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The Philippines Offers a Fast Growing Economy with Expensive Stocks to Boot

Watch the video with Andrew Stotz or read a summary of the country profile on The Philippines.

Four Pillars of GDP: Private Consumption and Investment

At 6.6%, The Philippines has the second fastest GDP growth in Asia (only India’s is faster). Private consumption and investments are the main drivers of the economy, but net exports created a large drag on GDP growth at -1.6%.

Expensive but moderately attractive

The Philippines totes the highest valuation in Asia on a price-to-earnings basis at 21x in 2017CE*.

However, analysts are expecting earnings to grow at a low 3.4% this year.

The #Philippines offers a fast growing #economy with expensive #stocks to boot

A. Stotz Four Elements: The Philippines’ rank relative to Asia

Overall, The Philippines is a moderately attractive market in Asia, considering all our four elements: Fundamentals, Valuation, Momentum and Risk.

Fundamentals: The nation sported a moderate ROE in the past 12 months, relative to Asia as a whole.

Valuation: It remains expensive, because PE is the highest in Asia and earnings growth is low.

Momentum: The country offers poor price and earnings momentum.

Risk: The country offers low beta to Asia ex Japan with moderate volatility.

Real Estate did best among top 3 largest sectors in 3Q17

Top 3 largest sectors: Industrials: 26% of the market; Financials: 23%; Real Estate: 18%.

Best sector & stockInformation Technology: +17.9% & Integrated Micro-Electronics Inc.: +38.7%.

Worst sector & stock: Materials: -5.9% & D&L Industries Inc.: -16.4%.


*CE is consensus estimates

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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.