As the fiscal tide churns with inflationary undercurrents in the Philippines, Teresita Sy-Coson, the vice chairperson of SM Investments Corp, paints a picture of an economy caught between the ebbing of ‘revenge spending’ and the persistent swell of high inflation.
This scenario unfolds as the Bangko Sentral ng Pilipinas battens down the hatches, hoisting the policy rate to a 16-year zenith.
Such financial turbulence may unsettle the average investor, but for the discerning few like us, it beckons opportunity.
Inflation is a many-headed beast in the Philippine archipelago, with tentacles reaching from the everyday jeepney commute to the heights of power rates, not to mention the ominous specter of El Niño.
Despite cooling to 4.9% in October, the anticipation of a sustained downtrend remains akin to searching for land on a foggy horizon.
It’s an environment that, as Sy-Coson astutely observes, “separates the big boys from the smaller ones,” though Philippine companies seem to weather the storm without resorting to debt restructuring.
This financial fortitude is a testament to the resilience and opportunity inherent in the Philippine market.
Let’s break it down. While growth in consumer spending may not match the dizzy heights of yesteryear’s spree, it’s the sectoral shifts that the shrewd investor should monitor. Renewable energy, technology, and health—these are not merely safe harbors but launchpads for growth in tumultuous times.
As SM’s banking arm extends support for growth-oriented initiatives, so too should we align our portfolios.
For those who have ridden the waves of Bitcoin and reveled in the wins of the GME saga, the playbook remains the same. Diversify, but with a twist.
Focus on the local sectors that stand to benefit from government subsidies or are inflation-resistant.
Think renewable energy projects that might gain from increased funding or technology startups that thrive as businesses seek efficiency in a high-cost environment.
As for consumer stocks, a scalpel-like approach is needed. Selectivity is the name of the game. The likes of SM Retail Inc., with a footprint in essential goods, may better navigate the inflationary maelstrom than luxury goods purveyors.
Meanwhile, BDO Unibank Inc. could see a windfall as interest rates rise, fattening the margins on their lending operations.
Let’s also consider the power of the peso.
Currency fluctuations amid such economic conditions can provide a lucrative play if approached with caution.
Forex may well be the untapped vein for those looking to capitalize on macroeconomic shifts.
We find ourselves in a financial saga where the past year’s exuberance has given way to a cautious narrative.
And yet, it is in such chapters that the plot often thickens, presenting narratives of growth for those with the patience to see beyond the present turbulence.
To my fellow investors, as the winds of change howl, let us anchor ourselves in research and strategy.
Let’s engage with the market with the poise of a seasoned sailor; ready to trim sails when the gale hits, and to catch the right wind when the storm passes, always keeping an eye on the horizon for the next opportunity.
In the end, remember: it is not the strongest of the speculators that survives, nor the most intelligent; it is the one most adaptable to change.
Stay pioneering, stay profitable.
Peter Burke
