Market Perspective in 2019 and Bright Offerings

Last October 2, Sun Life Asset Management, Inc. (SLAMCI), held the 2019 Market Outlook and Bright Offerings presented by Mr. Michael D. Enriquez, Chief Investments Officer, Sun Life financial - Philippines, which opened our minds into possibilities and how the local market works. It cleared some questions in our minds that most of us are confused what is going on in our economy.

Inflation as we all are aware is the main concern in our country since the Tax Reform for Acceleration and Inclusion (TRAIN) Law was implemented last December 2017. Many of us are not in favor of TRAIN Law that is affecting the lives of many. At first, many of us, tax payers, were happy that the they will get a higher monthly income, but later on inflation spiked that became our number one concern.               

Rice

Higher rice price affected us especially the poor because rice is our main staple food. The government is taking action now, and  once the rice tariffication bill is passed, it can definitely lower the inflation rate in the market, and definitely that contributes a big part of the corp inflation basket.

Oil

Oil is something that is beyond the control of the government, because it is being deflated by geopolitical uncertainties in the world market at the moment. The recent rally of oil hovering about $60 per barrel, now to about $82 per barrel. Previously, we have been banking on shale oil that is being produced in the west, and the price in the world market is still above $50 per barrel. It was brought about by the U.S. sanctions on Iran that is more geopolitical than anything else. The problem is the U.S. could not transport shale oil and they don't have much investments yet on pipelines to transport. Unlike in the Middle East and Europe where the pipelines are already established. Here, they are still building pipelines on how to transport the shale oil.  It will still be more dictated by tensions in Iran, and hopefully the Organization of Petroleum Exporting Countries (OPEC) can agree to increase their productions which is the only way to bring down oil prices. We would expect oil price hike to continue in the next remaining months to continue, especially as the demands starts picking-up towards the Christmas season. 

Transport and Wage Hikes

The forecast of inflation is to move higher will show the wage will continue to lobby for higher ranges and the transport sector will start to lobby for higher transport fares. That will start adding more to prices of the basic goods and services in the next coming months.

The Banko Sentral ng Pilipinas (BSP) would continue to be very aggressive in terms of how they will curve inflation and working closely with the government on how they can normalize price of rice, in order for that perception of forward look inflation to taper. If they can be successful in doing so, we can see lesser concern on higher wage and transport prices. 

The Philippine Peso is expected to weaken against the US Dollar as the inflation increases. But by November, we would expect in flow of dollars to come in and that will definitely strengthen the Peso together with the seasonality where OFW remittances will be hightened towards the last two months of the year.We will be expecting the Peso to strengthen from where it is at the moment.

On the brighter side, there are other ways that we can do to combat the economic challenges that we're all facing now. Let us start saving and learn other ways to earn. We could not just rely on what we are earning from our jobs. For sure, many of us are thinking of either putting up a business or other investments.

"History and experience have taught us over that such pressures alone shouldn't always be our gauge whenever we need to make financial decisions. There are opportunities that we can take advantage of even when the scenario doesn't seem so favorable as of the moment, so long as we know how to leverage on them properly," said Valerie N. Pama, President, sun Life Asset Management Company, Inc.

Sun Life Asset Management Company, Inc. (SLAMCI) has been firm in its effort to educate investors and offer them ways conveniently and ready into their lifestyle, and recently lowered the investment amount in select Peso-Denominated Sun Life Prosperity Funds. 

For only Php1,000, you can start investing in the government securities, bond, balance, Philippine Stock Index, and Philippine Equity Funds. Forms are available at Sun Life Client Service Centers and via sunlife.com.ph. For additional investments for Peso-Denominated funds throuogh Sun Life partners payment chanels:

• Online Banking
• Mobile Banking
• Over-the-Counter

SLAMCI was aarded as the Best Asset Management Company in the Philippines for 2018 by Euromoney through the magazine's Private Banking and Wealth Management Survey.

DISCLAIMER:

Sun Life of Canada (Philippines), Inc. (SLOCPI), Sun Life Grepa Financial, Inc. (SLGFI), Sun Life Asset Management Corp. (GAMC) make no representation as to the accuracy or completeness of the information in this presentation. The information contained herein is subject to change without notice and should not be considered as a recommendation to hold, purchase, or sell shares, securities or other instruments. Important information about Sun Life Financial products may be obtained from sun Life Financial Advisors or Sun Life Mutual Fund Distributors. Past performance is not indicative of future performance. Invest wisely.