PH, Malaysian investors most optimistic in Asean

Posted at 06/18/14 9:16 AM

MANILA, Philippines - Investors from the Philippines and Malaysia are the most optimistic in the Southeast Asian region, according to a survey by Manulife Financial.

The study, part of the Manulife Investor Sentiment Index (MISI) survey, shows sentiment in the Philippines is joint highest with Malaysia, and at 58 is more than double the regional average of 24 (up two points from 22 in the previous quarter).

While optimism is down slightly from the previous quarter (down eight points to 58), more investors still regard it as is a good time to invest and sentiment remains overwhelmingly positive.

At the asset class level, sentiment dropped across the board except towards cash; although again, investors remain optimistic about all asset classes (equities lost seven points to reach 41, fixed income was down 15 to 45, mutual funds declined 16 to 35, and investment property slipped nine to 70).

Manulife Philippines president and chief executive officer Ryan Charland said the survey of investor sentiment in the Philippines continues to reveal great optimism.

“A strong stock market performance during the quarter and strong economic growth expectations look to be underpinning the upbeat sentiment,” Charland said.

Yet, sentiment may have built in a higher inflation outlook and the rise in banks’ reserve requirements, which was interpreted as a prelude to further tightening measures to curb strong liquidity growth.

Manulife Philippines chief investment officer Aira Gaspar said that they expect sentiments towards equity to pick up, as resilient domestic consumption and rising investment spending are supportive of an upward corporate earnings trajectory.

Despite the optimism, the research also show that Philippine investors are concerned about their retirement, including the need to continue working beyond the official retirement age and their ability to meet family responsibilities during retirement.

Sixty-four percent of Philippine investors surveyed favor an increase in the official retirement age, a good deal higher than the Asia average (51 percent). The official retirement age in the Philippines at only 60 years is below the Asian average, with most countries in the region currently setting retirement at 65 years.

The investor sentiment survey also highlights the importance that Philippine investors place on providing financial security for their families.

Their largest retirement concern is their ability to leave an inheritance to children or heirs (69 percent of investors).

Their second biggest concern is health deterioration (60 percent) followed by a fear that they will need to support their children financially (37 percent). In addition over four-fifths of investors in the Philippines, more than any other country in the region, expect to support their spouse in retirement.

Almost nine out of 10 investors expect private healthcare services to handle their medical needs during retirement, which runs counter to the rest of the region where the average is just over one in four.

However, only 40 percent of Philippines investors have private medical insurance and only 60 percent expect to purchase or maintain personal health insurance during retirement. Despite such large numbers not having or not expecting to have private healthcare insurance, only 15 percent are worried that healthcare will be unaffordable in retirement (less than half the regional average).

“Investors think that healthcare will be somewhat affordable, but if they don’t have insurance, it will be an out-of-pocket expense,” Charland said. “With medical expenses continuing to rise over time and at a greater rate than inflation, Philippines investors would be wise to factor that into their retirement planning.”