The Philippines: Falling from Grace

The Philippines: Falling from Grace

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

Four Pillars of GDP: Growth hurt by net exports

High growth remains a feature of The Philippines’ economy, however, strong private consumption and investment have been greatly reduced by a severe trade deficit. This has helped The Philippines go from one of the most attractive markets just a few years ago to one of Asia’s least attractive today.

Most expensive market in Asia

Return-on-equity is relatively good, and EPS growth beats Asia ex-Japan. But The Philippines’ high valuation should offset any optimism. At 16.4x PE expected for 2017, the country has the highest valuation in Asia.

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#Philippines: Falling From Grace

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

Overall The Philippines is the second least attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Fundamentally, The Philippines has a good ROE and strong earnings in 2016 so far.

Valuation: The country has the highest valuation in Asia.

Momentum: It has the poorest price momentum in Asia.

Risk: The market features moderate gearing and volatility.

Strong performance in Materials and Consumer Discretionary

Top 3 largest sectors: Industrials: 25% of the market. Financials: 22%. Real Estate: 18%.

Best sector & stock: Energy: +7.2% & Semirara Mining and Power Corporation: +16.1%

Worst sector & stock: Telecom: -28.7% & Globe Telecom: -30.6%


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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.

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In 1992 Dr. Andrew Stotz, CFA, left a management career at Pepsi-Cola in California to teach finance in Thailand. In 1993, he found his life calling as a financial analyst, a job for which he was eventually voted #1 in Thailand. In the second half of his 20-year career in investment banking, Dr. Stotz was a Head of Research, leading teams of financial analysts. He served as a two-term president of CFA Society Thailand and now runs his firm, A. Stotz Investment Research, which provides research and tools for institutions and high-net-worth investors and helps CEOs make their companies financially world class.
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