COMPANIES in the property and industrial sectors are likely to benefit from the government’s push for more infrastructure development, analysts said.
Citing President Ferdinand R. Marcos, Jr.’s State of the Nation Address (SONA), and his Cabinet officials’ pronouncement in a post-SONA briefing, analysts also expect sub-sectors such as telecommunications, energy, water, construction, infrastructure, and allied services to benefit.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said that the government’s plan to continue the previous administration’s “Build, Build, Build” program could result in gains for the industrial sector.
“This could add to economic activity, encourage foreign investments in various PPP (public-private partnership) projects, and provide the momentum for the country’s rebound,” Mr. Arce added.
In his SONA, Mr. Marcos said: “The planned expansion of infrastructure projects, I believe, would be possible if we continue to encourage the participation of the private sector in the development of our programs.”
Mr. Arce also said that property firms could benefit from the administration’s no-lockdown policy.
“Property firms like ALI (Ayala Land, Inc.) and SMPH (SM Prime Holdings, Inc.) can also be looked out for, as operating profits may rise year over year on higher revenue, mainly driven by its mall and property development divisions, on the back of an easing mobility restrictions and economic recovery,” Mr. Arce said.
Mr. Marcos said that despite the threats of coronavirus disease 2019 (COVID-19) with the discovery of new variants, the administration will not impose another lockdown.
Other companies that are worth watching out for include some from the telecommunications sector such as PLDT, Inc., Globe Telecom, Inc., and Converge Information and Communications Technology Solutions, Inc., Mr. Arce said.
He said these companies had given their support to the president’s call for universal connectivity and digitalization to ensure the availability and affordability of telco services across the country.
“The president also mentioned his support for renewable energy and plans for nuclear power, which will help the country lower its energy costs and attract more global manufacturing companies,” Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said.
Mr. Arce said renewable energy firms that could benefit include ACEN Corp., Solar Philippines Nueva Ecija Corp., Raslag Corp., First Gen Corp., Aboitiz Power Corp. and Manila Electric Co.
In the post-SONA briefing, Department of Energy Director Mario C. Marasigan said that in support of reliable and clean sources, the administration will seek to address global investors’ concerns on foreign ownership issues.
“[We] will ensure that the renewable energy market provides a conducive environment that [will] strengthen [the] power distribution sector and ensure their timely and appropriate conduct of competitive selection process,” Mr. Marasigan added.
Mr. Arce identified infrastructure and construction firms such as Metro Pacific Investments Corp., Megawide Construction Corp. and Ayala Corp. to benefit from the administration’s push for public-private partnerships.
“The government just has to be careful in determining which projects, funding sources, and development partners are viable,” Mr. Arce added.
“We think listed conglomerates are ones to watch when it comes to PPP projects. Construction companies may also benefit down the line, but it is important to qualify that the current sentiment is still heavily weighed down by nearer-term concerns on inflation,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail.
In the post-SONA economic briefing, Department of Public Works and Highways Secretary Manuel M. Bonoan said: “As the president said, the infrastructure program will be very vital to support the national government’s effort to push the revival of the economy which was slumped due to COVID-19 pandemic. This is the foundation that we would build upon as the president pronounced, we must keep the momentum and aspire for Build Better More.”
Mr. Lood said the highlight on infrastructure pleased many investors because it would support the country’s long-term economic growth.
Furthermore, Mr. Mercado said that the government’s infrastructure push would help in easing logistical bottlenecks on food supply, and transport of goods while reducing travel time for commuters.
Mr. Arce said that the SONA laid down the president’s economic goals, which market participants are eager to see if he can deliver.
“Marcos’ SONA was lauded as very detailed, covering a lot of ground from power to agriculture to reducing the budget deficit, national debt, and national poverty alongside increasing government revenues and the rightsizing of the government, among others. The challenge, however, remains execution,” Mr. Arce added.
Mr. Arce also said that in the long term, the policy direction would provide a clear and positive path for Philippine equities in the next six years and might deliver an attractive return for those buying stocks amid the current downturn.
Mr. Mercado added that clear-cut policies and government initiatives would positively affect markets as these provide investors with better indications of what to expect, especially in relation to their investment decision making.
“For example, the president mentioned that there would be no more lockdowns, which we think helps remove some overhang,” Mr. Mercado said.
Similarly, Mr. Lood said that in the long term, the goals outlined in the SONA will stimulate more economic activity.
“His plans to boost agricultural productivity will ensure the country’s food security. Plans to improve healthcare in the Philippines by building facilities and encouraging the production of generic medicines will prepare the country for future emergencies, while digitization of government services will make business processes easier and faster, improving our ranking in the global list of ease of doing business. Returning to face-to-face classes would increase consumption while digitizing education would help our students become more globally competitive,” Mr. Lood added. — Justine Irish D. Tabile