress on Duterte’s promised tax reforms is needed to bring back global asset managers, who have offloaded $230 million of Manila-listed equities in 2017 while pouring $6.7 billion into India and $1.4 billion into Malaysia.
Investors are also looking for company profit growth to justify an index valuation that’s at the widest premium to emerging market peers in six months.
“The Philippines is a very attractive market to invest in but there are more obviously better opportunities elsewhere and there have been some headwinds in terms of the tax reform not passing, the earnings momentum depleting and also geopolitical risks,” Vanessa Donegan, who helps manage $456 billion as managing director at Columbia Threadneedle Investments, said.
“We like the Philippines for its potential for increased infrastructure spending but how will the government get to finance that without getting this tax reform package through?” she said.
