International | Apr 11 2006
Asia has enjoyed strong growth in recent years as China and India in particular have pushed up the overall growth rate for the region, but this result has masked poor performance in some economies.
The Philippines was one example, as the country suffered under a large debt that prevented the government from spending on necessities such as infrastructure and social programs.
In the view of ABN Amro the worst is now over for the Philippines economy, as the bringing under control of the debt issue is again allowing the government to spend on developing the economy, which in the broker’s view will be supportive for growth.
The broker also expects a boost from private consumption, as an increase in the money sent home by overseas workers should see spending levels increase. At the same time, the broker suggests better rainfall should be good for the country’s agricultural sector.
The economy is also gaining as the nation establishes itself more in the business process outsourcing market, which includes call centres as well as business administration and marketing services.
As a result the broker has lifted its exposure to the Philippines economy to 1% of its Asian portfolio, which is double the nation’s MSCI weighting. Other overweight positions include Hong Kong, South Korea, Singapore and Thailand.
In contrast, the broker suggests underweight positions are appropriate in Australia, China, Indonesia, Malaysia and Taiwan, while it remains neutral on India.
