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Has Philippines' economic boom ended?

Reporter: Barnaby Lo 丨 CCTV.com

07-15-2015 17:24 BJT

While much of the world’s focus has been on Greece's economic turmoil and the Chinese market’s troubles, the Philippines -- a darling of investors in recent years -- has been dealing with a record fall in foreign investments in its stock market. 

These Filipino traders are facing an uphill battle. After rallying the Philippines’ stock market to an all-time high earlier this year, they’ now having to turn it around after losing more than 700 million dollars in foreign investments in the last three months. The outflow is the country’s worst in more than a decade… and the highest among emerging markets in the region. This, just after the government revealed a lower-than-expected 5.2 percent economic growth in the first three months of the year.  

The Philippines has been the “sick man of Asia” for so long, the economic boom the country has been experiencing the past few years has felt somewhat of a miracle. But with economic performance this year so far falling below expectations, some are asking – is the end near for the Philippines’ economic miracle?

Far from it, according to the Philippine Stock Exchange’s Chief Operating Officer Roel Refran.

"Look at the vital stats of the Philippines – debt to GDP ratio at 47 percent. Look at Europe, it’s probably at around 100 percent debt to GDP. We’ve never been this fiscally sound in the past 10 years. + What we’re seeing is an economy that’s just beginning to really gain traction," Refran said.

It’s an economy that is being fueled by a young, English-speaking workforce, and billions of dollars of remittances from Filipinos working overseas. But it isn’t immune to market movements outside the country.

"Up until June, the Chinese market was up 150 percent from the summer of 2014. And we have seen that funds are probably alpha-seeking; they would always look for the overperformers. While we are very much above our peer group, the returns generated by the Chinese market was just too much incentive for others to reconsider their portfolio," Refran said.

And with Chinese shares just recovering from a huge blow, the Philippines has a golden opportunity to gain back what it lost and get back to a path of economic success.

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