A Danish investment advisor expects the Philippines to remain among the most dynamic economies in the world in 2018.
Peter Lundgreen, the founder and chief executive of Copenhagen-based Lundgreen’s Capital, expects Asia to continue to offer the best opportunities for businesses because of the region’s high gross domestic product growth. “I expect corporate earnings in many Asian countries to continue to manifest upbeat results during 2018,” he says.
China, he says, will not surprise positively with a higher growth than expected this year while India will explore an improved GDP growth. He says while Japan enjoyed a higher GDP growth in 2017, the base in 2016 was low, meaning only a modest growth in 2017 made the growth numbers look good on a relative basis. “As the Japanese growth isn’t accelerating, then I expect that this year will look just modest,” he says.
Lundgreen says: “One of the most dynamic and improving economies actually still remains the Philippine economy.”
Lundgreen’s Capital is regulated by Danish financial authority ‘Finanstilsynet’ and has a license to offer individual investment advice and risk management consulting in the European Union. It also has an office in Fort Bonifacio, Taguig City which Lundgreen visits three or four times a year, to monitor the situation in Asia, including China.
Lundgreen says on a global scale for 2018, Asia remains the most interesting economic zone for investors. “The Eurozone, as usual, seems to be in the process of defining itself. Thus, the political energy is not spent on creating new improved conditions for economic growth and certainly not to make the growth jump forward,” he says.
“In the United States, a positive surprise could emerge this year. As the country is by far the world’s largest economy where an unexpected higher GDP growth of half a percentage point would be noticeable for the whole global GDP growth. If the scenario should materialize, then it requires that the new tax reform contributes positively to economic growth pretty soon,” says Lundgreen.
Lundgreen says the American growth is back in an upward curve generating a positive and self-reinforcing effect. “That is why I expect in particular small and mid-sized business and middle-income class households to take the bite i.e. to spend and invest more due to the tax reform. Probably enough to reach a GDP growth of 2.5 percent this year but if it’s forceful enough to meet the magic 3 percent is unknown. Though my expectation is that the United States has the best potential to contribute the biggest advancement of global GDP growth in 2018,” he says.
Lundgreen says this kind of consumption will be good news for exporters to the US – including Philippine exporters. “Though it also emphasizes the need for rate hikes in the US, which for sure will come, and it adds the pressure on the Philippine central bank to follow.”
“Another expected effect is a stronger US dollar during this year, which will drag the Philippine peso higher towards the Euro – the growing export destination for the Philippines,” says Lundgreen.