Rodrigo Duterte, the Philippines' president. Veejay Villafranca/Bloomberg
Rodrigo Duterte, the Philippines' president. Veejay Villafranca/Bloomberg
Rodrigo Duterte, the Philippines' president. Veejay Villafranca/Bloomberg
Rodrigo Duterte, the Philippines' president. Veejay Villafranca/Bloomberg

Economy

Philippines economy soars 6.9 per cent topping forecasts

Country remains one of the fastest growing in the world and is predicted to keep up momentum until at least 2019

Bloomberg

November 16, 2017

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The Philippines economy grew 6.9 per cent last quarter, exceeding all estimates in a Bloomberg survey and cementing its position as one of the fastest-expanding in the world, the Philippine Statistics Authority said in Manila Thursday, after expanding a revised 6.7 per cent in the previous three months.

The median estimate of 17 economists surveyed by Bloomberg was 6.6 per cent and growth has exceeded 6 per cent for a ninth consecutive quarter

Compared with the previous quarter, GDP rose a seasonally adjusted 1.3 per cent.

Consumer spending, which makes up about 70 per cent of GDP, gained 4.5 per cent from a year earlier, while government spending rose 8.3 per cent and investment increased 6.6 per cent.

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Remittances remain crucial to Philippines economy

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The Philippines is emerging as one of this decade’s economic stars with the World Bank predicting growth of more than 6 per cent until 2019, underpinned by an ambitious infrastructure building program and a young and growing population. The finance secretary Carlos Dominguez on Thursday said he expects faster growth in the succeeding quarters, while the central bank governor Nestor Espenilla said there are no signs of overheating in the economy.

The president Rodrigo Duterte has secured loans from China and Japan to help finance US$180 billion of spending on projects such as the capital’s first subway and a network of railways and highways across the archipelago. More than $50bn of remittances and outsourcing revenue a year is helping support consumer spending, and luring retailers such as home furnishing giant Ikea.

The central bank has so far kept interest rates at a record low but may be persuaded to tighten policy next year as currency weakness adds to pressure on inflation. The peso has dropped to an 11-year low this year but rose a seventh day to 50.895 per dollar as of noon in Manila.

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The rules on fostering in the UAE

A foster couple or family must:

  • be Muslim, Emirati and be residing in the UAE
  • not be younger than 25 years old
  • not have been convicted of offences or crimes involving moral turpitude
  • be free of infectious diseases or psychological and mental disorders
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Profile of Udrive

Date started: March 2016

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Employees: 40

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Other workplace saving schemes
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How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.